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) -- TheStreet.com's stock-rating model upgraded entertainment company
( CKXE) to "hold".
: Second-quarter net income plummeted 64% to $4.5 million and earnings per share dropped 58% to 5 cents, cushioned by a lower share count. Revenue decreased 10% to $80 million. Its gross margin declined from 62% to 59% and its operating margin fell from 30% to 16%. CKX has a strong balance sheet, reflected by a quick ratio of 2 and a debt-to-equity ratio of 0.4.
: CKX has advanced 82% this year, beating major U.S. indices. The stock trades at a price-to-earnings ratio of 62, a premium to the market and entertainment peers. The company doesn't pay dividends.
The model upgraded medical device maker
: Fiscal first-quarter revenue grew 6% to $3.9 billion, but net income decreased 40% to $445 million, or 40 cents a share. Its gross margin deteriorated from 82% to 80% and its operating margin declined from 33% to 31%. Medtronic has ample liquidity, evident in a quick ratio of 1.5. A debt-to-equity ratio of 0.5 demonstrates conservative leverage.
: Medtronic is up 21% this year, outpacing the
Dow Jones Industrial Average
S&P 500 Index
. The stock trades at a price-to-earnings ratio of 20, a premium to the market, but a discount to medical equipment peers. The stock offers a 2.2% dividend yield.
The model upgraded poultry processor
: In the fiscal third quarter, the company swung to a profit of $43 million, or $2.09, from a year-earlier loss of $3.7 million, or 18 cents. Revenue grew 8% to $505 million. Its gross margin rose from 5% to 20% and its operating margin climbed from negative territory to 14%. Sanderson has an adequate liquidity position, demonstrated by $34 million of cash and a quick ratio of 1. A debt-to-equity ratio of 0.3 indicates modest leverage.
: Sanderson Farms has increased 24% this year, more than the Dow and S&P 500. The stock trades at a price-to-earnings ratio of 89, a significant premium to the market and packaged-foods peers, and offers a 1.3% dividend yield.
The model upgraded oil and gas transporter
Teekay LNG Partners
: The company swung to a first-quarter profit of $22 million, or 46 cents, from a year-earlier loss of $42 million, or $1.13, as revenue declined marginally to $76 million. Its gross margin was little changed at 75% and its operating margin declined from 45% to 44%. Teekay has a weak financial position, reflected by a quick ratio of 0.6 and a debt-to-equity ratio of 2.5. However, its cash balance has grown 87% to $235 million since last year's first-quarter.
: Teekay is up 54% this year, outpacing major U.S. indices. The stock trades at a price-to-earnings ratio of 14, a discount to the market and peers in energy transport, and offers a cash distribution yield of 9.9%. Cash distributions are taxed differently than dividends.
The model downgraded
( REVU), which provides test preparation services and education consulting, to "sell."
: In the second quarter, the company lost $1.8 million, or 8 cents, after posting a year-earlier profit of $265,000, breaking even in terms of earnings per share. Revenue fell 8% to $31 million. Its gross margin declined from 66% to 56% and Its operating margin sank into negative territory. Princeton Review has less-than-ideal liquidity, reflected by a quick ratio of 0.7. But a debt-to-equity ratio of 0.1 demonstrates modest leverage.
: Princeton Review has fallen 13% this year, underperforming major U.S. indices. The company doesn't pay dividends.
-- Reported by Jake Lynch in Boston