Stock Upgrades, Downgrades From TheStreet.com Ratings

Each weekday, TheStreet.com Ratings updates its ratings on the stocks it covers. The proprietary ratings model projects a stock's total return potential over a 12-month period, including both price appreciation and dividends. Buy, hold or sell ratings designate how the Ratings group expects these stocks to perform against a general benchmark of the equities market and interest rates.

While the ratings model is quantitative, it uses both subjective and objective elements. For instance, subjective elements include expected equities market returns, future interest rates, implied industry outlook and company earnings forecasts. Objective elements include volatility of past operating revenue, financial strength and company cash flows.

Data broker ChoicePoint(CPS Quote) has been upgraded to a buy from a hold. The company's earnings per share jumped 20% in the first quarter of fiscal 2007 compared with the year-earlier period. TheStreet.com Ratings is expecting more EPS growth in the coming year. The gross profit margin for ChoicePoint is rather high at 52.3%, and the net profit margin of 11.6% compares favorably with the industry average. CPS had been rated a hold since August 2006.

Musical instrument retailer Guitar Center(GTRC Quote) has also been boosted to a buy from a hold. Revenues shot up 13.5% in the most recent quarter compared with the first quarter of 2006, outpacing the industry average of 4.6% during the same time period. The revenue growth seems to have trickled down to the bottom line, resulting in modest earnings gains during the past fiscal year. TheStreet.com Ratings expects bigger EPS increases in the coming quarters. Guitar Center had been rated a hold since February 2007.

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