TSC Ratings' Updates: Winn-Dixie

Shares are down 23.7% on the year, in part reflecting the market's overall decline. 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.

We've downgraded food retailer Winn-Dixie Stores(WINN Quote) from hold to sell, driven by its decline in the stock price during the past year, feeble growth in its earnings per share, deteriorating net income, disappointing return on equity and weak operating cash flow.

Winn-Dixie Stores has experienced a steep decline in earnings per share in the most recent quarter in comparison with its performance from the same quarter a year ago. During the past fiscal year, it reported lower earnings of 26 cents vs. $5.67 in the prior year. For the next year, the market is expecting a contraction of 36.5% in earnings to 17 cents. Net income decreased by 187.3% compared with the same quarter a year ago, underperforming the S&P 500 and the food and staples retailing industry. ROE has greatly decreased, a signal of major weakness. Net operating cash flow has significantly decreased to $15.8 million, or 70.7% when compared with the same quarter last year, but Winn-Dixie is in line with the industry average cash flow growth rate of -75.14%.

Shares are down 13.5% over the past year, due to the market's overall decline and the sharp decline in the company's EPS. Other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.

All ratings changes generated on Dec. 15 are listed below.

Ticker Company Current Change Previous CWST Casella Waste Systems SELL Downgrade HOLD DJCO Daily Journal HOLD Downgrade BUY DVLN DVL SELL Downgrade HOLD MCZ Mad Catz Interactive SELL Downgrade HOLD NEON Neonode SELL Initiated   NTT Nippon Telegraph & Telephone BUY Upgrade HOLD NZYM Synthetech SELL Downgrade HOLD SIMC Simclair SELL Downgrade HOLD SJT San Juan Basin Royalty Trust HOLD Downgrade BUY UTMD Utah Medical Products HOLD Downgrade BUY WINN Winn-Dixie Stores 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.