TheStreet.com Ratings provides exclusive stock, ETF and mutual fund ratings and commentary based on award-winning, proprietary tools. Its "safety first" approach to investing aims to reduce risk while seeking outperformance on a total return basis.TheStreet.com's stock-rating model upgraded EMC ( EMC) to "buy." The company develops and sells data-storage products. The numbers: First-quarter revenue decreased 9.2% from a year earlier to $3.1 billion as net income declined 23% to $194 million and earnings per share fell 17% to 10 cents. Operating margin dropped from 12% to 9% and net margin decreased from 7% to 6%. The Hopkinton, Mass.-based company boosted its cash balance 29% to $7.2 billion as it cut debt obligations 13% to $3 billion. A quick ratio of 1.8 and a debt-to-equity ratio of 0.2 indicate a strong balance sheet. The stock: EMC has rallied 29% this year, outperforming major U.S. indices. The stock is expensive, trading at a price-to-earnings ratio of 21. Like many of its tech peers, EMC doesn't pay dividends. The model upgraded Japan-based Nidec ( NJ) to "buy." The company makes motors and components for appliances, computers and industrial equipment. The numbers: Fiscal fourth-quarter revenue plummeted 72% to $667 million. Net income and earnings per share dropped 67% to $35 million and 6 cents, respectively, as net margin inched up to 5%. The company has doubled its cash reserves to $2 billion, pushing its quick ratio past 1, a measure of adequate liquidity. However, the company also doubled its debt to $2.3 billion. The stock: Nidec has surged 68% this year on signs of economic improvement and a tech spending rebound. The stock trades at an expensive price-to-earnings ratio of 30 and offers a dividend yield less than 1%.
The model upgraded NuStar GP ( NSH) to "buy." The San Antonio-based company controls NuStar Energy ( NS), one of the largest asphalt refiners and oil terminal operators in the U.S. The numbers: First-quarter revenue decreased 19% to $13 million as net income and earnings per share dropped 20% to $12 million and 28 cents, respectively. Net margin fell from 95% to 94%. The balance sheet holds just $4.2 million of cash reserves, amounting to a low quick ratio of 0.6. But the debt-to-equity ratio is marginally past zero, indicating extremely modest leverage. The stock: NuStar GP has gained 32% this year, outperforming major U.S. indices. The stock trades at a price-to-earnings ratio of 16 and pays a cash distribution yield of 7.3%. Cash distributions are taxed differently than dividends. The model downgraded Indian drugmaker Dr. Reddy's Laboratories ( RDY) to "hold." The numbers: Fiscal fourth-quarter revenue declined 9.1% to $288 million as the company swung to a net loss of $199 million from a profit of $24 million in the year-earlier quarter. Operating margin improved from 9% to 25%, but net margin swung deep into negative territory. The cash balance has more than halved to $120 million since last year's fourth quarter and a quick ratio of 0.8 indicates less-than-ideal liquidity. However, a debt-to-equity ratio of 0.5 demonstrates conservative leverage. The stock: Dr. Reddy's Laboratories has increased 62% this year, outperforming all major U.S. indexes. The stock's dividend yield is less than 1%. The model upgraded China-Biotics ( CHBT) to "buy." The company develops and distributes probiotic products in China. Probiotics are microbial supplements designed to improve digestion and health. The numbers: Fiscal fourth-quarter revenue rose 19% to $16 million as net income decreased 18% to $6.6 million or 39 cents per share. Net margin fell from 61% to 42%. The cash balance has increased 10% to $71 million since the year-earlier quarter and a quick ratio of 2.6 indicates strong liquidity. A debt-to-equity ratio of 0.3 reflects conservative leverage. The stock: China-Biotics has ascended 8% this year, outperforming the Dow Jones Industrial Average and S&P 500 Index. The stock trades at a low price-to-earnings ratio of 10, but doesn't pay dividends.