TSC Ratings' Updates: Sears

The following ratings changes were generated on Monday, Dec. 8.

We've downgraded CapitalSource(CSE Quote), which provides loans to small and medium-sized businesses, from hold to sell, driven by its generally disappointing historical performance in the stock itself, deteriorating net income, generally weak debt management, disappointing return on equity and feeble growth in its earnings per share.

Net income decreased by 71.5% since the same quarter last year, from $28.3 million to $8.1 million, underperforming both the S&P 500 and the REITs industry. The debt-to-equity ratio is very high at 3.74 and currently higher than the industry average, implying very poor management of debt levels within the company. Current return on equity is lower than its ROE from the same quarter one year prior, a clear sign of weakness within the company, and on the basis of ROE, CapitalSource underperforms both the S&P 500 and the industry. ...