TSC Ratings' Updates: Beckman Coulter

• ByTSC Ratings,
• On 4:45 pm EDT, Monday June 1, 2009

TSC Ratings provides exclusive stock, ETF and mutual fund ratings and commentary based on award-winning, proprietary tools. Its "safety first" approach to investing aims to reduce risk while seeking solid outperformance on a total return basis.

The following ratings changes were generated on Monday, June 1.

We've upgraded Beckman Coulter from hold to buy, driven by its good cash flow from operations, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Net operating cash flow increased by 71.6% to $105.7 million compared with the year-ago quarter, and gross profit margin increased to 55.9%. Net profit margin, however, of 3% trails the industry average. Earnings per share declined by 49.2% in the most-recent quarter compared with the year-ago quarter, though we anticipate the company's yearlong pattern of declining EPS to reverse in the coming year. Revenue dropped by 5.3% compared with the same quarter last year. The debt-to-equity ratio of 0.6, though low, is above the industry average, and the quick ratio of 1.3 is sturdy.

We've upgraded BOK Financial from hold to buy, driven by its expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

BOK's gross profit margin of 69.7% has increased from the same quarter last year. Revenue fell 9.7%, and EPS declined by 11.9%, though we anticipate the company's yearlong trend of declining EPS to reverse over the coming year. Net income fell 11.6% compared with the year-ago quarter, from $62.3 million to %55 million. Return on equity decreased from the year-go quarter, implying a minor weakness in the organization.

We've upgraded Henry Schein from hold to buy, driven by its growth in earnings per share, increase in net income, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

EPS improved by 8.9% compared with the year-ago quarter, and we feel that the company's two-year trend of EPS growth should continue. Net income rose by 6.6%, from $51.44 million in the year-ago quarter to $54.9 million. The debt-to-equity ratio of 0.2 is below the industry average. The quick ratio or 1, however, is somewhat weak. ROE improved slightly compared with the same quarter last year. Revenue fell by 2.2%.

We've upgraded Universal from hold to buy, driven by its robust revenue growth, impressive record of earnings per share growth, increase in net income, attractive valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins.

Revenue rose by 20.6% since the same quarter a year ago, and EPS improved significantly. We feel that the company's yearlong trend of positive EPS growth should continue. Net income grew by 59.2% since the year-ago quarter, from $9.9 million to $15.8 million. Net operating cash flow significantly increased by 194.1% to $105.9 million.

We've upgraded Weis Markets from hold to buy, driven by its revenue growth, attractive valuation levels, good cash flow from operations, compelling growth in net income and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows low profit margins.

Revenue increased by 1.8% since the year-ago quarter, and EPS also rose. Net income increased by 82.4%, from $9.1 million to $16.5 million. Net operating cash flow increased by 14.6% to $54.9 million. Weis has no debt to speak of, though its quick ratio is 0.9.

Other ratings changes include Boston Scientific, upgraded from sell to hold, and Winn-Dixie, also upgraded from sell to hold.

All ratings changes from June 1 are listed below.

Ticker Company Current Change Previous ASR Grupo Areoportuario Sureste BUY Upgrade HOLD BEC Beckman Coulter BUY Upgrade HOLD BOKF BOK Finanical BUY Upgrade HOLD BSX Boston Scientific HOLD Upgrade SELL HSIC Henry Schein BUY Upgrade HOLD LBAI Lakeland Bancorp BUY Upgrade HOLD NFBK Northfield Bancorp HOLD Initiated NFBK Northfield Bancorp HOLD Initiated NX Quantex Building Products HOLD Initiated PRO Pros Holdings HOLD Upgrade SELL SMLC 012 Smile.Communications HOLD Upgrade SELL TOBC Tower Bancorp SELL Downgrade HOLD UTA Universal Travel Group SELL Initiated UVV Universal BUY Upgrade HOLD WCRX Warner Chilcott HOLD Upgrade SELL WFT Weatherford International HOLD Upgrade SELL WINN Winn-Dixie Stores HOLD Upgrade SELL WMK Weis Markets BUY Upgrade HOLD

Note: Our quantitative model makes stock recommendations based on GAAP figures that may differ materially from data as reported by the companies themselves. As a result, rating changes are occasionally driven by so-called nonrecurring items. As always, we urge readers to use TSC Ratings' reports in conjunction with additional information to construct their opinions on the value that should be placed on any given stock.

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