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 were generated on Feb. 6.

Hewitt Associates (HEW Quote), a human resource benefits, outsourcing, and consulting company, has been upgraded to buy. It shows good revenue growth, a solid financial position, strong stock price performance and a net income increase. These positives outweigh disappointing return on equity.

On Feb. 5, Hewitt announced first-quarter earnings of $64 million, or 59 cents a share, up from $30 million, or 27 cents a share, a year ago.

Its current debt-to-equity ratio, at 0.31, is below the industry average, implying successful debt management. Its quick ratio of 1.28 illustrates the ability to avoid short-term cash problems. The stock has surged by 35.44% over the past year, outperforming the S&P 500, and should continue to move higher despite its nice gain.

This company has reported somewhat volatile earnings recently, but it appears poised for EPS growth in the coming year. Hewitt had been rated hold since Nov. 14.

Dover Downs (DDE Quote), a gaming and entertainment company, has been downgraded to hold. Year-over-year revenue growth has lagged the industry average. In the fourth quarter of 2007, the company's earnings per share declined by 10.5% year over year to 17 cents. However, we feel the stock is poised for EPS growth in the coming year.

The company's debt-to-equity ratio of 1.03 is higher than the industry average, suggesting it could manage debt better. Dover Downs sports a quick ratio of 1.06, demonstrating the ability to handle short-term liquidity needs.

At 23.70%, the company's gross profit margin is rather low and has decreased year over year. Its net profit margin of 9% trails the industry average. Dover Downs had been rated buy since TheStreet.com Ratings initiated coverage on Feb. 3, 2006.

Royal Caribbean Cruises (RCL Quote) has been downgraded to hold. The cruise-ship operator demonstrates robust revenue growth, an increase in net income and a reasonable valuation level. However, Royal Caribbean exhibits disappointing return on equity, poor profit margins and lackluster stock performance.

Royal Carribean's year-over-year revenue rose by 29.3%, outpacing the industry average. For the fourth quarter of 2007, the company reported net income of $70.8 million, or 33 cents a share, vs. $46.6 million, or 22 cents a share, in 2006.

Return on equity lags the industry average, implying minor weakness in the organization. Royal Caribbean's gross profit margin, at 31.20%, is lower than desirable and has decreased year over year. In addition, the company's net profit margin of 4.80% significantly trails that of its peers. Royal Caribbean had been rated buy since Nov. 6.

Eagle Rock Energy Partners (EROC Quote), a natural gas company, has been downgraded to sell. The company shows deteriorating net income and poor profit margins.

On the basis of year-over-year change in net income, Eagle Rock has underperformed its peers. Net income has decreased by 27.2% from the year-ago quarter, falling to $9.37 million from $12.87 million. At 20%, the company's gross profit margin is low and has decreased since last year. Furthermore, its net profit margin of 3.40% trails the industry average.

Earnings per share have fallen off in the most recent quarter compared with last year. Eagle Rock's share price is down 11.26% in the past year. Eagle Rock had been rated hold since TheStreet.com Ratings initiated coverage on Nov. 27.

Spirit AeroSystems (SPR Quote), a maker of aircraft structures, has been downgraded to sell on its disappointing stock performance and poor profit margins.

Spirit shares have fallen 10.24% in the past year, in spite of year-over-year EPS growth. We do not see anything that indicates a reversal in this decline; the stock still sells for more than most others in its industry.

Spirit's growth profit margin is rather low at 19.30% and has decreased from the same quarter the previous year. Nevertheless, the company's net profit margin of 8.60% is above that of the industry average. Spirit AeroSystem had been rated hold since TheStreet.com Ratings initiated coverage on Dec. 24.

Additional ratings changes are listed below.

Ticker	Company Name	Change	New Rating	Former Rating
CYMI	CYMER INC	Downgrade	Hold	Buy
DW	DREW INDUSTRIES INC	Downgrade	Hold	Buy
FSRV	FIRSTSERVICE CORP -SVTG	Downgrade	Hold	Buy
MOD	MODINE MANUFACTURING CO	Downgrade	Sell	Hold
NLCI	NOBEL LEARNING CMNTYS INC	Downgrade	Hold	Buy
RENT	RENTRAK CORP	Downgrade	Hold	Buy
RMCF	ROCKY MOUNTAIN CHOC FACT INC	Downgrade	Hold	Buy
RCL	ROYAL CARIBBEAN CRUISES LTD	Downgrade	Hold	Buy
STNR	STEINER LEISURE LTD	Downgrade	Hold	Buy
WPP	WAUSAU PAPER CORP	Downgrade	Sell	Hold
DDE	DOVER DOWNS GAMING & ENTMT	Downgrade	Hold	Buy
HEW	HEWITT ASSOCIATES INC	Upgrade	Buy	Hold
SOMH	SOMERSET HILLS BANCORP	Downgrade	Hold	Buy
ABBC	ABINGTON BANCORP INC	Upgrade	Buy	Hold
GHDX	GENOMIC HEALTH INC	Upgrade	Hold	Sell
EROC	EAGLE ROCK ENERGY PARTNRS LP	Downgrade	Sell	Hold
SPR	SPIRIT AEROSYSTEMS HOLDINGS	Downgrade	Sell	Hold