Stock Upgrades, Downgrades from TheStreet.com Ratings

GSI Group(GSIG Quote) supplies precision technology components, lasers and laser-based manufacturing systems to the electronics, semiconductor, medical and aerospace industries. It has been upgraded to a buy from a hold. The company has no debt to speak of, a relatively favorable sign. GSI's earnings declined by 46.7% in the second quarter over the year-earlier period, and the company has not demonstrated a clear trend in earnings over the past two years.

Nevertheless, its stock price has increased by 12.99% in the last 12 months, and TheStreet.com Ratings believes the stock still has good upside potential. GSI Group had been rated a hold since October 2005.

Through its subsidiaries, M.D.C. Holdings(MDC Quote) builds and finances homes in the U.S. It has been downgraded to a sell from a hold. M.D.C. swung to a loss of $2.32 per share in the second quarter of 2007 from a gain of $1.66 per share a year earlier. Earnings have declined over the past two years, a trend that should continue in the coming year.

The company's stock price is down 19.71% in the last 12 months, and while it's now selling for less than others in its industry in relation to its current earnings, this doesn't justify a buy rating. M.D.C. Holdings had been rated a hold since March 2007.

Schmitt Industries(SMIT Quote) designs, markets and distributes electronics for machine tool products and laser management systems. It has been downgraded to a hold from a buy. Schmitt's performance has been mixed. The company has a debt-to-equity ratio of zero, a relatively favorable sign, and its quick ratio of 7.68 demonstrates the ability to cover short-term cash needs.

However, its revenue fell by 24.9% in the first quarter of its fiscal 2008 compared with the same period last year. Earnings also fell to 7 cents a share in the first quarter compared with 10 cents a share in the same period last year, and its stock price is down by 10.97% in the last 12 months. Schmitt had been rated a buy since September 2005.