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TheStreet Open House

TSC Ratings' Upgrades, Downgrades

Erie Indemnity's return on equity exceeds that of both the industry average and the S&P 500. Recent weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share. Net operating cash flow has significantly decreased to negative $13.8 million from the year-ago quarter. In addition, the firm's cash-flow growth rate trails the industry average. Erie Indemnity had been rated buy since June 12, 2006.

First Advantage (FADV), a provider of risk mitigation and business solutions, has been downgraded to hold In the most recent quarter, the company's net income increased 18% year over year. The debt-to-equity ratio is currently higher than the industry average. On the other hand, First Advantage's quick ratio of 1.80 demonstrates an ability to cover short-term liquidity needs.

Net operating cash flow has significantly decreased to negative $35.2 million from the year-ago quarter. In addition, when comparing to the industry average, the firm's growth rate is much lower. Shares have fallen 27% in the past year. First Advantage had been rated buy since April 1.

InterContinental Exchange (ICE), which owns and operates an Internet-based, global electronic marketplace, has been downgraded to hold. ICE's very impressive revenue growth greatly exceeded the industry average. Since the same quarter one year prior, revenue leaped 64%. InterContinental Exchange reported significant earnings-per-share improvement in the most recent quarter compared with the same quarter a year ago.

The company has demonstrated a pattern of positive earnings per share growth over the past two years. Its debt-to-equity ratio is very low and is below the industry average. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.35 is weak. InterContinental Exchange had been rated buy since May 22.

Susquehanna Bancshares (SUSQ ), which provides retail and commercial banking, has been downgraded to a hold. The company's revenue growth came in higher than the industry average. Revenue rose 43% year over year in the most recent quarter. However, this growth in revenue did not reach the company's bottom line, displayed by a decline in earnings per share.

The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the commercial banks industry. Net income increased 35% year over year to $28 million. The gross profit margin for Susquehanna is rather high at 59%. The company's return on equity has slightly decreased from the same quarter one year prior and lags the industry average. Susquehanna Bancshares had been rated buy since Feb. 21.

Targa Resource Partners ( NGLS) has been initiated with a hold rating. The company engages in gathering, compressing, treating, processing, and selling natural gas alongside fractionating and selling natural gas liquids (NGLs) and NGL products. Targa's very impressive revenue growth greatly exceeded the industry average, and growth in revenue appears to have helped boost earnings per share.

On the other hand, the company's return on equity is significantly below the industry average and lags the S&P 500. The debt-to-equity ratio of 1.01 is relatively high when compared with the industry average. The company maintains a poor quick ratio of 0.81, which illustrates the inability to avoid short-term cash problems. Shares have fallen 28% in the past year.

Additional ratings changes from June 13 are listed below.


Ticker Company Name Change New Rating Former Rating
ATAC ATC Technology Upgrade Buy Hold
BHIT Bhit Inc Downgrade Sell Hold
CENTA Central Garden & Pet Co Downgrade Sell Hold
DNBF DNB Financial Corp Upgrade Hold Sell
DXR Daxor Corp Upgrade Buy Hold
ERIE Erie Indemnity Co Downgrade Hold Buy
FADV First Advantage Corp Downgrade Hold Buy
GBR New Concept Energy Inc Upgrade Hold Sell
ICE InterContinental Exchange Inc Downgrade Hold Buy
IOT Income Opportunity Rlty Invs Downgrade Sell Hold
KAZ BMB Munai Inc Upgrade Buy Hold
NAVR Navarre Corp Upgrade Hold Sell
NGLS Targa Resources Partners LP Initiated Hold
PRK Park National Corp Downgrade Hold Buy
RVI Retail Ventures Inc Upgrade Hold Sell
SUSQ Susquehanna Bancshares Inc Downgrade Hold Buy
TAST Carrols Restaurant Group Inc Initiated Sell
TICC TICC Capital Corp Downgrade Sell Hold

This article was written by a staff member of TheStreet.com Ratings.
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