BOSTON ( TheStreet) -- Here are three critical rating changes from TheStreet's stock model.4. The model downgraded electricity provider Edison International ( EIX) to "hold." The numbers: Fourth-quarter profit decreased 8% to $212 million, or 65 cents a share, as revenue declined 5.5% to $3.1 billion. Edison International's operating margin remained steady at 14%. It holds $1.7 billion of cash and $11 billion of debt. The stock: Edison International has gained 31% during the past year, underperforming U.S. indices. The stock trades at a price-to-projected-earnings ratio of 10. Its PEG ratio, a measure of value relative to growth, of 0.5 reflects a 72% discount to the industry average. A PEG ratio below 1 indicates cheap shares. 3. The model downgraded industrial machine maker Eaton Corp. ( ETN) to "hold." The numbers: Fourth-quarter profit increased 29% to $211 million, or $1.25 a share, as revenue fell 10% to $3.1 billion. Eaton's operating margin expanded from 4.7% to 6.4%. The company holds $773 million of cash and $3.5 billion of debt. The stock: Eaton shares have more than doubled during the past year, beating major benchmarks. The stock sells for a price-to-projected-earnings ratio of 13, a discount to peers. Its PEG ratio of 0.4 represents a 61% discount to the industry average.
2. The model downgraded mobile-phone chipmaker Qualcomm ( QCOM) to "hold." The numbers: Fiscal first-quarter profit soared 147% to $841 million, or 50 cents a share, as revenue grew 6.1% to $2.7 billion. Qualcomm's operating margin widened from 30% to 33%. Its balance sheet has $12 billion of cash and $199 million of debt. The stock: Qualcomm has gained 16% during the past year, lagging behind major indices. The stock trades at a price-to-projected-earnings ratio of 14, a discount to peers. Its PEG ratio of 0.2 represents a 50% discount to the industry average. 1. The model upgraded investment manager Berkshire Hathaway ( BRK.A) to "buy." The numbers: Fourth-quarter profit rocketed to $3.1 billion, or $1,969 a share, from $117 million, or $76. Revenue grew 29% to $30 billion. The operating margin climbed from negative territory to 16%. Berkshire holds $31 billion of cash and $39 billion of debt. The stock: Berkshire's A shares have gained 60% during the past year and its B shares have increased 65%. The A shares are expensive based on all our valuation measures, including book value and cash flow. The premium is justified based on growth and financial strength. -- Reported by Jake Lynch in Boston.