Revenue rose by 29% since the year-ago quarter, and EPS improved. We feel the company is poised for EPS growth in the coming year. First Mercury's debt-to-equity ratio of 0.2 is below the industry average, implying very successful management of debt levels. The 22.3% gross profit margin, however, is rather low, having decreased from the same quarter last year. Net operating cash flow declined marginally to $26.1 million.

We've upgraded Marathon Oil ( MRO) from hold to buy, driven by its attractive valuation levels, considering its current price compared to earnings, book value and other measures. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.

Revenue fell by 45.3% since the same quarter a year prior, and EPS decreased. Net income fell by 61.4% to $282 million but significantly outperformed the S&P 500 and the oil, gas and consumable fuels industry average. Marathon's gross profit margin of 16.3% is rather low, though it has increased from the year-ago period. The net profit margin of 3.1% trails the industry average. Net operating cash flow fell 32.5% to $555 million compared with the year-ago quarter but exceeded the industry average cash flow growth rate of -43.2%.

We've downgraded Starent Networks ( STAR) from buy to hold. Strengths include the company's robust revenue growth, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, we find that we feel that the company's cash flow from its operations has been weak overall.

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