TSC Ratings' Updates: Aeropostale

Mindray's debt-to-equity ratio of 0.35 is low but is higher than that of the industry average. The company's quick ratio of 1.22 is sturdy. Its gross profit margin is rather high at 54.20%, but it has decreased from the same period last year. The net profit margin of 19.10% trails the industry average. The return on equity has improved slightly when compared with the same quarter one year prior. On the basis of ROE, Mindray underperformed the health care equipment and supplies industry but outperformed the S&P 500.

EPS are up 33.3% in the most recent quarter compared with the same quarter last year. The company has demonstrated a pattern of positive earnings per share growth over the past year, which we feel should continue. During the past fiscal year, it increased its bottom line by earning 70 cents vs. 25 cents in the prior year. This year, the market expects an improvement in earnings to 95 cents. Shares are down 66.1% on the year, underperforming the S&P 500. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. Based on its current price in relation to its earnings, Mindray is still more expensive than most of the other companies in its industry.

We've downgraded Petroleo Brasiliero(PBR Quote), which engages in the exploration, exploitation, and production of oil from reservoir wells, shale and other rocks, from buy to hold. Strengths include its robust revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, weak operating cash flow and disappointing return on equity.

Revenue leaped 62.9% since the same quarter last year, outperforming the industry average of 30.3% and boosting EPS. The company improved earnings per share by 43.8% in the most recent quarter compared to the same quarter a year ago. Petroleo Brasiliero has demonstrated a pattern of positive earnings per share growth over the past two years, which we feel should continue. During the past fiscal year, it increased its bottom line by earning $2.99 vs. $2.92 in the prior year. This year, the market expects an improvement in earnings to $4.55.

Petroleo Brasiliero's gross profit margin of 39.4% is strong, and its net profit margin of 18.6% compares favorably with the industry average. Net operating cash flow has decreased to $6,464 million, or 10.4% when compared with the same quarter last year. In addition, when comparing the cash generation rate with the industry average, the firm's growth is significantly lower. Shares are down 71.6% on the year, underperforming the S&P 500. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.

Other ratings changes include New York & Co.(NWY Quote) and Netlogic Microsystems(NETL Quote), both downgraded from hold to sell.

All ratings changes generated on Nov. 21 are listed below.

Ticker	Company	Current	Change	Previous
ANR	Alpha Natural Resources	HOLD	Downgrade	BUY
ARO	Aeropostale	HOLD	Downgrade	BUY
CSCX	Cardiac Science	HOLD	Downgrade	BUY
CV	Central Vermont Public Service	HOLD	Downgrade	BUY
DAAT	DAC Technologies	SELL	Downgrade	HOLD
DCI	Donaldson	HOLD	Downgrade	BUY
FCF	First Commonwealth Financial	HOLD	Downgrade	BUY
FNB	FNB	HOLD	Downgrade	BUY
FTI	FMC Technologies	HOLD	Downgrade	BUY
HCP	HCP	HOLD	Downgrade	BUY
HPCO	Hallador Petroleum	SELL	Downgrade	HOLD
IBM	IBM	HOLD	Downgrade	BUY
IWA	Iowa Telecom	HOLD	Downgrade	BUY
MASI	Masimo	SELL	Downgrade	HOLD
MR	Mindray Medical	SELL	Downgrade	HOLD
MWIV	MWI Veterinary Supply	HOLD	Downgrade	BUY
NED	Noah Education	SELL	Initiated
NETL	Netlogic Microsystems	SELL	Downgrade	HOLD
NHI	National Health Investors	HOLD	Downgrade	BUY
NWY	New York & Co.	SELL	Downgrade	HOLD
PAAS	Pan American Silver	SELL	Downgrade	HOLD
PBR	Petroleo Brasileiro	HOLD	Downgrade	BUY
SWKS	Skyworks Solutions	HOLD	Downgrade	BUY
SWS	SWS Group	HOLD	Downgrade	BUY
SYK	Stryker	HOLD	Downgrade	BUY
TMRK	Terremark Worldwide	SELL	Downgrade	HOLD
TWGP	Tower Group	HOLD	Downgrade	BUY
USPH	U.S. Physical Therapy	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.