TheStreet.com Ratings: Stock Upgrades, Downgrades

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

While our 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 forecasted company earnings. Objective elements include volatility of past operating revenue, financial strength and company cash flows.

Some recent rating changes are highlighted below.

Texas-based savings and loan Franklin Bancorp(FBTX Quote) has been downgraded to hold from buy. The company's revenue has grown at a slightly slower rate than the industry average over the past fiscal year and does not seem to have trickled down to the bottom line. Franklin's earnings per share have actually trended downward over the past two years. FBTX had been rated buy since January.

United Surgical Partners(USPI Quote) has been upgraded to buy from hold. The company owns and operates surgical centers and hospitals in the U.S. and U.K. USPI's revenues jumped 32.8% in the fourth quarter of fiscal 2006 compared with the same quarter a year ago, nearly double the industry average. TheStreet.com Ratings feels the company is poised for EPS growth in the coming year. United Surgical Partners had been rated hold since August 2006.

Media conglomerate CBS(CBS.A Quote) has been downgraded to sell from hold. The company's net operating cash flow fell 75.1% in the fourth quarter of fiscal 2006, compared with the same quarter a year earlier. TheStreet.com Ratings expects EPS growth to slow at CBS during the coming year. The company had been rated a hold since December 2006.

Homebuilder Meritage(MTH Quote) has been downgraded to hold from buy. Revenue fell 21.1% in the fourth quarter of fiscal 2006 compared with the same quarter a year ago. Revenue throughout the industry declined by just 15.6% during the same time. TheStreet.com Ratings considers Meritage's profit margins to be extremely low. The company had been rated buy since December 2006.

Electronics manufacturer Benchmark(BHE Quote) has been downgraded to hold from buy. The company's gross profit margins fell to 6.7% in the fourth quarter of fiscal 2006 compared to the same quarter a year ago. Although Benchmark's stock trades at a discount to its peers in the electrical equipment industry, TheStreet.com Ratings does not feel that justifies a purchase at this time. The company had been rated buy since March 2005.

Additional ratings changes are listed in the table below.

TheStreet.com Ratings Stock Upgrades, Downgrades
Company Name	Ticker	Change	New Rating	Former Rating
CRM Holdings	CRMH	Upgrade	Hold	Sell
Rosetta Resources	ROSE	Initiation	Sell
Franklin Bancorp	FBTX	Downgrade	Hold	Buy
United Surgical	USPI	Upgrade	Buy	Hold
CBS	CBS	Downgrade	Sell	Hold
Touchstone Applied Science	TASAE	Downgrade	Sell	Hold
State Bancorp/NY	STBC	Upgrade	Buy	Hold
Radiant Systems	RADS	Upgrade	Buy	Hold
Meritage Homes	MTH	Downgrade	Hold	Buy
D & E Communications	DECC	Upgrade	Buy	Hold
Benchmark Electronics	BHE	Downgrade	Hold	Buy
Brooks Automation	BRKS	Upgrade	Buy	Hold
Source: TheStreet.com Ratings