Stock Upgrades, Downgrades From TheStreet.com Ratings

Clothing retailer The Men's Wearhouse(MW Quote) has been downgraded to hold. While the company has seen growth in revenue, EPS and net income, the stock has had a generally disappointing performance in the past year.

Third-quarter revenue increased 19.1% to $512.1 million, compared with the industry average of 6.6%. Net income totaled $37.1 million, or 69 cents a share, up from $31.8 million, or 58 cents a share, a year ago. Men's Wearhouse has demonstrated a pattern of positive EPS growth over the past two years and this trend is expected to continue.

However, the company's share price has done very poorly compared to where it was a year ago, falling 33.42%. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Men's Wearhouse had been rated buy since January 2006.

Zumiez(ZUMZ Quote), an outdoor apparel maker, has been downgraded to sell. The company's weaknesses can be seen in several areas, including its generally disappointing historical performance of the stock itself, unsatisfactory return on equity and weak operating cash flow. Zumiez's share price has slipped 34.69% from a year ago.

Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Although its share price is down sharply from a year ago, investors should not assume that it can now be tagged as cheap and attractive.

The reality is that, based on its current price in relation to its earnings, Zumiez is still more expensive than most of the other companies in its industry. The company's current return on equity has slightly decreased from a year ago and ROE is below the industry average. The company had been rated hold since February.