The numbers: The company swung to a second-quarter profit of $9.7 million, or 12 cents a share, from a loss of $350,000, or 1 cent, in the year-earlier period. Revenue increased 55% to $33 million. Its gross margin rose from 40% to 43%, but its operating margin dropped from 10% to 7%. The company has a strong financial position, with $77 million of debt, compared to $79 million of cash. A debt-to-equity ratio of 0.3 indicates fiscal prudence.

The stock: Jaguar Mining has more than doubled this year, outpacing major U.S. indices. As a result of net losses in the third and fourth quarter of 2008, the stock now trades at a price-to-earnings ratio of 95, a premium to gold peers and the market. The company doesn't pay dividends.

The model upgraded aircraft-components maker Triumph Group ( TGI) to "buy."

The numbers: Fiscal first-quarter net income decreased 27% to $18 million and earnings per share dropped 16% to $1.30. Revenue fell 1% to $316 million. Its gross margin declined from 31% to 29% and its operating margin fell from 14% to 12%. A quick ratio of 1.1 demonstrates ample liquidity and a debt-to-equity ratio of 0.5 indicates conservative leverage.

The stock: Triumph Group is up 6% this year, underperforming major U.S. indices. The stock trades at a price-to-earnings ratio of 8, a discount to aerospace and defense peers and the market. The shares offer a dividend yield of less than 1%.

The model upgraded health-care-equipment maker Young Innovations ( YDNT) to "buy."

The numbers: Second-quarter revenue declined 5% to $25 million, but net income advanced 7% to $3.3 million and earnings per share climbed 11% to 42 cents. Its gross margin rose from 57% to 60% and its operating margin increased from 19% to 22%. A quick ratio of 1.2 indicates ample liquidity and a debt-to-equity ratio of 0.2 demonstrates modest leverage.

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