TSC Ratings' Updates: Eldorado

Shares jumped 31.9% year over year, outperforming the broader market during that same timeframe, but our hold rating indicates that we do not recommend additional investment in this stock at the current time.

We've downgraded Smithfield Foods(SFD Quote), which engages in the processing of pork and production of hog, from hold to sell, driven by its generally disappointing historical performance in the stock itself, feeble growth in its earnings per share, deteriorating net income, generally weak debt management and disappointing return on equity.

Net income decreased by 75.9% since the same quarter a year ago, to $4.2 million, underperforming the S&P 500 and the food products industry. The 1.2 debt-to-equity ratio of is relatively high when compared with the industry average, suggesting a need for better debt level management, and the 0.4 quick ratio demonstrates an inability to cover short-term cash needs. ROE decreased from the same quarter last year, a clear sign of weakness.

EPS have declined by 223.5% year over year. During the past fiscal year, Smithfield reported lower earnings of $1.04 vs. $1.67 in the prior year. For the next year, the market is expecting a contraction of 134.6% in earnings to -36 cents. The stock has tumbled 46.2%, underperforming the S&P 500, but it is still more expensive (when compared with its current earnings) than most other companies in its industry.

Other ratings changes include JetBlue(JBLU Quote), upgraded from sell to hold, and ConMed(CNMD Quote), downgraded from buy to hold.

All ratings changes generated on Jan. 6 are listed below.

Ticker Company Current Change Previous ACM Aecom Technology HOLD Upgrade SELL CCBG Capital City Bank Group HOLD Downgrade BUY CNMD ConMed HOLD Downgrade BUY CVBK Central Virginia Bankshares SELL Downgrade HOLD DT Deutsche Telekom BUY Upgrade HOLD EGO Eldorado Gold BUY Upgrade HOLD FFFD North Central Bancshares SELL Downgrade HOLD FNF Fidelity National Financial HOLD Upgrade SELL HOMB Home Bancshares BUY Upgrade HOLD HWK Hawk BUY Upgrade HOLD JBLU JetBlue Airways HOLD Upgrade SELL LPSB LaPorte Bancorp SELL Initiated - MFLR Mayflower Bancorp SELL Downgrade HOLD NBN Northeast Bancorp SELL Downgrade HOLD SAFM Sanderson Farms HOLD Upgrade SELL SFD Smithfield Foods SELL Downgrade HOLD SHLO Shiloh Industries SELL Downgrade HOLD SRNN Southern Banc SELL Downgrade HOLD STEI Stewart Enterprises SELL Downgrade HOLD TMCV Temecula Valley Bancorp SELL Downgrade HOLD TTIL TTI Team Telecom SELL Downgrade HOLD VUNC Vuance SELL Initiated

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.