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Whirlpool, U.S. Steel Lead High-Flying Stocks

SanDisk, Whirlpool and U.S. Steel hit 52-week highs yesterday.
Author:

BOSTON (

TheStreet

) -- Stocks rallied on Monday after analysts upgraded blue-chips, including

Intel

(INTC) - Get Report

and

Alcoa

(AA) - Get Report

. Here are three mid-cap stocks that hit 52-week highs amid the optimism.

3. SanDisk

(SNDK)

jumped 6.2% to $26.63. Shares of the memory-card maker have jumped 32% during the past month.

Standard and Poor's

upgraded its outlook on the company to "positive" last week, citing improved demand.

The numbers

: SanDisk swung to a third-quarter profit of $231 million, or 99 cents a share, from a loss of $166 million, or 74 cents, a year earlier. Revenue grew 14% to $935 million. SanDisk's gross margin expanded from 9% to 53%, and its operating margin climbed from negative territory to 26%. SanDisk has $1.5 billion of cash and $990 million of debt.

TST Recommends

The stock

: We rate SanDisk "sell." The stock has almost tripled this year, beating major U.S. indices. However, the stock has fallen 25% during the past two years. We give SanDisk a growth score of 3.3 out of 10 and a financial strength score of 2.9 out of 10. Despite encouraging third-quarter results and price performance, the company endured sizable losses in 2008.

2. Whirlpool

(WHR) - Get Report

increased 3.5% to $83.55. The appliance maker's shares have gained 30% during the past month as investors migrated into undervalued stocks.

The numbers

: Third-quarter profit dropped 47% to $87 million, or $1.15 a share. Revenue fell 8% to $4.5 billion. Whirlpool's gross margin remained steady at 17%, but its operating margin inched up from 4% to 5%. Whirlpool has a weak liquidity position, with a quick ratio of 0.6. Its 0.8 debt-to-equity ratio indicates reasonable leverage.

The stock

: We rate Whirlpool "hold." Its stock has more-than-doubled this year as sales decreased 17% and profit dropped 51%. The shares are cheaper than those of peers based on projected earnings, sales and cash flow. Still, our model gives the company a growth score of 3.7 out of 10. Whirlpool hasn't improved its margins or increased profit.

1. U.S. Steel

(X) - Get Report

rose 6.3% to $52.35. The metal producer's shares have been rising on higher prices and increased output. They have climbed 27% during the past month.

The numbers

: U.S. Steel swung to a third-quarter loss of $303 million, or $2.11 a share, from a profit of $919 million, or $7.79, a year earlier. Revenue plummeted 61% to $2.8 billion. U.S. Steel's gross and operating margins fell from 23% and 18%, respectively, into negative territory. The company has an adequate liquidity position, reflected by its quick ratio of 1.4. Its 0.7 debt-to-equity ratio indicates reasonable leverage.

The stock

: We rate U.S. Steel "sell." Its stock has returned 41% this year, but the company continues to suffer from margin deterioration. We give U.S. Steel a growth score of 1.4 out of 10 and a volatility score of 2.5 out of 10. The company's shares tend to exaggerate market movements, making U.S. Steel an attractive trading vehicle, but a volatile investment.

-- Reported by Jake Lynch in Boston.