Stock Upgrades, Downgrades From TheStreet.com Ratings

Each business day, 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.

However, the rating does not incorporate all of the factors that can alter a stock's performance. For example, it doesn't always factor in recent corporate or industry events that could affect the stock price, nor does it include recent technology developments and competitive dynamics that may affect the company.

For those reasons, we believe a rating alone cannot tell the whole story, and that it should be part of an investor's overall research.

The following ratings changes are from Feb. 4, 2008.

Chartered Semiconductor (CHRT Quote) has been downgraded to sell. The company displays disappointing stock performance and poor earnings growth.

Shares have dropped 35% over the past year, trailing the S&P 500. The stock's decline could make it attractive down the road. Right now, however, it is too soon to buy.

On Jan. 31, Chartered Semi posted fourth-quarter earnings of $5.9 million, or a penny a share, vs. $4.7 million, or a penny a share, a year ago. Year-to-year profit growth has underperformed the semiconductors sector. Return on equity has improved over the year, but significantly trails the industry average. Chartered Semiconductor had been rated hold since Oct. 29, 2007.

With disappointing return on equity, disappointing share performance and feeble EPS growth, RF Micro Devices (RFMD Quote), a mobile communications company, has been downgraded to sell.

Over the past year, the stock has tumbled by 60%. We feel that the decline in price does not create a buying opportunity.

In addition to soft stock performance, the company's earnings have been weak. On Jan. 31, RF Micro Devices announced a fiscal third-quarter 2008 loss of $15.1 million, or 6 cents a share, down from a profit of $59 million, or 26 cents a share, in 2007. Earnings have been volatile recently, and are likely to decline in the coming year. RF Micro Devices had been rated hold since Nov. 2, 2007.

Hologic (HOLX Quote), a medical-device company, has been downgraded to hold. The company's largely solid financial position and robust revenue growth are positive, but deteriorating net income and disappointing return on equity keep Hologic from a buy rating.

Hologics' debt-to-equity ratio of 0.44 is higher than the industry average, but its quick ratio of 1.91 demonstrates strong liquidity. Despite decent liquidity, a recent earnings report has been followed by a revision in the stock's rating.

On Jan. 31, Hologic reported first-quarter 2008 earnings, announcing a loss of $358.6 million, down from $16 million in 2007. The company expanded its top line 128% over that period, trouncing the industry average of 1%. However, revenue expansion has not shown up in the bottom line; EPS declined to a loss of $3.31 from a gain of 30 cents a year ago. This performance severely trails that of the health supplies sector. Furthermore, return on equity has greatly decreased year over year and trails the industry average, a signal of major weakness within the corporation. Hologic had been rated buy since TheStreet.com Ratings initiated coverage on Feb. 1, 2006.

Verisign (VRSN Quote), an Internet security provider, has been downgraded to hold, thanks in part to slowing growth. Verisign's share price has jumped by 37.93% over the past year, beating the broader market. We do not recommend additional investment in this stock despite these gains.

On Jan. 31, the company reported a loss that widened 131% year to year to $195.7 million. Revenue dropped by 6.3%, significantly underperforming the industry average. Return on equity has greatly decreased over the past year, a signal of major weakness. Verisign had been rated buy since Dec. 7, 2006.

Nymex Holdings (NMX Quote), which runs the New York Mercantile Exchange, has been initiated with a hold rating. The company's strengths include return on equity and robust revenue growth. However, we also find weaknesses such as weak stock performance and premium valuation.

On Feb. 1, Nymex announced a fourth-quarter profit of $64 million, or 67 cents a share, vs. $42.3 million, or 48 cents a share, in 2006. Over the year, the company grew its top line 16% to $189.7 million.

The company has managed debt effectively, sporting a debt-to-equity ratio of 1.00. In addition, the company's quick ratio of 1.41 illustrates the ability to avoid short-term cash problems. However, there is not much to indicate a reverse in this year's share-price decline. Even though the stock is down on the year, it still sells for more than most others in its industry.

Additional ratings changes from Feb. 4 are listed below.

Ticker	Company Name	Change	New Rating	Former Rating
ASX	ADVANCED SEMICON ENGINEERING	Downgrade	Hold	Buy
ANIK	ANIKA THERAPEUTICS INC	Downgrade	Hold	Buy
ACLS	AXCELIS TECHNOLOGIES INC	Downgrade	Sell	Hold
CGL.A	CAGLE'S INC	Downgrade	Sell	Hold
CHRT	CHARTERED SEMICONDUCTOR MFG	Downgrade	Sell	Hold
DCAP	DCAP GROUP INC	Downgrade	Sell	Hold
FISI	FINANCIAL INSTITUTIONS INC	Upgrade	Buy	Hold
FRME	FIRST MERCHANTS CORP	Upgrade	Buy	Hold
HOLX	HOLOGIC INC	Downgrade	Hold	Buy
MC	MATSUSHITA ELECTRIC INDL CO	Upgrade	Buy	Hold
RFMD	RF MICRO DEVICES INC	Downgrade	Sell	Hold
TTEK	TETRA TECH INC	Downgrade	Hold	Buy
VRSN	VERISIGN INC	Downgrade	Hold	Buy
CNAF	COMMERCIAL NATL FINL CP/PA	Upgrade	Buy	Hold
TAYC	TAYLOR CAPITAL GROUP INC	Downgrade	Sell	Hold
TXCO	TXCO RESOURCES INC	Upgrade	Buy	Hold
TRMA	TRICO MARINE SERVICES INC	Downgrade	Hold	Buy
RDS.B	ROYAL DUTCH SHELL PLC	Upgrade	Hold	Sell
STXX	SOUTH TEXAS OIL CO	Downgrade	Sell
CBAK	CHINA BAK BATTERY INC	Downgrade	Sell	Hold
NMX	NYMEX HOLDINGS INC	Downgrade	Hold