TSC Ratings' Updates: Apple

Shares are down 57.44% on the year, underperforming the S&P 500. The fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.

We've downgraded Toll Brothers (TOL) from hold to sell, driven by its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, poor profit margins and decline in the stock price during the past year.

Toll Brothers has experienced a steep decline in earnings per share in the most recent quarter compared with its performance from the same quarter a year ago. Earnings per share have declined over the last two years, and we anticipate that this should continue in the coming year. During the past fiscal year, Toll reported lower earnings of 19 cents vs. $4.18 in the prior year. For the next year, the market is expecting a contraction of 1026.3% in earnings to -$1.76. Net income is down 210.6% compared with the same quarter last year, to -$29.3 million, significantly underperforming the S&P 500 and the household durables industry.

Return on equity has also greatly decreased, a signal of major weakness within the corporation. Toll's return on equity significantly trails that of both the industry average and the S&P 500. It's gross profit margin of 10.4% is extremely low, having decreased from the same quarter last year, and its net profit margin of 3.6% trails the industry average. Shares are down 14.5% on the year, which we believe reflects several factors, including the market's overall decline (which was actually deeper), the sharp decline in the company's earnings per share. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.

Other ratings changes include Biogen Idec(BIIB), downgraded from buy to hold, and GameStop(GME), also downgraded from buy to hold.

All ratings changes generated on Nov. 13 are listed below.

Ticker	Company	Current	Change	Previous
AAPL	Apple	HOLD	Downgrade	BUY
AGM.A	Federal Agriculture	SELL	Downgrade	HOLD
AGU	Agrium	HOLD	Downgrade	BUY
AIP	Hadera paper	HOLD	Downgrade	BUY
BCO	Brinks	HOLD	Downgrade	BUY
BIIB	Biogen Idec	HOLD	Downgrade	BUY
BNE	Bowne	SELL	Downgrade	HOLD
BRC	Brady	HOLD	Downgrade	BUY
BUD	Anhueser-Busch	HOLD	Downgrade	BUY
CSFL	Centerstate Banks	HOLD	Downgrade	BUY
CSL	Carlisle	SELL	Downgrade	HOLD
CXO	Concho Resources	SELL	Downgrade	HOLD
EL	Estee Lauder	HOLD	Downgrade	BUY
FLS	FlowerServe	HOLD	Downgrade	BUY
FRT	Federal Realty	HOLD	Downgrade	BUY
GME	GameStop	HOLD	Downgrade	BUY
GNW	Genworth Financial	SELL	Downgrade	HOLD
GSVI	GSV	HOLD	Upgrade	SELL
HOLX	Hologic	SELL	Downgrade	HOLD
IEP	Icahn Enterprises	SELL	Downgrade	HOLD
INTX	Intersections	HOLD	Downgrade	BUY
LCRY	Lecroy	SELL	Downgrade	HOLD
MELI	Mercadolibre	SELL	Initiated
MTSC	MTS Systems	HOLD	Downgrade	BUY
NATH	Nathan's Famous	HOLD	Downgrade	BUY
OPLK	Oplink Communications	SELL	Downgrade	HOLD
SNA	Snap-On	HOLD	Downgrade	BUY
SVR	Syniverse	HOLD	Downgrade	BUY
TOL	Toll Brothers	SELL	Downgrade	HOLD
TRMB	Trimble Navigation	HOLD	Downgrade	BUY
TSU	TIM Participacoes	SELL	Downgrade	HOLD
VM	Virgin Mobile	SELL	Initiated
WAT	Waters	HOLD	Downgrade	BUY
XNPT	Xenoport	SELL	Downgrade	HOLD

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.

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