Corus, Dril-Quip: Ratings Changes

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BOSTON ( TheStreet) -- TheStreet.com's stock-rating model upgraded media company Corus Entertainment ( CJR) to "hold."

The numbers: The company swung to a fiscal third-quarter loss of $145 million, or $1.81 a share, from a profit of $38 million, or 45 cents a share, in the year-earlier period. Revenue declined 6% to $195 million. The company's gross margin rose from 47% to 53% and its operating margin increased from 27% to 29%. A quick ratio of 1 demonstrates adequate liquidity. A debt-to-equity ratio of 0.8 reflects reasonable leverage.

The stock: Corus is up 48% this year, more than major U.S. indices. The company does not have a trailing price-to-earnings ratio due to the size of its fiscal third-quarter loss. Shares pay a 3.4% dividend yield.

The model upgraded Dril-Quip ( DRQ), a maker of offshore-drilling equipment, to "buy."

The numbers: Second-quarter net income declined 4% to $27 million, but earnings per share remained flat at 68 cents due to a lower share count. Revenue dropped 7% to $133 million. The company's gross margin rose from 44% to 45% and its operating margin increased from 26% to 27%. Dril-Quip has an ideal financial position, with $116 million of cash, compared to $1.4 million of debt.

The stock: Dril-Quip has surged 163% this year, beating major U.S. indices. The stock trades at a price-to-earnings ratio of 21, indicating parity with the market, but a premium to oil and gas equipment peers. The company doesn't pay dividends.

The model upgraded health-care-equipment maker Gen-Probe ( GPRO) to "buy."

The numbers: Second-quarter net income fell 20% to $20 million and earnings per share dropped 16% to 38 cents, cushioned by a lower share count. Revenue grew marginally to $121 million. The company's gross margin declined from 80% to 76% and its operating margin fell from 30% to 22%. The company has an admirable financial position, with $464 million of cash, compared to $241 million of debt.

The stock: Gen-Probe is up 3% this year, lagging behind major U.S. indices. The stock trades at a price-to-earnings ratio of 25, a premium to the market, but a discount to health care equipment peers. The company doesn't pay dividends.

The model upgraded oil and gas driller Helmerich & Payne ( HP) to "buy."

The numbers: Fiscal third-quarter profit dropped 58% to $53 million, or 50 cents a share, as revenue decreased 26% to $388 million. The company's gross margin declined from 48% to 43% and its operating margin fell from 35% to 23%. The company has adequate liquidity, evident in its quick ratio of 1.3. Its debt-to-equity ratio of 0.2 is below the industry average, demonstrating restrained leverage.

The stock: Helmerich & Payne has surged 94% this year, beating major U.S. indices. The stock trades at a price-to-earnings ratio of 11, a discount to the market and oil and gas peers. Shares pay a 0.5% dividend yield.

The model downgraded natural gas and electric utility Vectren ( VVC) to "hold."

The numbers: The company swung to a second-quarter loss of $6.7 million, or 8 cents a share, from a profit of $4.7 million, or 6 cents a share, in the year-earlier period. Revenue dropped 19% to $376 million. Vectren's gross margin increased from 17% to 23% and its operating margin rose from 7% to 9%. A quick ratio of 0.4 indicates weak liquidity. A debt-to-equity ratio of 1.2 reflects higher-than-ideal leverage.

The stock: Vectren is down 6% this year, underperforming major U.S. indices. The stock trades at a price-to-earnings ratio of 15, a discount to the market, but a premium to multi-utility peers. Shares pay a 5.7% dividend yield.

-- Reported by Jake Lynch in Boston.

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