TSC Ratings' Upgrades, Downgrades
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 April 25. Allete (ALE), which generates and transmits electrical power, has been upgraded to buy. For the fourth quarter, revenue rose 7.7% year over year to $212.3 million, while earnings per share fell to 77 cents from 82 cents. Net income has decreased by 1.8% to $22.20 million in the same period. The company's debt-to-equity ratio of 0.57 is low, but its quick ratio of 0.80 is somewhat weak and could be cause for future problems. Return on equity has improved slightly from the year-ago quarter to 11.8%. This can be construed as a modest strength in the organization. Allete had been rated hold since Jan. 31.
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