TheStreet Ratings released rating changes on 76 U.S. common stocks for week ending December 2, 2011. 53 stocks were upgraded and 23 stocks were downgraded by our stock model.
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Rating Change #10Brookfield Residential Properties Inc (BRP) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its generally weak debt management, disappointing return on equity, weak operating cash flow, generally disappointing historical performance in the stock itself and poor profit margins.Highlights from the ratings report include:
- The debt-to-equity ratio of 1.40 is relatively high when compared with the industry average, suggesting a need for better debt level management.
- 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 Household Durables industry and the overall market, BROOKFIELD RESIDENTIAL PPTYS's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has decreased to -$12.72 million or 47.35% 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 gross profit margin for BROOKFIELD RESIDENTIAL PPTYS is currently lower than what is desirable, coming in at 30.80%. Regardless of BRP's low profit margin, it has managed to increase from the same period last year.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 34.18%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 49.88% 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.
Rating Change #9
International Bancshares Corporation (IBOC) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its expanding profit margins, good cash flow from operations and attractive valuation levels. 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 disappointing return on equity.
Highlights from the ratings report include:
- The gross profit margin for INTL BANCSHARES CORP is currently very high, coming in at 81.40%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, IBOC's net profit margin of 19.80% significantly trails the industry average.
- Net operating cash flow has significantly increased by 69.38% to $63.68 million when compared to the same quarter last year. Despite an increase in cash flow of 69.38%, INTL BANCSHARES CORP is still growing at a significantly lower rate than the industry average of 291.75%.
- 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 Commercial Banks industry. The net income has decreased by 8.7% when compared to the same quarter one year ago, dropping from $33.55 million to $30.63 million.
- 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 Commercial Banks industry and the overall market, INTL BANCSHARES CORP's return on equity is below that of both the industry average and the S&P 500.
Rating Change #8
Helix Energy Solutions Group Inc (HLX) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, expanding profit margins and good cash flow from operations. However, as a counter to these strengths, we find that the company's revenue growth has not been good.
Highlights from the ratings report include:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Energy Equipment & Services industry. The net income increased by 75.9% when compared to the same quarter one year prior, rising from $26.17 million to $46.03 million.
- The gross profit margin for HELIX ENERGY SOLUTIONS GROUP is rather high; currently it is at 54.50%. 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 12.40% trails the industry average.
- Net operating cash flow has slightly increased to $100.56 million or 1.22% when compared to the same quarter last year. Despite an increase in cash flow of 1.22%, HELIX ENERGY SOLUTIONS GROUP is still growing at a significantly lower rate than the industry average of 65.95%.
- The revenue fell significantly faster than the industry average of 39.8%. Since the same quarter one year prior, revenues slightly dropped by 5.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- 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 the other companies in the Energy Equipment & Services industry and the overall market, HELIX ENERGY SOLUTIONS GROUP's return on equity is significantly below that of the industry average and is below that of the S&P 500.
Rating Change #7
Sears Holdings Corporation (SHLD) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, poor profit margins and generally disappointing historical performance in the stock itself.
Highlights from the ratings report include:
- SEARS HOLDINGS CORP has exprienced 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, SEARS HOLDINGS CORP reported lower earnings of $1.24 versus $2.07 in the prior year. For the next year, the market is expecting a contraction of 288.3% in earnings (-$2.34 versus $1.24).
- 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 Multiline Retail industry. The net income has significantly decreased by 93.1% when compared to the same quarter one year ago, falling from -$218.00 million to -$421.00 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 Multiline Retail industry and the overall market, SEARS HOLDINGS CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for SEARS HOLDINGS CORP is currently lower than what is desirable, coming in at 25.60%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -4.40% trails that of the industry average.
- The share price of SEARS HOLDINGS CORP has not done very well: it is down 14.95% 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. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
Rating Change #6
Las Vegas Sands Corp (LVS) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and generally poor debt management.
Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 11.1%. Since the same quarter one year prior, revenues rose by 26.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
- LAS VEGAS SANDS CORP reported significant earnings per share improvement 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. This trend suggests that the performance of the business is improving. During the past fiscal year, LAS VEGAS SANDS CORP turned its bottom line around by earning $0.50 versus -$0.82 in the prior year. This year, the market expects an improvement in earnings ($2.02 versus $0.50).
- 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. Compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market on the basis of return on equity, LAS VEGAS SANDS CORP has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- The debt-to-equity ratio of 1.19 is relatively high when compared with the industry average, suggesting a need for better debt level management. Regardless of the company's weak debt-to-equity ratio, LVS has managed to keep a strong quick ratio of 2.25, which demonstrates the ability to cover short-term cash needs.
- LVS has underperformed the S&P 500 Index, declining 9.99% from its price level of one year ago. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
Rating Change #5
American Eagle Outfitters (AEO) has been upgraded by TheStreet Ratings from hold to buy. 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, attractive valuation levels, compelling growth in net income and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow.
Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 5.5%. Since the same quarter one year prior, revenues rose by 10.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.32 is sturdy.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Specialty Retail industry. The net income increased by 58.8% when compared to the same quarter one year prior, rising from $33.02 million to $52.43 million.
- 37.10% is the gross profit margin for AMERN EAGLE OUTFITTERS INC which we consider to be strong. Regardless of AEO's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, AEO's net profit margin of 6.30% compares favorably to the industry average.
Rating Change #4
Coca-Cola Enterprises Inc (CCE) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, compelling growth in net income, notable return on equity and attractive valuation levels. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.
Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 13.1%. Since the same quarter one year prior, revenues rose by 27.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- COCA-COLA ENTERPRISES INC has improved earnings per share by 44.3% 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, COCA-COLA ENTERPRISES INC increased its bottom line by earning $1.83 versus $1.70 in the prior year. This year, the market expects an improvement in earnings ($2.17 versus $1.83).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Beverages industry average. The net income increased by 36.5% when compared to the same quarter one year prior, rising from $208.00 million to $284.00 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. Compared to other companies in the Beverages industry and the overall market, COCA-COLA ENTERPRISES INC's return on equity exceeds that of both the industry average and the S&P 500.
Rating Change #3
NVIDIA Corporation (NVDA) has been upgraded by TheStreet Ratings from hold to buy. 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, solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. 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 ratings report include:
- NVDA's revenue growth has slightly outpaced the industry average of 19.6%. Since the same quarter one year prior, revenues rose by 26.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- NVDA's debt-to-equity ratio is very low at 0.01 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 3.52, which clearly demonstrates the ability to cover short-term cash needs.
- 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. 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.
- NVIDIA CORP reported significant earnings per share improvement 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, NVIDIA CORP turned its bottom line around by earning $0.42 versus -$0.14 in the prior year. This year, the market expects an improvement in earnings ($1.02 versus $0.42).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income increased by 110.1% when compared to the same quarter one year prior, rising from $84.86 million to $178.27 million.
Rating Change #2
Marathon Oil Corp (MRO) has been upgraded by TheStreet Ratings from hold to buy. 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, attractive valuation levels, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 35.5%. Since the same quarter one year prior, revenues rose by 27.9%. 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.
- The current debt-to-equity ratio, 0.30, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, MRO has a quick ratio of 1.54, which demonstrates the ability of the company to cover short-term liquidity needs.
- Net operating cash flow has increased to $1,080.00 million or 25.43% when compared to the same quarter last year. Despite an increase in cash flow, MARATHON OIL CORP's average is still marginally south of the industry average growth rate of 32.28%.
- MARATHON OIL CORP's earnings per share declined by 13.6% 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, MARATHON OIL CORP increased its bottom line by earning $3.05 versus $1.66 in the prior year. This year, the market expects an improvement in earnings ($3.54 versus $3.05).
Rating Change #1
BP PLC (BP) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, robust revenue growth, solid stock price performance, attractive valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins.
Highlights from the ratings report include:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 174.9% when compared to the same quarter one year prior, rising from $1,785.00 million to $4,907.00 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 35.6%. Since the same quarter one year prior, revenues rose by 35.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. 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 significantly increased by 1157.05% to $6,892.00 million when compared to the same quarter last year. In addition, BP PLC has also vastly surpassed the industry average cash flow growth rate of 32.33%.
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