TSC Ratings' Updates: Genzyme

Valhi's return on equity has greatly decreased from the same quarter a year ago, a signal of major weakness within the corporation, and it significantly trails both the industry average and the chemicals industry. Valhi's gross profit margin of 19.3% is low, having decreased from the same quarter a year ago, and its net profit margin of -5.9% is significantly below the industry average. Net operating cash flow has decreased to $40.90 million, or 39.85% compared with the same quarter last year, and the firm's growth rate is much lower than the industry average. Valhi's current debt-to-equity ratio of 1.77 is quite high overall and when compared with the industry average, suggesting that the current management of debt levels should be re-evaluated. Even though the debt-to-equity ratio is weak, Valhi's quick ratio is somewhat strong at 1.17, demonstrating the ability to handle short-term liquidity needs.

Shares have plunged by 42.1% over the year, dragged down in part by the decline in the S&P 500, and the stock's decline could help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.

Other ratings changes include China BAK(CBAK Quote) and Landry's(LNY Quote), both downgraded from hold to sell.

All ratings changes generated on Nov. 14 are listed below.

Ticker	Company	Current	Change	Previous
AAME	Atlantic American	SELL	Downgrade	HOLD
ALK	Alaska Air	HOLD	Upgrade	SELL
ASEI	American Science	BUY	Upgrade	HOLD
BRK.A	Berkshire Hathaway	HOLD	Downgrade	BUY
CBAK	China BAK	SELL	Downgrade	HOLD
CEDC	Central European Distribution	HOLD	Downgrade	BUY
FLY	Babcock & Brown	SELL	Initiated
FNM	Fannie Mae	SELL	Downgrade	HOLD
FRP	Fairpoint Communications	SELL	Downgrade	HOLD
FSCI	Fisher Communications	HOLD	Downgrade	BUY
GENZ	Genzyme	BUY	Upgrade	HOLD
GHL	Greenhill	HOLD	Downgrade	BUY
IFF	International Flavors & Fragrances	HOLD	Downgrade	BUY
ING	ING Groep	SELL	Downgrade	HOLD
LNY	Landry's	SELL	Downgrade	HOLD
MAM	Maine & Maritimes	BUY	Upgrade	HOLD
PRGN	Paragon Shipping	SELL	Initiated
QXM	Qiao Xing Mobile	SELL	Initiated
RCMT	RCM Technologies	SELL	Downgrade	HOLD
RLI	RLI	BUY	Upgrade	HOLD
SBSI	Southside Bancshares	HOLD	Downgrade	BUY
SSY	SunLink Health	SELL	Downgrade	HOLD
SUP	Superior Industries	SELL	Downgrade	HOLD
VHI	Valhi	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.