TSC Ratings' Upgrades, Downgrades

NBT Bancorp NBTB, the holding company for NBT Bank, has been upgraded to buy. For the first quarter, revenue increased 2.9% year over year to $90.8 million, and earnings per share improved to 43 cents from 41 cents. For 2008, the market expects an improvement in full-year EPS to $1.72 from $1.51 in 2007. Gross profit margin is rather high at 59%. In addition, net profit margin of 15% exceeds the industry average.

Share price is largely unchanged from where it was a year ago. With a price-to-earnings ratio of 14.88, the stock is more expensive than others in its industry. We feel, however, that other strengths justify the premium. NBT Bancorp had been rated hold since Jan. 18.

Coach COH, which sells accessories and gifts for men and women, has been upgraded to hold. Strengths such as robust revenue growth, a solid financial position and notable return on equity are balanced by a disappointing stock-price performance. For the third quarter of its fiscal 2008, revenue rose 19% year over year to $744.5 million, and earnings per share improved to 46 cents from 39 cents. The company's debt-to-equity ratio is very low at 0.01, implying very successful management of debt. Its quick ratio of 2.10 demonstrates strong liquidity. Gross profit margin is very high at 75%, and net profit margin of 22% significantly outperformed against the industry.

Shares have fallen 30% in the past year. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Turning toward the future, the stock's decline could make it attractive down the road. Right now, however, we believe that it is too soon to buy. Coach had been rated sell since Feb. 8.

Netgear NTGR, which designs, manages and markets networking products for home users and small businesses, has been downgraded to hold. Strengths such as revenue growth, a solid financial position and an attractive valuation are countered by deteriorating net income, disappointing return on equity and poor profit margins. For the fourth quarter, revenue rose 14% year over year to $198.2 million, while earnings per share declined to 31 cents from 40 cents.

For 2008, the market expects an improvement in full-year EPS to $1.63 from $1.29 in 2007. Netgear has no debt to speak of, resulting in a debt-to-equity ratio of zero. It also has a quick ratio of 2.19, which demonstrates an ability to cover short-term liquidity needs. With a price-to-earnings ratio of 13.53, the company trades at a discount to its sector peers. Netgear had been rated buy since Aug. 24, 2006.

Under Armour UA, which markets performance apparel, footwear and accessories, has been downgraded to sell. For the first quarter, net income decreased 71% year over year to $2.9 million. Return on equity has slightly decreased from the same quarter one year ago to 16%. This implies a minor weakness in the organization.

At 48%, the gross profit margin is strong. The net profit margin of 1.80% trails the industry average. Shares have tumbled 30% in the past year. Despite the decline, the company trades at a premium to its sector peers, with a price-to-earnings ratio of 38.04. Under Armour had been rated hold since Nov. 29.

Additional ratings changes from April 30 are listed below.

Levels to Watch
Ticker	Company Name	Change	New Rating	Former Rating
COH	COACH INC	Upgrade	Hold	Sell
CTV	COMMSCOPE INC	Downgrade	Hold	Buy
GNCMB	GENERAL COMMUNICATION	Upgrade	Hold	Sell
JOB	GENERAL EMPLOY ENTERPRISES	Downgrade	Sell	Hold
MSCC	MICROSEMI CORP	Upgrade	Buy	Hold
NBTB	N B T BANCORP INC	Upgrade	Buy	Hold
NWSB	NORTHWEST BANCORP INC	Downgrade	Hold	Buy
OSG	OVERSEAS SHIPHOLDING GROUP	Upgrade	Buy	Hold
PACR	PACER INTERNATIONAL INC	Upgrade	Buy	Hold
MO	ALTRIA GROUP INC	Downgrade	Sell	Hold
SHS	SAUER-DANFOSS INC	Upgrade	Buy	Hold
XLNX	XILINX INC	Upgrade	Buy	Hold
SBKC	SECURITY BANK CORP	Downgrade	Sell	Hold
OPCO	OURPETS CO	Downgrade	Sell	Hold
NTGR	NETGEAR INC	Downgrade	Hold	Buy
HQS	HQ SUSTAINABLE MARITIME IND	Upgrade	Buy	Hold
UA	UNDER ARMOUR INC	Downgrade	Sell	Hold
SENO	SENORX INC	Initiated	Sell
CBNK	CHICOPEE BANCORP INC	Initiated	Hold
SDXC	SWITCH & DATA FACILITIES CO	Initiated	Sell
SMCI	SUPER MICRO COMPUTER INC	Initiated	Hold
ARAY	ACCURAY INC	Initiated	Sell