TheStreet Ratings released rating changes on 48 U.S. common stocks for week ending December 16, 2011. 24 stocks were upgraded and 24 stocks were downgraded by our stock model.
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Rating Change #10Bill Barrett Corporation (BBG) has been downgraded by TheStreet Ratings from buy to hold. 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 and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity.Highlights from the ratings report include:
- BBG's revenue growth trails the industry average of 35.7%. Since the same quarter one year prior, revenues rose by 15.5%. 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.
- The debt-to-equity ratio is somewhat low, currently at 0.65, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 1.00 is somewhat weak and could be cause for future problems.
- 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 decreased by 16.0% when compared to the same quarter one year ago, dropping from $24.56 million to $20.64 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. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, BILL BARRETT CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.
Rating Change #9
Sothebys (BID) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, poor profit margins and a generally disappointing performance in the stock itself.
Highlights from the ratings report include:
- Net operating cash flow has increased to -$82.87 million or 10.47% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -3.48%.
- Despite currently having a low debt-to-equity ratio of 0.53, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that BID's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.97 is high and demonstrates strong liquidity.
- 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 Diversified Consumer Services industry. The net income has significantly decreased by 53.5% when compared to the same quarter one year ago, falling from -$19.36 million to -$29.72 million.
- The gross profit margin for SOTHEBY'S is currently extremely low, coming in at 2.40%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -51.10% is significantly below that of the industry average.
Rating Change #8
Wendy's Co (WEN) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, weak operating cash flow and poor profit margins.
Highlights from the ratings report include:
- This stock has managed to rise its share value by 10.44% over the past twelve months.
- Despite its growing revenue, the company underperformed as compared with the industry average of 11.2%. Since the same quarter one year prior, revenues slightly increased by 1.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- WENDY'S CO has shown improvement in its earnings for its most recently reported quarter when compared with the same quarter a year earlier. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. However, the consensus estimates suggest that there will be an upward trend in the coming year. During the past fiscal year, WENDY'S CO reported lower earnings of $0.00 versus $0.01 in the prior year. This year, the market expects an increase in earnings to $0.15 from $0.00.
- Net operating cash flow has decreased to $49.50 million or 24.03% 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 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 Hotels, Restaurants & Leisure industry. The net income has significantly decreased by 336.3% when compared to the same quarter one year ago, falling from -$0.91 million to -$3.97 million.
Rating Change #7
Ingram Micro Inc (IM) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.
Highlights from the ratings report include:
- The revenue growth significantly trails the industry average of 45.5%. Since the same quarter one year prior, revenues slightly increased by 5.3%. 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.
- IM's debt-to-equity ratio is very low at 0.13 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.95 is somewhat weak and could be cause for future problems.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Electronic Equipment, Instruments & Components industry. The net income has significantly decreased by 64.1% when compared to the same quarter one year ago, falling from $64.99 million to $23.33 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 Electronic Equipment, Instruments & Components industry and the overall market, INGRAM MICRO INC's return on equity is below that of both the industry average and the S&P 500.
Rating Change #6
New York Community Bancorp (NYB) has been downgraded by TheStreet Ratings from buy to hold. Among the primary strengths of the company is its expanding profit margins over time. At the same time, however, we also find weaknesses including weak operating cash flow, a generally disappointing performance in the stock itself and deteriorating net income.
Highlights from the ratings report include:
- The gross profit margin for NEW YORK CMNTY BANCORP INC is rather high; currently it is at 64.40%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 23.00% is above that of the industry average.
- Despite the weak revenue results, NYB has outperformed against the industry average of 20.5%. Since the same quarter one year prior, revenues slightly dropped by 9.1%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- NEW YORK CMNTY BANCORP INC's earnings per share declined by 12.9% in the most recent quarter compared to 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, NEW YORK CMNTY BANCORP INC increased its bottom line by earning $1.25 versus $1.11 in the prior year. For the next year, the market is expecting a contraction of 12.0% in earnings ($1.10 versus $1.25).
- Looking at the price performance of NYB's shares over the past 12 months, there is not much good news to report: the stock is down 32.70%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than 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.
- Net operating cash flow has significantly decreased to -$320.99 million or 163.27% 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.
Rating Change #5
Forestar Group Inc (FOR) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and poor 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 Real Estate Management & Development industry. The net income increased by 308.3% when compared to the same quarter one year prior, rising from $8.92 million to $36.43 million.
- FOR's revenue growth trails the industry average of 26.6%. Since the same quarter one year prior, revenues slightly increased by 9.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- FORESTAR GROUP INC reported significant earnings per share improvement 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, FORESTAR GROUP INC reported lower earnings of $0.15 versus $1.64 in the prior year. This year, the market expects an improvement in earnings ($0.78 versus $0.15).
- The gross profit margin for FORESTAR GROUP INC is currently extremely low, coming in at 12.50%. It has decreased significantly from the same period last year. Despite the weak results of the gross profit margin, the net profit margin of 138.80% has significantly outperformed against the industry average.
- FOR has underperformed the S&P 500 Index, declining 18.92% 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 #4
Charming Shoppes Inc (CHRS) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we find that the company has not been very careful in the management of its balance sheet.
Highlights from the ratings report include:
- Powered by its strong earnings growth of 31.25% and other important driving factors, this stock has surged by 29.31% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- CHARMING SHOPPES INC has improved earnings per share by 31.3% 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. This trend suggests that the performance of the business is improving. During the past fiscal year, CHARMING SHOPPES INC continued to lose money by earning -$0.46 versus -$0.68 in the prior year. This year, the market expects an improvement in earnings ($0.06 versus -$0.46).
- The gross profit margin for CHARMING SHOPPES INC is rather high; currently it is at 54.20%. 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 -3.00% trails the industry average.
- 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 Specialty Retail industry and the overall market, CHARMING SHOPPES INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Despite currently having a low debt-to-equity ratio of 0.33, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that CHRS's debt-to-equity ratio is mixed in its results, the company's quick ratio of 0.51 is low and demonstrates weak liquidity.
Rating Change #3
Blue Coat Systems Inc (BCSI) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
Highlights from the ratings report include:
- BCSI's debt-to-equity ratio is very low at 0.17 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 2.63, which clearly demonstrates the ability to cover short-term cash needs.
- The gross profit margin for BLUE COAT SYSTEMS INC is currently very high, coming in at 80.60%. Regardless of BCSI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, BCSI's net profit margin of 4.00% is significantly lower than the same period one year prior.
- BCSI, with its decline in revenue, underperformed when compared the industry average of 6.5%. Since the same quarter one year prior, revenues slightly dropped by 5.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- BLUE COAT SYSTEMS INC 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. 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, BLUE COAT SYSTEMS INC increased its bottom line by earning $0.97 versus $0.92 in the prior year. For the next year, the market is expecting a contraction of 12.4% in earnings ($0.85 versus $0.97).
- 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 Communications Equipment industry. The net income has significantly decreased by 61.9% when compared to the same quarter one year ago, falling from $12.03 million to $4.59 million.
Rating Change #2
Copano Energy LLC (CPNO) 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, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 35.7%. Since the same quarter one year prior, revenues rose by 48.8%. 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 significantly increased by 60.90% to $46.78 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 32.53%.
- COPANO ENERGY LLC's earnings have gone downhill when comparing its most recently reported quarter with the same quarter a year earlier. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, COPANO ENERGY LLC swung to a loss, reporting -$0.36 versus $0.35 in the prior year. This year, the market expects an improvement in earnings ($0.01 versus -$0.36).
- CPNO's debt-to-equity ratio of 1.00 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. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.80 is weak.
- This stock has managed to decline in share value by 4.31% over the past twelve months. 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.
Rating Change #1
Sirius XM Radio Inc (SIRI) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, revenue growth, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had generally poor debt management on most measures that we evaluated.
Highlights from the ratings report include:
- SIRIUS XM RADIO INC 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, SIRIUS XM RADIO INC turned its bottom line around by earning $0.00 versus -$0.15 in the prior year. This year, the market expects an increase in earnings to $0.07 from $0.00.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Media industry. The net income increased by 54.0% when compared to the same quarter one year prior, rising from $67.63 million to $104.18 million.
- SIRI's revenue growth trails the industry average of 19.8%. Since the same quarter one year prior, revenues slightly increased by 6.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The gross profit margin for SIRIUS XM RADIO INC is rather high; currently it is at 63.60%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 13.70% is above that of the industry average.
- Powered by its strong earnings growth of 100.00% and other important driving factors, this stock has surged by 30.43% 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.
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