) -- U.S. indices gained yesterday as new data suggested that unemployment was easing. Here are three stocks that posted dramatic gains and hit 52-week highs amid the optimism.
3. Marvell Technology Group
rose 2.2% to $18.67. The semiconductor maker's shares have rallied 20% since it reported an increase in quarterly revenue and profit on Dec. 3.
: Fiscal third-quarter profit almost tripled to $202 million, or 31 cents a share. Revenue inched up 2% to $803 million. Marvell's gross margin widened from 51% to 57%, and its operating margin expanded from 9% to 21%. The company has $1.4 billion of cash and just $3 million of debt. During the past three years, it has boosted revenue 6% annually, on average, as profit decreased.
: We rate Marvell Technology "hold." Although its latest quarterly results demonstrate a dramatic upturn, the shares have almost tripled in anticipation of the turnaround. Marvell is more expensive than the average chipmaker based on trailing earnings, sales and cash flow. However, the stock is cheap based on projected earnings and book value. Marvell's return on equity, a measure of profitability, consistently trails the industry average.
increased 4.7% to $22.31. The coffee shop chain's shares have risen 14% since it reported quarterly profit growth on Nov. 5.
: Fiscal fourth-quarter net income multiplied twenty-seven times to $150 million, or 20 cents a share, after the company closed stores. Revenue dropped 4% to $2.4 billion. The company's gross margin widened from 13% to 20%, and its operating margin increased from 3% to 9%. Its balance sheet is liquid, with $666 million of cash and $550 million of debt. During the past three years, Starbucks has increased revenue 8% annually, on average, as profit declined.
: We rate Starbucks "buy." Few have capitalized on recessionary pressures as effectively as Starbucks. The once over-expanded chain has downsized, focused and repaired its balance sheet. Although its shares are expensive relative to those of restaurant peers based on trailing earnings, book value and cash flow, strengthened margins and a leaner operation compensate for the premium.
1. UnitedHealth Group
jumped 6.4% to $30.31. Shares of the health insurer are rallying amid talk of national subsides.
: Third-quarter net income increased 13% to $1 billion and earnings per share rose 19% to 89 cents. Revenue advanced 8% to $22 billion. UnitedHealth's gross margin declined from 24% to 23%, but its operating margin remained steady at 8%. The company has a stable financial position, with $11 billion of cash and $11 billion of debt. During the past three years, revenue has expanded 9% annually, on average, as earnings per share climbed modestly.
: We rate UnitedHealth "hold." Although the company remained profitable during the recession, its stock has suffered from regulatory uncertainty. The shares have lost 44% of their market value since the beginning of 2007. The stock is cheap relative to those of its peers based on all our valuation measures. However, regulatory interference is still a concern.
-- Reported by Jake Lynch in Boston.