Credit Suisse's 17 Most-Loved U.S. Stocks for Investors to Buy Now

Credit Suisse (CS) made changes to its "Global Focus List" on Monday including adding McDonald's  (MCD) and Beijing Enterprise Water to the list while deleting Dunkin' Brands (DNKN) and ITV Plc.

Credit Suisse's list of 39 stocks is a compilation of "best ideas across all regions that should better target global investor portfolios," the investment bank said in the report. While the stocks collectively under-performed the MSCI World index by -1.7% during in the third quarter, the Credit Suisse's Global Focus List has outperformed the broader index by 2.5% in 2015.

During the third quarter, stocks that stood out with positive performance - despite market volatility - included Southwest Airlines (LUV) , having gained 15% for the quarter ended Sept. 30. Other global outperformers included Canada's Loblaw Cos. and Mexico's FEMSA (FMX) . Underperforming stocks on Credit Suisse's global list included Marathon Oil Corp. (MRO) and Devon Energy (DVN) , which has lost 37%.

Here are the 17 U.S.-based companies on Credit Suisse's "Global Focus List." The stocks are paired with ratings from TheStreet Ratings for added perspective.

TheStreet Ratings uses a quantitative approach to rating over 4,300 stocks to predict return potential for the next year. The model is both objective, using elements such as volatility of past operating revenues, financial strength, and company cash flows -- and subjective, including expected equities market returns, future interest rates, implied industry outlook and forecasted company earnings.

Buying an S&P 500 stock that TheStreet Ratings rated a "buy" yielded a 16.56% return in 2014 beating the S&P 500 Total Return Index by 304 basis points. Buying a Russell 2000 stock that TheStreet Ratings rated a "buy" yielded a 9.5% return in 2014, beating the Russell 2000 index, including dividends reinvested, by 460 basis points last year.

 

AMG Chart AMG data by YCharts

1. Affiliated Managers Group Inc. (AMG)
Industry: Financial Services/Asset Management & Custody Banks
Year-to-date return: -16.7%

Credit Suisse Rating/Price Target: Outperform/$253
Credit Suisse Said: We continue to look for 3-5 deals over the next 12 months. AMG announced a new Wealth affiliate in 2Q (bringing Wealth AuM to ~35B), and its deal pipeline remains robust, skewed towards Alternative Managers (currently ~35% of earnings). Additionally, we expect buybacks to provide support in the event of slower deal execution. Sell side estimates currently embed zero deals, limited buybacks.

Diverse Manager Base coupled with resilient institutional flows have offset weakness in the retail channel (U.S. driven). Despite weaker industry flows, AMG posted OG of 2.6% (ann.) in 2Q vs. peer average of 0%.

TheStreet Said: TheStreet Ratings team rates AFFILIATED MANAGERS GRP as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

We rate AFFILIATED MANAGERS GRP (AMG) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, impressive record of earnings per share growth, compelling growth in net income and good cash flow from operations. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • AMG's revenue growth has slightly outpaced the industry average of 3.0%. Since the same quarter one year prior, revenues slightly increased by 1.6%. Growth in the company's revenue appears to have helped boost the 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. In comparison to the other companies in the Capital Markets industry and the overall market, AFFILIATED MANAGERS GRP's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
  • AFFILIATED MANAGERS GRP has improved earnings per share by 32.0% 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, AFFILIATED MANAGERS GRP increased its bottom line by earning $7.99 versus $6.49 in the prior year. This year, the market expects an improvement in earnings ($12.77 versus $7.99).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Capital Markets industry. The net income increased by 30.0% when compared to the same quarter one year prior, rising from $99.00 million to $128.70 million.
  • Net operating cash flow has slightly increased to $351.40 million or 7.06% when compared to the same quarter last year. Despite an increase in cash flow of 7.06%, AFFILIATED MANAGERS GRP is still growing at a significantly lower rate than the industry average of 107.32%.
  • You can view the full analysis from the report here: AMG

 

ADSK Chart ADSK data by YCharts

2. Autodesk  (ADSK)
Industry: Technology/Application Software
Year-to-date return: -13.4%

Credit Suisse Rating/Price Target: Outperform/$80
Credit Suisse Said: We believe that there are several significant drivers to Autodesk's financial performance, including: (1) increasing revenue per user due to the forced migration to subscription offerings; (2) monetizing new cloud-based add-on services and standalone software; (3) expanding the company's user base via rental license offerings; and (4) eventually raising maintenance pricing to converge with the higher-priced Basic Subscription model. In our view, these will result in meaningful long-term upside to revenue (at limited incremental cost) versus the market's current expectations as implied by Autodesk's current share price.


TheStreet Said: TheStreet Ratings team rates AUTODESK as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:

We rate AUTODESK (ADSK) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. 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 and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • ADSK's debt-to-equity ratio of 0.78 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that ADSK's debt-to-equity ratio is mixed in its results, the company's quick ratio of 2.12 is high and demonstrates strong liquidity.
  • The gross profit margin for AUTO DESK is currently very high, coming in at 89.34%. Regardless of ADSK's high profit margin, it has managed to decrease from the same period last year.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 9.8%. Since the same quarter one year prior, revenues slightly dropped by 4.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Software industry. The net income has significantly decreased by 852.4% when compared to the same quarter one year ago, falling from $31.30 million to -$235.50 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Software industry and the overall market, AUTODESK's return on equity significantly trails that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: ADSK

 

BXP Chart BXP data by YCharts

3. Boston Properties  (BXP)
Industry: Financial Services/Office REITs
Year-to-date return: -4.7%

Credit Suisse Rating/Price Target: Outperform/$149
Credit Suisse Said: BXP trades at a 16% discount to NAV compared with a 9% discount for peers. Management is taking the appropriate steps to correct the mispricing by selling assets ($750m in 2015), refinancing debt maturities, and continuing to execute on its fully-funded development pipeline.

We believe the discount is unwarranted as the company's portfolio quality is unrivaled, its management team has consistently proven its ability to successfully allocate capital, and the company's $2 billion development pipeline is undervalued.

TheStreet Said: TheStreet Ratings team rates BOSTON PROPERTIES INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

We rate BOSTON PROPERTIES (BXP) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, expanding profit margins, notable return on equity and increase in stock price during the past year. We feel its strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 9.8%. Since the same quarter one year prior, revenues slightly increased by 4.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Net operating cash flow has increased to $241.63 million or 30.76% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 16.24%.
  • 37.23% is the gross profit margin for BOSTON PROPERTIES which we consider to be strong. Regardless of BXP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, BXP's net profit margin of 13.18% is significantly lower than the industry average.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Real Estate Investment Trusts (REITs) industry average, but is greater than that of the S&P 500. The net income increased by 3.5% when compared to the same quarter one year prior, going from $79.30 million to $82.08 million.
  • 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. When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, BOSTON PROPERTIES's return on equity is below that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: BXP

 

DVN Chart DVN data by YCharts

4. Devon Energy  (DVN)
Industry: Energy/Oil & Gas Exploration & Production
Year-to-date return: -24.1%

Credit Suisse Rating/Price Target: Outperform/$62
Credit Suisse Said: Within the context of a cautious near-term outlook for E&Ps given oil price risk through 1H15, we believe DVN is well positioned to outperform given its defensive valuation, top quartile oil growth profile, and further accretion potential from EnLink. In a difficult energy tape, we believe the combination of 20-25% oil growth, a discounted valuation, and the potential for additional drop downs to EnLink will drive outperformance.

Based on our benchmarking study, DVN is drilling among the prolific wells in the Eagle Ford (EF). Analysis of recent EF data suggests that enhancements in completion are driving even better wells, increasing average IP rates. Given rising completion activity and the step change in well results, we see upside to our '15 production estimate of 97 MBoe/d in the Eagle Ford versus the Q314 average of 78 MBoe/d.

TheStreet Said: TheStreet Ratings team rates DEVON ENERGY CORP as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:

We rate DEVON ENERGY (DVN) a SELL. This is driven by a few notable weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 517.2% when compared to the same quarter one year ago, falling from $675.00 million to -$2,816.00 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, DEVON ENERGY's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $1,101.00 million or 46.26% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • The share price of DEVON ENERGY has not done very well: it is down 17.18% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • DEVON ENERGY has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, DEVON ENERGY turned its bottom line around by earning $3.89 versus -$0.10 in the prior year. For the next year, the market is expecting a contraction of 44.7% in earnings ($2.15 versus $3.89).
  • You can view the full analysis from the report here: DVN


FB Chart FB data by YCharts

5. Facebook  (FB)
Industry: Technology/Internet Software & Services
Year-to-date return: 25%

Credit Suisse Rating/Price Target: Outperform/$115
Credit Suisse Said: Within the context of a cautious near-term outlook for E&Ps given oil price risk through 1H15, we believe DVN is well positioned to outperform given its defensive valuation, top quartile oil growth profile, and further accretion potential from EnLink. In a difficult energy tape, we believe the combination of 20-25% oil growth, a discounted valuation, and the potential for additional drop downs to EnLink will drive outperformance.

Based on our benchmarking study, DVN is drilling among the prolific wells in the Eagle Ford (EF). Analysis of recent EF data suggests that enhancements in completion are driving even better wells, increasing average IP rates. Given rising completion activity and the step change in well results, we see upside to our '15 production estimate of 97 MBoe/d in the Eagle Ford versus the Q314 average of 78 MBoe/d.

TheStreet Said: TheStreet Ratings team rates FACE BOOK as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:

We rate FACEBOOK (FB) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, expanding profit margins and solid stock price performance. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth greatly exceeded the industry average of 6.8%. Since the same quarter one year prior, revenues rose by 38.9%. 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.
  • FB's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 8.47, which clearly demonstrates the ability to cover short-term cash needs.
  • Net operating cash flow has increased to $1,880.00 million or 40.19% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 19.40%.
  • The gross profit margin for FACEBOOK is currently very high, coming in at 94.81%. 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 17.78% trails the industry average.
  • Compared to its closing price of one year ago, FB's share price has jumped by 31.07%, exceeding the performance of the broader market during that same time frame. 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.
  • You can view the full analysis from the report here: FB

 

GE Chart GE data by YCharts

6. General Electric  (GE)
Industry: Industrials/Industrial Conglomerates
Year-to-date return: 14.7%

Credit Suisse Rating/Price Target: Outperform/$31
Credit Suisse Said: We see a number of company-specific catalysts to drive GE price performance in 2016. 1) Divestments of GECC assets should speed up by year end. The sooner GE can be de-designated as a SIFI, the sooner large share buy-backs can start (likely 2H16). 2) The approval of the Alstom acquisition should allow GE to pursue other Industrial acquisitions, which have effectively been on-hold since April 2014. This should help push up the overall GE valuation multiple. 3) GE still has momentum behind its GM expansion effort, where most other industrials are likely at peak margins. In addition, GE's 4% dividend yield should provide support to the stock price.

TheStreet Said: TheStreet Ratings team rates GENERAL ELECTRIC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

We rate GENERAL ELECTRIC (GE) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, expanding profit margins and solid stock price performance. We feel its strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • GE's revenue growth has slightly outpaced the industry average of 4.2%. Since the same quarter one year prior, revenues slightly increased by 0.2%. 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.
  • Net operating cash flow has increased to $6,299.00 million or 20.00% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 4.04%.
  • 40.46% is the gross profit margin for GENERAL ELECTRIC which we consider to be strong. 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 -4.25% 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. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • GENERAL ELECTRIC's earnings per share declined by 14.3% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, GENERAL ELECTRIC reported lower earnings of $1.37 versus $1.47 in the prior year. For the next year, the market is expecting a contraction of 5.1% in earnings ($1.30 versus $1.37).
  • You can view the full analysis from the report here: GE

 

HBI Chart HBI data by YCharts

7. Hanesbrands  (HBI)
Industry: Consumer Goods & Services/Apparel, Accessories & Luxury Goods
Year-to-date return: 3.2%

Credit Suisse Rating/Price Target: Outperform/$38
Credit Suisse Said: Strong and steady free cash flow generator with opportunity to catalyze EPS growth via acquisitions and mix shift towards premium priced products.

Hanesbrands continues to have one of the most robust earnings growth models in our universe driven by: (1) share capture in core innerwear and activewear businesses; (2) margin expansion with shift to premium product and leverage of fixed assets; (3) accretion from a healthy pipeline of acquisitions; and 4) excess cash generation.

TheStreet Said: TheStreet Ratings team rates HANESBRANDS as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

We rate HANESBRANDS (HBI) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins, solid stock price performance and notable return on equity. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 13.8%. Since the same quarter one year prior, revenues rose by 13.4%. 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.
  • 40.78% is the gross profit margin for HANESBRANDS which we consider to be strong. 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 6.23% trails the industry average.
  • HANESBRANDS's earnings per share declined by 39.1% 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, HANESBRANDS INC increased its bottom line by earning $0.99 versus $0.81 in the prior year. This year, the market expects an improvement in earnings ($1.64 versus $0.99).
  • 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. Looking ahead, the stock's 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 the other strengths this company displays justify these higher price levels.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Textiles, Apparel & Luxury Goods industry and the overall market, HANESBRANDS's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • You can view the full analysis from the report here: HBI

 

JPM Chart JPM data by YCharts

8. JPMorgan Chase  (JPM)
Industry: Financial Services/Diversified Banks
Year-to-date return: -0.24%

Credit Suisse Rating/Price Target: Outperform/$75
Credit Suisse Said: Our estimates of $5.90 per share for 2015 and $6.65 per share for 2016 imply earnings growth of 12% and 13%, respectively. As important as forecast growth are the forecast returns of 10.2% and 10.8% on stated common equity and ROTE of 12.9% and 13.5% in each of 2015 and 2016. Achievement of forecast returns would again be better than CS Large Cap Bank averages.

Catalysts: (1) continued fundamental outperformance and (2) proven manageability /reduction in GSIB capital surcharges. JPM has shown both an ability and willingness to optimize its balance sheet and capital deployment. It's also proven the value of a scaled, integrated financial services entity.

TheStreet Said: TheStreet Ratings team rates JPMORGAN CHASE as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

We rate JPMORGAN CHASE (JPM) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, increase in net income, expanding profit margins and attractive valuation levels. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • 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.
  • JPMORGAN CHASE has improved earnings per share by 23.5% 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, JPMORGAN CHASE increased its bottom line by earning $5.29 versus $4.32 in the prior year. This year, the market expects an improvement in earnings ($5.97 versus $5.29).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Commercial Banks industry average. The net income increased by 22.1% when compared to the same quarter one year prior, going from $5,572.00 million to $6,804.00 million.
  • The gross profit margin for JPMORGAN CHASE is currently very high, coming in at 89.85%. Regardless of JPM's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, JPM's net profit margin of 27.66% compares favorably to the industry average.
  • You can view the full analysis from the report here: JPM

 

MRO Chart MRO data by YCharts

9. Marathon Oil  (MRO)
Industry: Energy/Oil & Gas Exploration & Production
Year-to-date return: -31.8%

Credit Suisse Rating/Price Target: Outperform/$25
Credit Suisse Said: We believe the weakness in MRO and large cap peers is creating a buying opportunity, given productivity improvements in shale. MRO was the most efficient driller in the Eagle Ford in 2Q and well costs have fallen to $5.9m. Drilling efficiency is strong in the Bakken with well costs down to $5.9M.

MRO should become increasingly free cash-flow positive as the Eagle Ford production grows. The international business is already free cash-flow positive with or without Europe. The Bakken/SCOOP will eventually be free cash-flow positive also (assuming oil price recovery). MRO has taken its licks with peers in the downturn. However, MRO has higher multiple businesses within it (Eagle Ford, EG LNG, AOSP) and MRO's upstream cash margins have room to rise as shale production rises and the oil price recovers. As such, the stock is trading at an attractive discount to NAV relative to peers.

TheStreet Said: TheStreet Ratings team rates MARATHON OIL as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:

We rate MARATHON OIL (MRO) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 171.5% when compared to the same quarter one year ago, falling from $540.00 million to -$386.00 million.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, MARATHON OIL's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to $408.00 million or 62.50% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 40.64%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 207.54% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • MARATHON OIL has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, MARATHON OIL increased its bottom line by earning $1.41 versus $1.32 in the prior year. For the next year, the market is expecting a contraction of 197.9% in earnings (-$1.38 versus $1.41).
  • You can view the full analysis from the report here: MRO

 

MAR Chart MAR data by YCharts

10. Marriott International  (MAR)
Industry: Consumer Goods & Services/Hotels, Resorts & Cruise Lines
Year-to-date return: -5.4%

Credit Suisse Rating/Price Target: Outperform/$93
Credit Suisse Said: Because of its compelling total return profile, leading brands/rewards system and upside to North American incentive fees, MAR is one of the most compelling name in the gaming, leisure and lodging group. As the lodging cycle approaches later innings of the cycle MAR's asset light structure will provide downside support.

Despite the recent noise around Airbnb and the threat of other economy sharing lodging alternatives, which could have an industry-wide impact, we believe the industry remains well-positioned to achieve mid-single digit RevPAR growth in 2015, while supply growth still remains tame versus historical trends.

MAR is enjoying pipeline growth, benefits from tuck-in acquisitions, traction with emerging brands, and is committed to returning capital. MAR continues to stay on the forefront of technology and highlighted that it's leveraging social media, upgrading its mobile/internet booking capabilities, and addressing in-room opportunities (launch of Netflix at Marriott hotels).

TheStreet Said: TheStreet Ratings team rates MARRIOTT INTL INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

We rate MARRIOTT INTL (MAR) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and good cash flow from operations. We feel its strengths outweigh the fact that the company shows low profit margins.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • MAR's revenue growth has slightly outpaced the industry average of 3.3%. Since the same quarter one year prior, revenues slightly increased by 5.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 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. Although other factors naturally played a role, the company's strong earnings growth was key. 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.
  • MARRIOTT INTL has improved earnings per share by 35.9% 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, MARRIOTT INTL increased its bottom line by earning $2.54 versus $2.01 in the prior year. This year, the market expects an improvement in earnings ($3.13 versus $2.54).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Hotels, Restaurants & Leisure industry. The net income increased by 25.0% when compared to the same quarter one year prior, going from $192.00 million to $240.00 million.
  • Net operating cash flow has remained constant at $490.00 million with no significant change when compared to the same quarter last year. In addition, MARRIOTT INTL has modestly surpassed the industry average cash flow growth rate of -4.90%.
  • You can view the full analysis from the report here: MAR

 

MCD Chart MCD data by YCharts

11. McDonald's  (MCD)
Industry: Consumer Goods & Services/Restaurants
Year-to-date return: 11.9%

Credit Suisse Rating/Price Target: Outperform/$112
Credit Suisse Said: Our Outperform rating is based on 3 drivers: 1) Sales are turning: MCD has already indicated that global SSS should turn positive in 3Q15, led by strength in key international markets and from lapping the Asian supplier issue. However, our checks indicate US SSS are now starting to recover as well, driven by operational and menu changes and some new product wins. This momentum should build into 4Q with the launch of all-day breakfast. 2) Upside to estimates: We see ~5-6% potential upside to current '16 forecasts from higher SSS, SG&A cuts, and leverage. 3) Favorable risk-reward: We see a "floor" on MCD shares in the low-90s, supported by the dividend. Rising franchise mix should also put upward pressure on the multiple.

Upcoming Catalysts: 1) 3Q results Oct 22, 2) Biennial investor day Nov 10

TheStreet Said: TheStreet Ratings team rates MCDONALD'S CORP as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

We rate MCDONALD'S (MCD) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its notable return on equity, good cash flow from operations, solid stock price performance and expanding profit margins. We feel its strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market, MCDONALD'S return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has slightly increased to $1,513.50 million or 1.78% when compared to the same quarter last year. In addition, MCDONALD'S has also modestly surpassed the industry average cash flow growth rate of -4.90%.
  • 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. 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.
  • 44.36% is the gross profit margin for MCDONALD'S which we consider to be strong. Regardless of MCD's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, MCD's net profit margin of 18.50% compares favorably to the industry average.
  • MCD, with its decline in revenue, slightly underperformed the industry average of 3.3%. Since the same quarter one year prior, revenues slightly dropped by 9.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • You can view the full analysis from the report here: MCD

 

MU Chart MU data by YCharts

12. Micron Technology (MU)
Industry: Technology/Semiconductors
Year-to-date return: -47.2%

Credit Suisse Rating/Price Target: Outperform/$25
Credit Suisse Said: We believe that stock is near trough valuations and see fundamentals improving from here. Specifically (i) We expect DRAM demand to exceed supply in C2H16, and drive margin improvement for MU (iii) Our recent checks indicate that, barring Kingston (only 2% of overall demand), DRAM inventory at ODM, module houses and suppliers are lean (inventories are 4-5 weeks now versus 8 at the beginning of year), and Companies have been drawing down on PC DRAM inventory due to anticipated price declines - we expect that modest demand improvement can lead to supply shortages and drive DRAM pricing improvement. (iii) Structurally, Memory is a different industry now - higher concentration than ever (HHI 3300 now versus only 1900 in 2007), more diversified demand, and slowing supply - we argue margins more resilient than past, and expect a rerating as investors realize normalized earnings of >$2 per year. MU stock is currently trading 0.6x replacement cost of capacity and has EV/Sales of 1x - all attractive entry points in our opinion. Lastly, memory is today an essential technology for high profit companies like AAPL and GOOG - we would not be surprised if there is strategic investment given depressed stock levels.

TheStreet Said: TheStreet Ratings team rates MICRON TECHNOLOGY as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:

We rate MICRON TECHNOLOGY (MU) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, expanding profit margins and notable return on equity. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and weak operating cash flow.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The gross profit margin for MICRON TECHNOLOGY is rather high; currently it is at 50.50%. 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 13.08% trails the industry average.
  • MU, with its decline in revenue, slightly underperformed the industry average of 14.7%. Since the same quarter one year prior, revenues fell by 14.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • MICRON TECHNOLOGY has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, MICRON TECHNOLOGY reported lower earnings of $2.46 versus $2.55 in the prior year. For the next year, the market is expecting a contraction of 43.7% in earnings ($1.39 versus $2.46).
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income has significantly decreased by 59.0% when compared to the same quarter one year ago, falling from $1,150.00 million to $471.00 million.
  • You can view the full analysis from the report here: MU

 

MDLZ Chart MDLZ data by YCharts

13. Mondelez International  (MDLZ)
Industry: Consumer Non-Discretionary/Packaged Foods & Meats
Year-to-date return: 26.2%

Credit Suisse Rating/Price Target: Outperform/$52
Credit Suisse Said: With its strong emerging market platform (44% of sales) and excellent brands (Oreo, Cadbury, Trident), Mondelez is a key beneficiary of the consumer trend toward snacking in emerging markets.

We think the appointment of Nelson Peltz to the Board will lead to better execution by current management and an improvement in operating margins to 15-16% in 2016 and a substantial step higher in subsequent years. The recent divestiture of the coffee business is a good example of how we expect Peltz will continue to drive value creation for shareholders.

TheStreet Said: TheStreet Ratings team rates MONDELEZ INTERNATIONAL as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:

We rate MONDELEZ INTERNATIONAL (MDLZ) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its expanding profit margins, solid stock price performance, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel its strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • 42.49% is the gross profit margin for MONDELEZ INTERNATIONAL which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 5.29% is above that of the industry average.
  • Compared to its closing price of one year ago, MDLZ's share price has jumped by 37.67%, exceeding the performance of the broader market during that same time frame. 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.
  • The debt-to-equity ratio is somewhat low, currently at 0.78, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.37 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • MONDELEZ INTERNATIONAL earnings per share declined by 30.6% in the most recent quarter compared to the same quarter a year ago. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. We anticipate these figures will begin to experience more growth in the coming year. During the past fiscal year, MONDELEZ INTERNATIONAL reported lower earnings of $1.27 versus $1.28 in the prior year. This year, the market expects an improvement in earnings ($1.78 versus $1.27).
  • MDLZ, with its decline in revenue, slightly underperformed the industry average of 9.0%. Since the same quarter one year prior, revenues slightly dropped by 9.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • You can view the full analysis from the report here: MDLZ

 

SEE Chart SEE data by YCharts

14. Sealed Air  (SEE)
Industry: Materials/Paper Packaging
Year-to-date return: 8.1%

Credit Suisse Rating/Price Target: Outperform/$63
Credit Suisse Said: Given the significant cash flow generation SEE should realize over the next 12-24 months (that we expect to be returned to shareholders--with as much as 15-19pct of the mkt cap likely returned from now through 2016) as well as an acceleration in some of their volumes (specifically in meat packaging) and the raw material tailwinds, we believe SEE has the potential to drive solidly higher over the next 12 months.

At our Basic Materials conference management cautioned investors of larger than expected FX headwinds although reiterated their EPS guidance due to their aggressive buybacks (9.5 mil shares, or ~$475 mil, in 3Q as of 9/11).

TheStreet Said: TheStreet Ratings team rates SEALED AIR as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

We rate SEALED AIR CORP (SEE) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its expanding profit margins, notable return on equity and solid stock price performance. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • 39.09% is the gross profit margin for SEALED AIR which we consider to be strong. 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 1.57% trails the industry average.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. In comparison to other companies in the Containers & Packaging industry and the overall market on the basis of return on equity, SEALED AIR has underperformed in comparison with the industry average, but has greatly exceeded that of the S&P 500.
  • Compared to its closing price of one year ago, SEE's share price has jumped by 56.71%, exceeding the performance of the broader market during that same time frame. 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.
  • SEALED AIR has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from 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, SEALED AIR increased its bottom line by earning $1.20 versus $0.44 in the prior year. This year, the market expects an improvement in earnings ($2.25 versus $1.20).
  • SEE, with its decline in revenue, slightly underperformed the industry average of 1.9%. Since the same quarter one year prior, revenues slightly dropped by 9.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • You can view the full analysis from the report here: SEE

 

LUV Chart LUV data by YCharts

15. Southwest Airlines  (LUV)
Industry: Industrials/Airlines
Year-to-date return: -4.2%

Credit Suisse Rating/Price Target: Outperform/$52
Credit Suisse Said: LUV's de-rating has been the sharpest among peers, which seems unwarranted given that unit revenues are still outperforming the industry combined with the quality of the balance sheet, insulation from currency headwinds, and rising shareholder returns. Unit revenue performance is still solid versus domestic peers (only trailing JBLU), especially excluding stage and gauge headwinds and considering how much of the network is under development.

We see significant opportunity from numerous revenue levers and believe consensus is underappreciating the yield tailwind that comes with maturation of LUV's markets under development. LUV's consensus 2016 multiple of 10x is nearly 8 turns below the 17.6x average in 2014 and is well below record low levels seen in mid-2012.

TheStreet Said: TheStreet Ratings team rates SOUTHWEST AIRLINES as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:

We rate SOUTHWEST AIRLINES (LUV) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, expanding profit margins, solid stock price performance and largely solid financial position with reasonable debt levels by most measures. We feel its strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • LUV's revenue growth has slightly outpaced the industry average of 5.0%. Since the same quarter one year prior, revenues slightly increased by 2.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • SOUTHWEST AIRLINES has improved earnings per share by 34.3% 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, SOUTHWEST AIRLINES increased its bottom line by earning $1.65 versus $1.06 in the prior year. This year, the market expects an improvement in earnings ($3.47 versus $1.65).
  • 38.27% is the gross profit margin for SOUTHWEST AIRLINES which we consider to be strong. 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 11.89% trails the industry average.
  • Powered by its strong earnings growth of 34.32% and other important driving factors, this stock has surged by 37.37% over the past year, outperforming the rise in the S&P 500 Index during the same period. 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.
  • The current debt-to-equity ratio, 0.38, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that LUV's debt-to-equity ratio is low, the quick ratio, which is currently 0.52, displays a potential problem in covering short-term cash needs.
  • You can view the full analysis from the report here: LUV

 

TSLA Chart TSLA data by YCharts

16. Tesla Motors  (TSLA)
Industry: Consumer Goods & Services/Automobile Manufacturers
Year-to-date return: 2%

Credit Suisse Rating/Price Target: Outperform/$325
Credit Suisse Said: We believe that Electric Vehicles have inherent advantages vs internal combustion vehicles and will be disruptive to the $1 trillion+ new vehicle industry (slowly, over a long period of time). Tesla has significant competitive advantages that we believe are sustainable. We see major battery cost reductions as highly probable and leading to near cost-parity to internal combustion vehicle's by 2018, while still offering ~$2k per year in fuel savings to the customer, which can either drop to margin or be used to drive share.

Sentiment currently very weak on Model X ramp / Model S demand concerns. We're encouraged that Model S volume continues to grow in US in 3rd year in market (+52% YTD vs luxury sedan segment down 13%)...and in Europe (+63% YTD). Model X addressable market is almost 2.5x the size of Model S market in US...if Model X gets to 5% share (vs 8% for Model S), incremental volume in US alone is 40k units (vs current Model S global run-rate of 46k).

Key catalyst is achieving positive EPS and Cash Flow. We see this occurring sometime in 1H16, based on incremental margin on volume growth driven by Model X. Combined with Model 3 unveil and initial reservations in March 2016, we see late 2015 / early 2016 as a favorable time for an investment in Tesla.

TheStreet Said: TheStreet Ratings team rates TESLA MOTORS as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:

We rate TESLA MOTORS (TSLA) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. Among the primary strengths of the company is its robust revenue growth -- not just in the most recent periods but in previous quarters as well. At the same time, however, we also find weaknesses including deteriorating net income, generally higher debt management risk and disappointing return on equity.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth greatly exceeded the industry average of 7.3%. Since the same quarter one year prior, revenues rose by 24.1%. 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.
  • TESLA MOTORS has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, TESLA MOTORS reported poor results of -$2.36 versus -$0.71 in the prior year. This year, the market expects an improvement in earnings (-$0.79 versus -$2.36).
  • In its most recent trading session, TSLA has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • The gross profit margin for TESLA MOTORS is currently lower than what is desirable, coming in at 31.91%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -19.29% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to -$159.52 million or 4356.99% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • You can view the full analysis from the report here: TSLA

 

 

 

TWX Chart TWX data by YCharts

17. Time Warner  (TWX)
Industry: Consumer Goods & Services/Movies & Entertainment
Year-to-date return: -15.7%

Credit Suisse Rating/Price Target: Outperform/$100
Credit Suisse Said: We are bullish on Time Warner given (1) as a pure-play content owner, it is structurally well-positioned as consumption of video content migrates online and new opportunities to monetize emerge; (2) the roll-out of HBO NOW should tap new demand for the product and could boost HBO EBITDA by $1.2bn, or nearly 35%, by 2020; (3) Turner screens well on our proprietary genre analysis, and we remain bullish on the company's ability to grow affiliate fees long term; and (4) if we were to strip out HBO at valuations of $30bn-$35bn, the rest of Time Warner is currently trading at significant discounts to Disney and Fox.

In 2015, we expect Time Warner to grow revenues by 3% and EPS by 12%. Over the next three years, we expect the company will grow its top line by 4.6% pa, driven by Turner, but excluding any impact from HBO NOW. We forecast Time Warner will make $6.84 of EPS in 2017, up from $4.15 in 2014, representing 18% CAGR.

Catalysts. We value Time Warner at $100, or 17.9x our 2016 EPS estimate. Our forecasts assume no benefit from the launch of HBO NOW, which could be materially accretive to long-term earnings long term in our view.

TheStreet Said: TheStreet Ratings team rates TIME WARNER as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

We rate TIME WARNER (TWX) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. 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, expanding profit margins and good cash flow from operations. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • TWX's revenue growth has slightly outpaced the industry average of 6.6%. Since the same quarter one year prior, revenues slightly increased by 8.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The debt-to-equity ratio is somewhat low, currently at 0.99, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.21, which illustrates the ability to avoid short-term cash problems.
  • TIME WARNER has improved earnings per share by 23.4% 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, TIME WARNER increased its bottom line by earning $4.39 versus $3.56 in the prior year. This year, the market expects an improvement in earnings ($4.66 versus $4.39).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Media industry average. The net income increased by 14.2% when compared to the same quarter one year prior, going from $850.00 million to $971.00 million.
  • You can view the full analysis from the report here: TWX

 

More from Stocks

NYSE Trader Expects Blowout Earnings From Alphabet, Amazon and Facebook

NYSE Trader Expects Blowout Earnings From Alphabet, Amazon and Facebook

Fornite Funko Pop Toys Will Be Huge: CEO

Fornite Funko Pop Toys Will Be Huge: CEO

How This Former VC Player Became CEO of $2 Billion Cannabis Company Tilray

How This Former VC Player Became CEO of $2 Billion Cannabis Company Tilray

Don't Panic! The Risk of a Recession This Year Is Low

Don't Panic! The Risk of a Recession This Year Is Low

Stocks End Close to Home

Stocks End Close to Home