3 Stocks Reiterated As A Buy: INTC, MSFT, MRK

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:

Intel Corp:

Intel (Nasdaq: INTC) 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, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, solid stock price performance and expanding profit margins. 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:
  • Compared to its closing price of one year ago, INTC's share price has jumped by 28.22%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, INTC should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 2.8%. Since the same quarter one year prior, revenues slightly increased by 1.5%. 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.
  • INTC's debt-to-equity ratio is very low at 0.23 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, INTC has a quick ratio of 1.68, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The gross profit margin for INTEL CORP is currently very high, coming in at 74.80%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 15.12% trails the industry average.

Intel Corporation designs, manufactures, and sells integrated digital technology platforms worldwide. It operates through PC Client Group, Data Center Group, Other Intel Architecture, Software and Services, and All Other segments. Intel has a market cap of $154.0 billion and is part of the technology sector and electronics industry. Shares are up 19.1% year-to-date as of the close of trading on Monday.

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Microsoft Corp:

Microsoft (Nasdaq: MSFT) has been reiterated by TheStreet Ratings as a buy with a ratings score of A-. According to TheStreet Ratings team: The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, notable return on equity, reasonable valuation levels, increase in stock price during the past year and good cash flow from operations. 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:
  • Although MSFT's debt-to-equity ratio of 0.26 is very low, it is currently higher than that of the industry average. Along with this, the company maintains a quick ratio of 3.01, which clearly demonstrates the ability to cover short-term cash needs.
  • 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 Software industry and the overall market, MICROSOFT CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. 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.
  • MICROSOFT CORP's earnings per share declined by 5.5% 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, MICROSOFT CORP increased its bottom line by earning $2.60 versus $2.00 in the prior year. This year, the market expects an improvement in earnings ($2.70 versus $2.60).

Microsoft Corporation develops, licenses, and supports software, services, and hardware devices. Its Windows division offers Windows operating system; Windows Services suite of applications and Web services, including Outlook.com and SkyDrive; Surface RT and Pro devices; and PC accessories. Microsoft has a market cap of $349.0 billion and is part of the technology sector and computer software & services industry. Shares are up 11.5% year-to-date as of the close of trading on Monday.

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Merck & Co Inc:

Merck (NYSE: MRK) has been reiterated by TheStreet Ratings as a buy with a ratings score of A-. According to TheStreet Ratings team: The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, expanding profit margins, solid stock price performance, growth in earnings per share and good cash flow from operations. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

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Highlights from the ratings report include:
  • The current debt-to-equity ratio, 0.56, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.23, which illustrates the ability to avoid short-term cash problems.
  • The gross profit margin for MERCK & CO is currently very high, coming in at 89.02%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of 16.61% trails the industry average.
  • Compared to where it was 12 months ago, this stock has enjoyed a nice rise of 25.35% which was in line with the performance of the S&P 500 Index. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
  • MERCK & CO has improved earnings per share by 9.6% 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, MERCK & CO reported lower earnings of $1.46 versus $2.00 in the prior year. This year, the market expects an improvement in earnings ($3.46 versus $1.46).
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 5.6%. Since the same quarter one year prior, revenues slightly dropped by 3.8%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

Merck & Co., Inc. provides various health solutions through its prescription medicines, vaccines, biologic therapies, animal health, and consumer care products worldwide. Merck has a market cap of $168.1 billion and is part of the health care sector and drugs industry. Shares are up 15.6% year-to-date as of the close of trading on Monday.

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