Baytex, Chubb, Gentiv: Ratings Changes

TheStreet.com Ratings has upgraded Baytex Energy Trust, Chubb and Gentiva Health Services.
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BOSTON (

TheStreet

) -- TheStreet.com's stock-rating model upgraded

Baytex Energy Trust

(BTE) - Get Report

, a fund that invests in oil and gas projects, to "buy."

The numbers

: Second-quarter net income fell 20% to $27 million as earnings per share dropped 32% to 26 cents. Revenue declined 40% to $164 million. Its operating margin shrank from 39% to 13%, but its net margin increased from 13% to 17%. A quick ratio of 0.4 and $2 million of cash indicate a weak liquidity position. The debt-to-equity ratio is in conservative territory at 0.4.

The stock

: Baytex has surged 88% this year, trouncing major U.S. indices. The stock trades at a cheap price-to-earnings ratio of 11 and offers a cash distribution yield of 5.8%. Cash distributions are taxed differently than dividends.

The model upgraded insurer

Chubb

(CB) - Get Report

to "buy."

The numbers

: Second-quarter revenue fell 3% to $3.3 billion, but net income advanced 18% to $551 million, or $1.54 a share. Its operating margin jumped from 18% to 23% and the net margin rose from 14% to 17%. The company has an adequate liquidity position with $2.7 billion of cash reserves. And a debt-to-equity ratio of 0.3 indicates restrained leverage.

The stock

: Chubb is down 4% this year, underperforming major U.S. indices. The stock trades at a cheap price-to-earnings ratio of 11 and offers a fair 2.9% dividend yield, which is lower than the average of S&P 500 companies.

The model upgraded

Cree

(CREE) - Get Report

to "buy." The company makes electrical components that involve light-emitting diodes, or LEDs.

The numbers

: Fiscal fourth-quarter net income rose 15% to $9.7 million and earnings per share climbed 57% to 11 cents. Revenue grew 9% to $148 million. Its operating margin increased from 4% to 10% and its net margin hovered above 6.5%. Cree has an outstanding financial position with $417 million of cash, translating to a quick ratio of 4.1, and zero debt.

The stock

: Cree shares have doubled this year, beating all major U.S. indices. The stock trades at an exorbitant price-to-earnings ratio of 110, indicating strong growth expectations. The company doesn't pay dividends.

The model upgraded

Endo Pharmaceuticals

(ENDP) - Get Report

, a maker of pain treatments, to "buy."

The numbers

: Second-quarter revenue increased 22% to $373 million, but net income declined 47% to $30 million, or 26 cents. Its operating margin was unchanged at 27% as its net margin fell from 19% to 8%. A quick ratio of 1.5 indicates strong liquidity and a debt-to-equity ratio of 0.3 reflects a conservative capital structure.

The stock

: Endo has fallen 18% this year, but is only down 9% in the past 12 months. The stock trades at an attractive price-to-earnings ratio of 12, but the company doesn't pay dividends.

The model upgraded

Gentiva Health Services

(GTIV)

, a provider of home health services, to "buy."

The numbers

: Second-quarter revenue fell 14% to $298 million, but earnings surged 42% to $17 million, or 58 cents. Its operating margin rose from 8% to 10% and its net margin climbed from 3% to 6%. Its cash balance has quadrupled to $104 million since the year-earlier quarter and a quick ratio of 1.9 reflects strong liquidity. A debt-to-equity ratio of 0.4 indicates reasonable leverage.

The stock

: Gentiva has dropped 30% this year, underperforming major U.S. indices. The stock trades at cheap price-to-earnings ratio of 4, but the company doesn't pay dividends.

-- Reported by Jake Lynch in Boston

.