) -- TheStreet.com's stock-rating model upgraded chipmaker
: Fiscal third-quarter profit soared 74% to $108 million, or 19 cents a share, as revenue grew marginally to $903 million. Nvidia's gross margin remained steady at 41%, but its operating margin widened from 8% to 9%. The company has $1.6 billion of cash and short-term investments and $25 million of debt. A quick ratio of 2.3 indicates ample liquidity.
: Nvidia shares have doubled this year, outpacing major U.S. indices. Still, the company posted losses in the three previous quarters. Its stock is cheaper than those of rivals based on projected earnings and sales, but expensive based on book value and cash flow. The company's clean balance sheet has earned it a financial strength score of 8.9 out of 10.
The model upgraded
Archer Daniels Midland
: Fiscal first-quarter profit decreased 53% to $496 million, or 77 cents a share, as revenue fell 29% to $15 billion. Archer Daniels Midland's gross margin narrowed from 10% to 8%, and its operating margin shrank from 7% to 4%. The company has a stable financial position, with $5.1 billion of cash and liquid securities and $7.9 billion of debt. Its quick ratio of 1.4 and debt-to-equity ratio of 0.6 reflect fiscal prudence.
: Archer Daniels has risen 10% this year, less than major U.S. indices. Despite the weak performance, the company is an attractive investment. Its shares sell at a discount to those of peers based on trailing earnings, projected earnings, book value, sales and cash flow. The company's hefty cash position and reasonable leverage has earned it a financial strength score of 7.9 out of 10.
The model downgraded health care equipment and drug seller
: Fiscal fourth-quarter profit plummeted 86% to $56 million, or 11 cents a share. Revenue climbed 5% to $2.7 billion. Covidien's gross margin contracted from 59% to 53%, and its operating margin tightened from 21% to 16%. The company has $1.5 billion of cash and marketable securities, and $3 billion of debt. Its quick ratio of 1.5 and debt-to-equity ratio of 0.4 demonstrate financial stability.
: Covidien has returned 35% this year, more than the
Dow Jones Industrial Average
S&P 500 Index
. Covidien remained profitable during the recession, but its latest quarterly results disappointed investors. Its stock is cheaper than those of its peers based on all of our valuation measures, including book value, sales and cash flow.
-- Reported by Jake Lynch in Boston.