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.

Charming Shoppes(CHRS Quote), a specialty apparel retailer, has been downgraded to a sell. The company's weaknesses can be seen in several areas, such as its deteriorating net income, disappointing return on equity, poor profit margins, weak operating cash flow and a substandard stock performance.

Second-quarter profit dropped 44% to $18.28 million, while revenue inched up 1% to $770.9 million. The company also lowered its guidance for the third quarter and fiscal year. Net operating cash flow has decreased to $103.35 million or 11.39% from a year ago and Charming Shoppes' stock has tumbled about 53% over the last year. Charming Shoppes had been rated a hold since August 2006.

BRE Properties(BRE Quote), a real estate investment trust, has been downgraded to a hold. While the company has seen expanding profit margins with revenue growth and increased net income, it has also been marked by a disappointing stock performance, poor debt management and an unsatisfactory return on equity.

Third-quarter net income available to common shareholders totaled $51.4 million, or 99 cents a share, up from $11.5 million, or 22 cents a share, a year ago. This company has reported somewhat volatile earnings recently, although it seems poised for EPS growth in the coming year. Funds from operations totaled $32.4 million, or 62 cents a share, up from $30.6 million, or 58 cents a share, a year ago. Total revenues from continuing operations for the quarter climbed 8% to $87.8 million. BRE Properties had been rated a buy since August 2006.

HCP(HCP Quote), another real estate investment trust, has been downgraded to a hold. Although the company has enjoyed good cash flow from operations and robust revenue and net income growth, it has also struggled with poor debt management and disappointing return on equity.

Third-quarter net income increased 319.4% from a year ago to $322.15 million, while funds from operations totaled $111.6 million, or 52 cents a share, up from $72 million, or 50 cents a share, a year ago. Revenue increased 136.2% to $284.2 million. (These figures include $1.24 million in revenue related to equity income from unconsolidated joint ventures.)

The company said it expects full-year funds from operations to be within the range of Wall Street's expectations. HCP's gross profit margin is rather high at 53%, although it is down from the same period last year. Health Care Property Investors had been rated a buy since October.

Cruise operator Royal Caribbean Cruises(RCL Quote) has been upgraded to a buy. The company's strengths can be seen in several areas, such as its revenue growth, attractive valuation levels, increase in net income, good cash flow from operations and expanding profit margins. These factors should outweigh the company's somewhat disappointing return on equity.

Third-quarter profit climbed 14% from a year ago to $395 million, or $1.84 a share. Revenue totaled $2 billion, up from $1.6 billion a year ago. Net operating cash flow increased 50.2% to $336.91 million. While the company's profit margin is high, it decreased from the same period last year. Royal Caribbean Cruises had been rated a hold since May.

Bally Technologies(BYI Quote), a casino gaming machine maker, has been upgraded to a buy. The company boasts a solid stock price performance and expanding profit margins, along with growth in revenue, EPS and net income. These strengths should outweigh the company's generally poor debt management.

The company swung to a fiscal fourth-quarter profit, pulling in $18.5 million, or 33 cents a share, compared with a loss of $12 million, or 23 cents a share, a year ago. Revenue increased 31% to $202.4 million. This stock has surged 102.3% over the past year, and it should continue to move higher. Bally Technologies had been rated a hold since April 2006.

Additional ratings changes are listed below.

Stock Upgrades, Downgrades
Ticker	Company Name	Change	New Rating	Former Rating
SRCE	1st Source	Downgrade	Hold	Buy
TCHC	21st Century Holding	Upgrade	Buy	Hold
ABCB	Ameris Bancorp	Downgrade	Hold	Buy
ACSEF	ACS Motion Control	Downgrade	Sell	Hold
ALDN	Aladdin Knowledge Systems	Downgrade	Hold	Buy
BYI	Bally Technologies	Upgrade	Buy	Hold
VOXX	Audiovox	Upgrade	Hold	Sell
BRE	BRE Properties	Downgrade	Hold	Buy
BRKS	Brooks Automation	Downgrade	Hold	Buy
CGL.A	Cagles	Downgrade	Hold	Buy
CPKI	California Pizza Kitchen	Downgrade	Hold	Buy
CHRS	Charming Shoppes	Downgrade	Sell	Hold
DEPO	Depomed	Upgrade	Hold	Sell
DRAX	Draxis Health	Downgrade	Hold	Buy
EDGW	Edgewater Technology	Downgrade	Hold	Buy
VIFL	Food Technology	Upgrade	Buy	Hold
FBN	Furniture Brands	Downgrade	Sell	Hold
HCP	HCP	Downgrade	Hold	Buy
IBAS	iBasis	Downgrade	Sell	Hold
IRIS	Iris International	Downgrade	Hold	Buy
IFC	Irwin Financial	Downgrade	Sell	Hold
KEI	Keithley Instruments	Downgrade	Sell	Hold
LOW	Lowe's Companies	Downgrade	Hold	Buy
MAGS	Magal Security Systems	Downgrade	Sell	Hold
MPET	Magellan Petroleum	Downgrade	Sell	Hold
NEM	Newmont Mining	Upgrade	Buy	Hold
NVTL	Novatel Wireless	Upgrade	Buy	Hold
OLN	Olin	Downgrade	Hold	Buy
PHII	PHI	Upgrade	Buy	Hold
NSUR	Insure.com	Upgrade	Hold	Sell
RDN	Radian Group	Downgrade	Sell	Hold
RAS	RAIT Financial	Downgrade	Sell	Hold
RMD	Resmed	Downgrade	Hold	Buy
RIV	Riviera Holdings	Downgrade	Sell	Hold
ROG	Rogers	Upgrade	Buy	Hold
RCL	Royal Caribbean Cruises	Upgrade	Buy	Hold
SMTC	Semtech	Downgrade	Hold	Buy
PDGI	Pharmanet Development Group	Upgrade	Buy	Hold
TK	Teekay Group	Downgrade	Hold	Buy
TTI	Tetra Technologies	Downgrade	Hold	Buy
TWI	Titan International	Downgrade	Hold	Buy
TG	Tredegar	Downgrade	Hold	Buy
GTI	Graftech International	Upgrade	Buy	Hold
UTEK	Ultratech	Downgrade	Sell	Hold
VVC	Vectren	Upgrade	Buy	Hold
ZION	Zions Bancorp	Downgrade	Hold	Buy
ZRAN	Zoran	Upgrade	Buy	Hold
DLA	Delta Apparel	Downgrade	Hold	Buy
MOSY	Mosys	Downgrade	Sell	Hold
WCG	Wellcare Healthplans	Downgrade	Hold	Buy
FCLF	First Clover Leaf	Downgrade	Hold	Buy
MSSR	McCormick & Shmicks	Downgrade	Hold	Buy
ATB	Arlington Tankers	Upgrade	Buy	Hold
FRP	Fairpoint Communications	Downgrade	Hold	Buy
FTD	FTD Group	Downgrade	Hold	Buy
WXS	Wright Express	Downgrade	Hold	Buy
KRNY	Kearny Financial	Downgrade	Sell	Hold
PSBC	Pacific State Bancorp	Downgrade	Hold	Buy
FRZ	Reddy Ice Holdings	Downgrade	Hold	Buy
TRAK	Dealertrack Holdings	Downgrade	Sell	Hold
FBIZ	First Business Financial	Downgrade	Sell	Hold
DCP	Dyncorp International	Upgrade	Hold	Sell
CLMT	Calumet Specialty Products	Downgrade	Sell	Hold
OIIM	02Micro International	Upgrade	Buy	Hold
Source: TheStreet.com Ratings