TSC Ratings' Updates: Allegiant

EPS improved significantly in the most recent quarter compared with the same quarter a year ago. During the past fiscal year, SJI reported lower earnings of $2.12 vs. $2.46 in the prior year. This year, the market expects an improvement in earnings to $2.30.

We've downgraded regulated electric and natural gas utility Integrys Energy Group(TEG Quote) from buy to hold. Strengths include its robust revenue growth and notable return on equity. However, as a counter to these strengths, we also find weaknesses including a decline in the stock price during the past year, deteriorating net income and weak operating cash flow.

Return on equity has improved slightly, which can be construed as a modest strength in the organization. Revenue rose by 51.9% since the same quarter last year, outpacing the industry average of 37.2% growth, but EPS declined steeply. The company has reported a trend of declining earnings per share over the past two years, but consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, it reported lower earnings of $2.81 vs. $3.54 in the prior year, and this year, the market expects an improvement to $3.38. Net operating cash flow has significantly decreased to -$734.60 million, or 1202.48% when compared with the same quarter last year.

Shares are down 18.3% on the year, reflecting the market's overall decline, which was actually deeper, and the sharp decline in Integrys' EPS. We do not see anything in this company's numbers that would change the one-year trend. Naturally, a bull or bear market could sway the movement of this stock.

Other ratings changes include Zoltec(ZOLT Quote) and Mercantile Bancorp(MBR Quote), both downgraded from hold to sell.

All ratings changes generated on Dec. 9 are listed below.

Ticker	Company	Current	Change	Previous
ALGT	Allegiant Travel	BUY	Upgrade	HOLD
BDR	Blonder Tongue Labs	SELL	Downgrade	HOLD
CEBK	Central Bancorp	SELL	Downgrade	HOLD
CLB	Core Laboratories	HOLD	Downgrade	BUY
CXPO	Crimson Exploration	HOLD	Upgrade	SELL
CYAN	Cyanotech	HOLD	Upgrade	SELL
DGIT	DG FastChannel	HOLD	Downgrade	BUY
DSWL	Deswell Industries	SELL	Downgrade	HOLD
MBR	Mercantile Bancorp	SELL	Downgrade	HOLD
MCY	Mercury General	HOLD	Downgrade	BUY
NAII	Natural Alternatives	SELL	Downgrade	HOLD
NAVR	Navarre	SELL	Downgrade	HOLD
NICK	Nicholas Financial	SELL	Downgrade	HOLD
NOIZ	Micronetics	SELL	Downgrade	HOLD
NWLI	National Western Life	HOLD	Downgrade	BUY
NYM	Nymagic	SELL	Downgrade	HOLD
OZRK	Bank of the Ozarks	BUY	Upgrade	HOLD
PDEX	Pro-Dex	SELL	Downgrade	HOLD
PTI	Patni Computer Systems	HOLD	Upgrade	SELL
PZZI	Pizza Inn	SELL	Downgrade	HOLD
QCC	Quest Capital	HOLD	Upgrade	SELL
SD	Sandridge Energy	SELL	Initiated
SJI	South Jersey Industries	BUY	Upgrade	HOLD
SVT	Servotronics	HOLD	Downgrade	BUY
TEG	Integrys Energy Group	HOLD	Downgrade	BUY
VOCS	Vocus	HOLD	Upgrade	SELL
WINN	Winn-Dixie Stores	HOLD	Upgrade	SELL
ZOLT	Zoltek	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.