TSC Ratings' Updates: Amazon.com

The following ratings changes were generated on Wednesday, Feb. 25.

We've downgraded Advanced Energy Industries(AEIS) from hold to sell. Advanced Energy Industries develops and produces components and products to plasma-based manufacturing processes, which are used by manufacturers of semiconductors and in industrial thin-film manufacturing processes. Our rating change is driven by the company's deteriorating net income, disappointing return on equity, poor profit margins, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Net income decreased from $4.2 million in the year-ago quarter to -$19 million in the most recent quarter, significantly underperforming the S&P 500 and the semiconductors and semiconductor equipment industry. Return on equity also decreased, a clear sign of weakness within the company. Earnings per share declined 600% compared with the year-earlier quarter, but the consensus estimate suggests that the company's two-year trend of declining EPS should reverse in the coming year. Advanced Energy Industries' gross profit margin of 26.9% is lower than desirable, having decreased significantly from the same period last year, and its net profit margin of -28.1% is significantly below the industry average.

Shares have tumbled by 48.9% over the past year, underperforming the S&P 500. Naturally, the overall market trend is bound to be a significant factor, and in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.