TSC Ratings' Updates: Tyson

We've downgraded Tyson Foods(TSN Quote), which engages in the production, distribution and marketing of chicken, beef, pork, prepared foods and related products, from hold to sell, driven by its deteriorating net income, disappointing return on equity, poor profit margins, weak operating cash flow and generally disappointing historical performance in the stock itself.

Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year -- it has tumbled by 48.11%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 103.12% compared to the year-earlier quarter.

Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, Tyson is still more expensive than most of the other companies in its industry. The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to the S&P 500 and the food products industry.

Net income has decreased by 91.9% when compared to the same quarter one year ago, falling from $111.00 million to $9.00 million. The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the food products industry and the overall market, Tyson's return on equity is below that of both the industry average and the S&P 500.

The gross profit margin for Tyson is currently extremely low, coming in at 5.80%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 0.10% trails that of the industry average. Net operating cash flow has significantly decreased when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

Other ratings changes include Strategic Hotels(BEE Quote), downgraded from sell to hold, and Nortel(NT Quote), downgraded from sell to hold.

All ratings changes generated on Nov. 7 are listed below.

AWH	Allied World	SELL	Downgrade	HOLD
AZN	AstraZeneca	HOLD	Downgrade	BUY
BEE	Strategic Hotels	SELL	Downgrade	HOLD
BZC	Breeze-Eastern	HOLD	Downgrade	BUY
CCI	Crown Castle	SELL	Downgrade	HOLD
CEBK	Central Bancorp	FROZEN	Downgrade	HOLD
DSCM	Drugstore.com	SELL	Downgrade	HOLD
FCNCA	First Citizens	HOLD	Downgrade	BUY
FIX	Comfort Systems	HOLD	Downgrade	BUY
FSBI	Fidelity Bancorp	SELL	Downgrade	HOLD
GET	Gaylord Entertainment	SELL	Downgrade	HOLD
HES	Hess	HOLD	Downgrade	BUY
LAMR	Lamar Advertising	FROZEN	Downgrade	HOLD
LUK	Leucadia	HOLD	Downgrade	BUY
MDH	MHI Hospitality	SELL	Downgrade	HOLD
MOG.B	MOOG	HOLD	Downgrade	BUY
NICK	Nicholas Financial	FROZEN	Downgrade	HOLD
NT	Nortel	SELL	Downgrade	HOLD
OTT	Otelco	HOLD	Upgrade	SELL
PRSC	Providence Service	SELL	Downgrade	HOLD
R	Ryder System	HOLD	Downgrade	BUY
RGEN	Repligen	HOLD	Downgrade	BUY
SE	Spectra Energy	SELL	Downgrade	HOLD
SJI	South Jersey Industries	FROZEN	Upgrade	HOLD
SNHY	Sun Hydraulics	HOLD	Downgrade	BUY
SNN	Smith & Newphew	HOLD	Downgrade	BUY
SWKS	Skyworks Solutions	BUY	Upgrade	HOLD
TSN	Tyson Foods	SELL	Downgrade	HOLD
UEIC	Universal Electronics	HOLD	Downgrade	BUY

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.