TSC Ratings' Updates: Cadence

Revenue leaped by 66.4% since the same quarter a year ago, boosting EPS. Dorchester has a debt-to-equity ratio of zero and maintains a quick ratio of 30.32, which clearly demonstrates the ability to cover short-term cash needs. Its gross profit margin is currently very high at 93.9%, though it has decreased from the same period last year. Dorchester's net profit margin of 75.9% significantly outperformed the industry average.

Shares are down 23.7%, in part due to the market's overall decline. We do not see anything in this company's numbers that would change the one-year trend, though a bull or bear market could sway the movement of this stock.

We've downgraded Intuitive Surgical(ISRG Quote), which engages in the design, manufacture and marketing of da Vinci surgical systems, from buy to hold. Strengths include its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and impressive record of earnings per share growth. However, we find that the stock has had a generally disappointing performance in the past year.

Revenue leaped by 50.4% since the same quarter last year, outperforming the industry average of 15.3% and boosting EPS. Intuitive has a debt-to-equity ratio of zero and maintains a quick ratio of 3.96, which clearly demonstrates the ability to cover short-term cash needs. ROE has improved slightly when compared to the same quarter one year prior, which can be construed as a modest strength in the organization.

Shares are down 59.2% on the year, underperforming the S&P 500, but do not assume that Intuitive can now be tagged as cheap and attractive. Based on its current price in relation to its earnings, it is still more expensive than most of the other companies in its industry

We've upgraded SXC Health Solutions(SXCI Quote) from sell to hold. Strengths include its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. However, we also find weaknesses including disappointing return on equity, poor profit margins and weak operating cash flow.

Revenue leaped by 1,332.2% since the same quarter a year ago, greatly outperforming the industry average of 3.7% growth and boosting EPS. Although SXC's debt-to-equity ratio of 0.25 is very low, it is currently higher than that of the industry average. The company maintains an adequate quick ratio of 1.12, which illustrates the ability to avoid short-term cash problems. SXC's gross profit margin is currently extremely low, at 2.40%, having decreased from the same quarter last year. Net operating cash flow has decreased to $3.56 million, or 46.05% when compared with the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.

All ratings changes generated on Dec. 12 are listed below.

Ticker	Company	Current	Change	Previous
AANB	Abigail Adams National Bancorp	SELL	Downgrade	HOLD
ALE	Allete	HOLD	Downgrade	BUY
BHIT	BHIT	SELL	Downgrade	HOLD
CDNS	Cadence Design Systems	SELL	Downgrade	HOLD
DMLP	Dorchester Minerals	HOLD	Downgrade	BUY
DXPE	DXP Enterprises	HOLD	Downgrade	BUY
FWV	First West Virginia Bancorp	BUY	Upgrade	HOLD
GLOB	Global Med Technologies	SELL	Downgrade	HOLD
IOT	Income Opportunity Realty Investors	HOLD	Upgrade	SELL
ISRG	Intuitive Surgical	HOLD	Downgrade	BUY
KSW	KSW	BUY	Upgrade	HOLD
NNUP	Nocopi Technologies	SELL	Downgrade	HOLD
PIP	Pharmathene	SELL	Initiated
PTIE	Pain Therapeutics	HOLD	Downgrade	BUY
SXCI	SXC Health Solutions	HOLD	Upgrade	SELL
TNFG	Terra Nova Financial Group	SELL	Downgrade	HOLD
TRCI	Technology Research	HOLD	Upgrade	SELL
VVDL	Vivid Learning Systems	HOLD	Upgrade	SELL

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.

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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.