This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Stock Upgrades, Downgrades From Ratings

Each business day, 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. 7, 2008.

Health Net (HNT), a health care services company, has been upgraded to buy on strong fourth-quarter earnings and a healthy balance sheet.

On Feb. 5, Health Net reported income of $123.4 million, or $1.10 a share, vs. $84.8 million, or 72 cents a share, in 2006. Total revenue increased 11.7% to $3.58 billion year over year.

The company is relatively under-leveraged, with a total debt balance of $545.43 million and a debt-to-equity ratio of 0.29, which is below the industry average. Furthermore, HNT has been generating a healthy cash flow from operations.

Recently, Health Net was awarded a contract by the Department of Veterans Affairs Healthcare Network Upstate New York and also launched an online Behavioral Health Resource Center, which will be managed by one of its subsidiaries. Health Net also plans to expand its Medicare Advantage (MA) service areas in 2008.

Increasing health care costs and increasing competitive pressure remain the major causes of concern. Health Net had been rated hold since Nov. 8.

CNet Networks (CNET - Get Report), an interactive media company, has been upgraded to hold. The company has compelling growth in net income and a solid financial position. However, the stock has not performed well in the past year.

Net income growth for CNet from the same quarter one year ago has significantly exceeded the industry average. Profit skyrocketed 3717.2% year over year, from $5.31 million to $202.62 million. The company has also reported significant earnings per share improvement over the past two years. However, we expect the company to underperform this pattern in the coming year.

The stock has lagged the S&P 500, declining 13.88% over the past year. This price decrease is not necessarily a negative; it could make the stock attractive down the road. Right now, however, we believe that it is too soon to buy. CNet had been rated sell since Apr. 30.

Unidas (CU), a provider of beer and soda to Chile and Argentina, has been downgraded to hold. In spite of good revenue growth, a solid financial position and impressive stock price performance, the company's poor profit margins weigh it down.

The company's year-over-year revenue growth of 25.2% exceeds the industry average. Additionally, EPS has improved in the past year. Unidas' current debt-to-equity ratio, 0.34, is below the industry average, implying successful management of debt levels.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
HNT $67.19 3.67%
IACI $46.34 0.30%
CNET $0.67 0.00%
CU $11.23 0.54%
XL $32.73 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs