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.

The Commerce Group(CGI Quote), an insurance company, has been downgraded to a hold. The company maintains a largely solid financial position with reasonable debt levels by most measures, notable return on equity and a solid stock price performance.

However, the Commerce Group is also dealing with deteriorating net income, poor profit margins and feeble EPS growth. Third-quarter net earnings totaled $55.5 million, or 88 cents a share, compared with net earnings of $56.5 million, or 83 cents a share, a year ago. The most recent quarter includes net realized investment losses of $3.2 million, or 3 cents a share.

Spain's MAPFRE recently agreed to buy the Webster, Mass., insurer for $2.21 billion in cash (1.54 billion euros), or $36.70 a share. The Commerce Group had been rated a buy since November 2005.

Riverbed Technology(RVBD Quote), a data service provider, has been downgraded to a sell. The company's weaknesses can be seen in several areas, such as its generally disappointing historical stock performance and premium valuation.

The company swung to a third-quarter profit of $2.8 million, or 4 cents a share, compared with a net loss of $3.1 million, or 16 cents a share, a year ago. Excluding charges, Riverbed would have earned $12.4 million, or 17 cents a share.

The company recently closed at a price level not very different from a year ago. Looking ahead, other than the push or pull of the broad market, there does not seem to be anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry. Riverbed Technology was initiated with a hold rating in October.