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.
The following ratings changes were generated on June 11.Volterra Semiconductor (VLTR), which designs, develops and markets power management semiconductors, has been upgraded to buy. Revenue growth came in higher than the industry average of 20%. Since the same quarter one year prior, revenue rose by 31%. Net income increased to $2.49 million from $360,000. Net operating cash flow has significantly increased to $3.86 million in the past year. The gross profit margin is rather high, currently at 58%. It has increased from the same quarter the previous year. Volterra Semiconductor had been rated hold since TheStreet.com Ratings initiated coverage on June 9, 2006.