For the second quarter of fiscal year 2008, Mercury General's total revenue slipped 2.3% year over year to $787.90 million, weighed down by lower net premiums earned and a decline in net investment income. Net premiums declined 5.7% to $711.20 million while net investment income dropped 4.4% to $39.00 million during the quarter. Deteriorating operating income. Net income for the quarter increased 1.8% year over year to $70.73 million or $1.29 per share. However, excluding net realized investment gains of $23.72 million or 43 cents per share, the company's operating income dropped 25.4% to $47.00 million or 86 cents per share from $63.02 million or $1.15 per share. The company had a lower debt-to-equity ratio of 0.08, implying its successful management of debt. For the latest second quarter, the company's combined ratio increased to 97.00% from 94.00% a year ago on an increase in the expenses ratio, which grew to 28.20% from 27.10%. The loss ratio also increased to 68.80% from 66.90% a year ago. Despite the increase, the combined ratio remained below the regulatory benchmark of 100.00%, reflecting sound underwriting results. For the second quarter of fiscal year 2008, the company's return on equity diminished 452 basis points to 9.36% from 13.88% while return on assets reduced 163 basis points to 4.05% from 5.68% a year ago MCY had been rated a sell since April 18, 2008. Intersil ( ISIL) has been upgraded from hold to buy. Intersil engages in the design and manufacture of analog integrated circuits. It offers a portfolio of application specific standard products and general purpose proprietary products for high-end consumer, industrial, communications and computing markets. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and a generally disappointing performance in the stock itself.