3 Stocks Reiterated As A Buy: CAT, CELG, BIDU

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

NEW YORK ( TheStreet) -- TheStreet Ratings team reiterated 3 stocks with a buy rating on Tuesday based on 32 different data factors including general market action, fundamental analysis and technical indicators. The in-depth analysis of these ratings decisions goes as follows:

Caterpillar Inc:

Caterpillar (NYSE: CAT) has been reiterated by TheStreet Ratings as a buy with a ratings score of B+. According to TheStreet Ratings team: The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, good cash flow from operations, solid stock price performance and growth in earnings per share. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

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Highlights from the ratings report include:
  • CAT's revenue growth has slightly outpaced the industry average of 6.5%. Since the same quarter one year prior, revenues slightly increased by 0.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • Net operating cash flow has increased to $1,897.00 million or 33.21% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -4.93%.
  • CATERPILLAR INC has improved earnings per share by 9.9% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, CATERPILLAR INC reported lower earnings of $5.75 versus $8.49 in the prior year. This year, the market expects an improvement in earnings ($6.20 versus $5.75).

Caterpillar Inc. manufactures and sells construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives worldwide. Caterpillar has a market cap of $63.9 billion and is part of the industrial goods sector and industrial industry. Shares are up 14.3% year-to-date as of the close of trading on Monday.

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Celgene Corp:

Celgene (Nasdaq: CELG) has been reiterated by TheStreet Ratings as a buy with a ratings score of B. According to TheStreet Ratings team: The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity, good cash flow from operations, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

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Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 26.1%. Since the same quarter one year prior, revenues rose by 18.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Biotechnology industry and the overall market, CELGENE CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly increased by 51.67% to $557.10 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 16.80%.
  • The gross profit margin for CELGENE CORP is currently very high, coming in at 96.58%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, CELG's net profit margin of 16.16% significantly trails the industry average.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.

Celgene Corporation, a biopharmaceutical company, discovers, develops, and commercializes therapies to treat cancer and immune-inflammatory related diseases in the United States and internationally. Celgene has a market cap of $61.3 billion and is part of the health care sector and drugs industry. Shares are down 9.4% year-to-date as of the close of trading on Monday.

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Baidu Inc:

Baidu (Nasdaq: BIDU) has been reiterated by TheStreet Ratings as a buy with a ratings score of B. According to TheStreet Ratings team: The company's strengths can be seen in multiple areas, such as its robust revenue growth, growth in earnings per share, increase in net income, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

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Highlights from the ratings report include:
  • BIDU's very impressive revenue growth greatly exceeded the industry average of 21.3%. Since the same quarter one year prior, revenues leaped by 59.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • BAIDU INC has improved earnings per share by 22.1% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, BAIDU INC increased its bottom line by earning $4.96 versus $4.78 in the prior year. This year, the market expects an improvement in earnings ($33.37 versus $4.96).
  • The net income growth from the same quarter one year ago has exceeded that of the Internet Software & Services industry average, but is less than that of the S&P 500. The net income increased by 24.0% when compared to the same quarter one year prior, going from $328.92 million to $407.82 million.
  • Despite currently having a low debt-to-equity ratio of 0.45, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 3.56 is very high and demonstrates very strong liquidity.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 73.48% over the past year, a rise that has exceeded that of the S&P 500 Index. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.

Baidu, Inc. provides Internet search services. Baidu has a market cap of $58.1 billion and is part of the technology sector and internet industry. Shares are down 6.8% year-to-date as of the close of trading on Monday.

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