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.

Cogent(COGT Quote), which makes automated fingerprint identification systems, has been upgraded to hold in the light of the company's strong financial performance. Cogent recently said second-quarter earnings almost tripled to $10.6 million, or 11 cents a share, while revenue totaled $31.3 million, up from $13.2 million a year ago. Management expects $120 million in revenue and 39 cents to 44 cents a share in 2007, for year-over-year increases of 18% and 25.8% to 41.9%, respectively.

Also, a new alliance with Northrop(NOC Quote) and a client relationship with Upek following two lawsuits could further strengthen the company's growth prospects. However, rising competition and customer concentration could pose significant challenges in the future. Cogent had been initiated with a sell rating in October 2005.

Pool(POOL Quote), a wholesale distributor of swimming pool supplies, equipment, and related leisure products, has been downgraded to hold. While the company has experienced revenue growth and notable return on equity, it has also seen deteriorating net income, generally poor debt management and disappointing stock performance.

Pool reported flat earnings per share in the most recent quarter and profit fell 7% from a year ago to $57.8 million. Revenue totaled $726.5 million, up from $705.7 million a year ago, but missed Wall Street's expectations.

The company also recently slashed its full-year outlook, and is now forecasting earnings of $1.45 to $1.55 a share, compared with its earlier guidance of $1.75 to $1.85 a share. The company blamed the weak housing market for slower swimming pool construction. Pool had been rated buy since May.