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 total return performance.

BOSTON ( TheStreet) -- TheStreet.com's stock-rating model upgraded Canadian aerospace and defense company CAE ( CAE) to "buy."

The numbers: Fiscal first-quarter profit decreased 42% to $27 million, or 11 cents a share, as revenue declined 2% to $383 million. Its gross margin rose from 23% to 24% and its operating margin remained steady at 19%. A quick ratio of 0.7 indicates less-than-ideal liquidity. A debt-to-equity ratio of 0.5 reflects conservative leverage.

The stock: CAE is up 18% this year, beating the Dow Jones Industrial Average and S&P 500 Index. The stock trades at a price-to-earnings ratio 13, indicating a discount to the market, but parity with aerospace and defense peers.

The model upgraded oil and gas equipment maker Dresser-Rand ( DRC) to "buy."

The numbers: Second-quarter net income rose 29% to $60 million and earnings per share climbed 35% to 74 cents, boosted by a lower share count. Revenue grew 12% to $606 million. Its gross margin was unchanged at 30%, but its operating margin rose from 14% to 16%. A quick ratio of 0.7 demonstrates less-than-ideal liquidity. A debt-to-equity ratio of 0.4 reflects conservative leverage.

The stock: Dresser-Rand has advanced 81% this year, more than major U.S. indices. The stock trades at a price-to-earnings ratio of 12, a discount to the market and oil and gas equipment peers. The company doesn't pay dividends.

The model upgraded medical-device maker Masimo ( MASI) to "buy."

The numbers: Second-quarter net income jumped 24% to $13 million and earnings per share rose 22% to 22 cents, restrained by a higher share count. Revenue grew 12% to $84 million. Its gross margin rose from 73% to 74% and its operating margin increased from 22% to 24%. A quick ratio of 3.9 indicates outstanding liquidity. The company holds minimal debt.

The stock: Masimo is down 13% this year, lagging behind major U.S. indices. The stock trades at a price-to-earnings ratio of 40, a premium to the market and health care equipment peers. The company doesn't pay dividends.

The model upgraded Plexus ( PLXS), a provider of manufacturing services, to "buy."

The numbers: Fiscal third-quarter net income decreased 47% to $9.2 million and earnings per share fell 44% to 23 cents, cushioned by a lower share count. Revenue dropped 17% to $379 million. Its gross margin declined from 12% to 11% and its operating margin descended from 5% to 3%. A quick ratio of 1.4 indicates adequate liquidity. A debt-to-equity ratio of 0.3 is below the industry average, demonstrating restrained leverage.

The stock: Plexus is up 55% this year, beating major U.S. indices. The stock trades at a price-to-earnings ratio of 22, a premium to the market, but a discount to manufacturing service peers.

The model downgraded health-care-facility operator Psychiatric Solutions ( PSYS) to "hold."

The numbers: Second-quarter net income rose 18% to $34 million and earnings per share jumped 21% to 63 cents. Revenue grew 6% to $471 million. Its gross margin rose from 17% to 19% and its operating margin climbed from 15% to 16%. A quick ratio of 1.4 indicates adequate liquidity. But a debt-to-equity ratio of 1.3 reflects excessive debt.

The stock: Psychiatric Solutions has dropped 5% this year, trailing major U.S. indices. The stock trades at a price-to-earnings ratio of 13, a discount to the market and health care facility peers. The company doesn't pay dividends.

-- Reported by Jake Lynch in Boston.

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