BOSTON ( TheStreet) -- U.S. indices gained on Thursday, but our quantitative equity model, which grades stocks on fundamentals and performance, soured on three financial names. 3. The model downgraded credit-card company Discover Financial Services ( DFS) to "sell." The numbers: Fourth-quarter net income decreased 18% to $353 million and earnings per share dropped 35% to 60 cents, hurt by a higher share count. Revenue declined 1.5% to $1.4 billion. Discover's operating margin climbed from negative territory to 10%. The company holds $15 billion of cash and $2.4 billion of debt. The stock: Discover has advanced 81% during the past year, beating major U.S. indices, but fell 17% during the past two years. The shares are cheap relative to those of consumer finance peers based on all our valuation measures. But a growth score of 3.2 out of 10 and a volatility score of 2.5 hurt Discover's overall ranking. 2. The model downgraded Marsh & McLennan ( MMC), owner of investment management, insurance and consulting businesses, to "hold." The numbers: Fourth-quarter net income tumbled 53% to $38 million and earnings per share plummeted 77% to 3 cents, hurt by a higher share count. Revenue increased 3.5% to $2.8 billion. Marsh & McLennan's operating margin narrowed from 11% to 4.6%. The company holds $1.8 billion of cash and $3.6 billion of debt. The stock: Marsh & McLennan has gained 3.4% during the past year, trailing U.S. benchmarks. The shares are expensive relative to those of insurance peers based on trailing earnings and book value. They are priced fairly when considering sales and projected earnings. Marsh receives a performance score of 3.7 out of 10. 1. The model downgraded South Korean bank Shinhan Financial Group ( SHG) to "sell." The numbers: Fourth-quarter net income soared 42% to $229 million, but earnings per share rose a more-modest 18% to 71 cents because of a larger float. Revenue grew 14% to $6.2 billion. Shinhan's operating margin improved from 53% to 57%. The company holds $16 billion of cash and $50 billion of debt. The stock: Shinhan has returned 80% during the past year, outperforming major U.S. indices, but dropped 30% during the past two years. The shares are undervalued relative to those of commercial bank peers based on trailing earnings, book value and sales. However, a volatility score of 2.3 out of 10 and a financial strength score of 0.9 harm Shinhan's net grade. -- Reported by Jake Lynch in Boston.