Corrections Corp., Hospitality Properties: Ratings Changes
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BOSTON (
) -- TheStreet.com's stock-rating model upgraded prison operator
Corrections Corp. of America
(CXW) - Get CoreCivic, Inc. Report
to "buy."
The numbers
: Second-quarter net income declined 13% to $33 million and earnings per share fell 7% to 28 cents, cushioned by a lower share count. Revenue grew 6% to $413 million. Its gross margin remained steady at 30%, but its operating margin fell from 19% to 18%. A quick ratio of 1.8 demonstrates ample liquidity. A debt-to-equity ratio of 1 indicates higher-than-ideal leverage.
The stock
: Corrections Corp. of America is up 42% this year, beating major U.S. indices. The stock trades at a price-to-earnings ratio of 19, a slight discount to the market and security service peers. The company doesn't pay dividends.
The model upgraded hotel leaser
Hospitality Properties
(HPT)
to "buy."
The numbers
TheStreet Recommends
: The company swung to a second-quarter profit of $51 million, or 46 cents a share, from a loss of $19 million, or 29 cents a share, in the year-earlier period. Revenue decreased 21% to $267 million. Its gross and operating margins remained steady at 27%. The trust holds just $7 million of cash, compared to $2.4 billion of debt. A debt-to-equity ratio of 0.8 indicates reasonable leverage.
The stock
: Hospitality Properties is up 38% this year, more than major U.S. indices. The stock trades at a price-to-earnings ratio of 11, a discount to the market and real estate investment trust peers.
The model upgraded oil and gas service provider
Oceaneering International
(OII) - Get Oceaneering International, Inc. Report
to "buy."
The numbers
: Second-quarter net income dropped 8% to $48 million and earnings per share fell 6% to 87 cents. Revenue declined 10% to $451 million. Its gross margin rose from 19% to 31%, but its operating margin was unchanged at 16%. The company has adequate liquidity, demonstrated by a quick ratio of 1.3. A debt-to-equity ratio of 0.1 is below the industry average, indicating restrained leverage.
The numbers
: Oceaneering International is up 97% this year, outpacing major U.S. indices. The stock trades at a price-to-earnings ratio of 16, a discount to the market, but a premium to oil and gas service peers. The company doesn't pay dividends.
The model upgraded information technology consultant
Sapient
(SAPE)
to "buy."
The numbers
: Second-quarter net income decreased 34% to $7.6 million and earnings per share fell 33% to 6 cents. Revenue fell 10% to $154 million. Its gross margin declined from 35% to 32% and its operating margin dropped from 7% to 6%. The company has an ideal financial position, with $175 million of cash and no debt.
The stock
: Sapient has advanced 80% this year, beating major U.S. indices. The stock trades at a price-to-earnings ratio of 19, a discount to the market and IT-consulting peers. The company doesn't pay dividends.
The model upgraded temporary staffing firm
TrueBlue
(TBI) - Get TrueBlue, Inc. Report
to "hold."
The numbers
: Second-quarter profit plummeted 78% to $3.7 million, or 9 cents a share, as revenue decreased 33% to $247 million. Its gross margin declined from 30% to 29% and its operating margin fell from 6% to 2%. The company has an ideal financial position, with $104 million of cash and no debt.
The stock
: TrueBlue has risen 49% this year, more than major U.S. indices. The company posted losses in the two previous quarters. The stock doesn't pay dividends.
-- Reported by Jake Lynch in Boston.
