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.

Nomura Holdings(NMR Quote), Japan's largest brokerage, has been upgraded to hold. The company revenue growth has been robust, its profit margins are expanding and it has good cash flow from operations. However, debt management is poor and return on equity and the stock's performance have been disappointing.

In July, Nomura said net earnings for the April-June quarter more than tripled. Revenue increased 85% to 380.7 billion yen or $3.15 billion. However, the company has not demonstrated a clear trend in earnings over the past two years, making it difficult to accurately predict earnings for the coming year. Nomura said it said it may leave the residential mortgage-backed securities market in the U.S. after taking losses. The company had been rated sell since July.

Insurance companyOld Republic International(ORI Quote) has been downgraded to hold. While the company enjoys a largely solid financial position with reasonable debt levels, revenue growth, and good cash flow from operations, EPS growth has been feeble, net income has deteriorated and return on equity has been disappointing. Old Republic said recently that second-quarter profit slipped 9% from a year ago to $115.1 million, or 49 cents a share.

The company said greater year-over-year claims in its mortgage guaranty line and an increased operating expense ratio in the title insurance business were major offsetting factors. Despite its growing revenue, the company underperformed compared with the industry average. Old Republic International had been rated buy since September 2005.