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.
Diversified industrial corporation General Electric (GE - Get Report) has been downgraded to a hold from a buy. The company shows mixed results, some strengths and some weaknesses, with little evidence to justify the expectation of either a positive or negative performance for the stock relative to others covered by TheStreet.com Ratings. Its strengths include revenue growth of 10.2% in the second quarter of 2007 compared with the same period last year, and EPS growth of 13.04% over the same timeframe. This growth has contributed to a 12.14% rise in GE's stock price over the past 12 months. As a counter to its strengths, the company has not been very careful in the management of its balance sheet. GE had been rated a buy since May 2007.