TSC Ratings' Updates: International Paper

The following ratings changes were generated on Thursday, March 5.

We've downgraded footwear retailer Brown Shoe(BWS) from hold to sell, driven by its deteriorating net income, disappointing return on equity, weak operating cash flow, generally weak debt management and generally disappointing historical performance in the stock itself.

Net income fell to -$153.1 million in the most recent quarter from $14 million in the same quarter last year, significantly underperforming the S&P 500 and the specialty retail industry. Return on equity also greatly decreased, a signal of major weakness within the corporation. Net operating cash flow significantly decreased to -$7.2 million, underperforming the industry average. Brown Shoe's debt-to-equity ratio of 0.7 is somewhat low overall but is high compared with the industry average. Its quick ratio of 0.5 is very low, demonstrating weak liquidity.

Shares have tumbled by 78.4% over the year, underperforming the S&P 500, and EPS are down 1,215.2% compared with the year-earlier quarter. 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.

We've downgraded ConocoPhillips(COP) from hold to sell, driven by its deteriorating net income, disappointing return on equity, poor profit margins, weak operating cash flow and generally weak debt management.