) -- U.S. stocks retreated yesterday, with the
Dow Jones Industrial Average
S&P 500 Index
falling 1%. A handful of stocks hit 52-week highs.
jumped 2.2% to $22.54.
, a rival of the San Jose, Calif.-based chipmaker, increased its sales forecast yesterday, boosting the industry.
: Third-quarter net income dropped 40% to $57 million, or 19 cents a share, as revenue fell 20% to $287 million. Altera's gross margin rose from 69% to 70%, but its operating margin fell from 32% to 23%. The company has $1.4 billion of cash and $500 million of debt.
: We rate Altera "buy." Although its stock is more expensive than those of other chipmakers, the company avoided losses during the recession and is positioned to rebound faster than rivals. We give the company a financial strength score of 8.9 out of 10 and a performance score of 8.3 out of 10. Both figures are higher than "buy"-list averages.
advanced 0.4% to $61.30. Fitch Ratings said it expects the household products industry to grow 5% in 2010.
: Fiscal first-quarter net income increased 23% to $157 million, or $1.11 a share. Revenue declined 1% to $1.4 billion. Clorox's gross margin widened from 44% to 49%, and its operating margin increased from 17% to 21%. Clorox has a weak liquidity position, evident in its quick ratio of 0.4. A negative shareholders' equity tally and $3.2 billion of debt are signs of fiscal irresponsibility.
: We rate Clorox "buy." Despite balance sheet woes, Clorox offers impressive growth and rewards shareholders with a 3.3% dividend yield. Its payout ratio is in safe territory at 50%. Clorox shares are cheaper than those of rivals based on all of our valuation measures, excluding book value. It's a stock to consider for investors seeking income or a defensive position.
rose 1.8% to $55.76. Shares of the Indianapolis, Ind.-based health insurer have risen 9% over the past month, more than major U.S. indices, as fear of nationalized health care subsided.
: Third-quarter net income dropped 11% to $730 million and earnings per share fell 4% to $1.53, cushioned by a lower share count. Revenue increased 3% to $15 billion. WellPoint's gross margin expanded from 21% to 25%, and its operating margin widened from 5% to 9%. WellPoint has a liquid balance sheet, with $18 billion of cash and $9 billion of debt.
: We rate WellPoint "buy." WellPoint shares are cheaper than those of competing health insurers based on earnings, projected earnings, book value, sales and cash flow. The company has managed its balance sheet prudently, resulting in excess reserves and a debt-to-equity ratio that's below the industry average.
-- Reported by Jake Lynch in Boston.