Each weekday, 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.
Life insurance company
has been upgraded to buy from hold. The company's third-quarter revenue rose 11.1% compared with the same period last year, though this trailed the industry average of 18.1%. Its debt-to-equity ratio of 0.30, while very low, is currently higher than the industry average.
Manulife's third-quarter earnings increased by 14.8% to 70 cents a share compared with 61 cents a share in the same period last year. The company has demonstrated a pattern of positive EPS growth over the past two years. During the past fiscal year, Manulife increased its bottom line by earning $2.51 per share compared with $2.04 a share in the prior year.
TheStreet.com Ratings believe these strengths outweigh the fact that the company is trading at a premium valuation on the basis of its current price compared with such items as earnings and book value. Because of stock price movement, Manulife was rated a hold on Nov. 8, prior to which it had been rated a buy since November 2005.
( GENZ) operates through five segments: renal, therapeutics, transplant, biosurgery and genetics. It has been upgraded to a buy from a hold. The company's third-quarter revenue rose 18.7% compared with the same period last year, as sales of its top-selling drug Cerezyme grew 13.4% year over year to $286.10 million. During the same time frame, earnings rose to 58 cents per share from 6 cents a share in the third quarter of 2006.
Genezyme has been improving its product mix. It recently obtained marketing approvals from various countries for Renvela, Elaprase and Cholestagel. In addition, the company reported highly encouraging results for two product candidates that concentrate on multiple sclerosis. It also acquired Bioenvision, with which Genzyme co-developed the leukemia drug Clolar. Genzyme had been rated a hold since February 2007.
designs, manufactures and markets high-performance analog, mixed-signal and digital signal processing for industrial, communication, computer and consumer applications. It has been downgraded to hold from buy.
The company's earnings fell 29.3% in the fourth quarter of its fiscal year because of restructuring charges on its manufacturing business in Ireland. Net income declined to $97.89 million, or 31 cents per share, from $138.42 million, or 39 cents a share in the fourth quarter of 2006. Revenue rose by 6.4% in the fourth quarter compared with the same period last year, driven by sales growth of 17% in its consumer segment and 9.3% from its communications segment.
On the other hand, its computer division registered a sales decline of 8.3% in the fourth quarter compared with the same period last year, as a result of the company's decision to de-emphasize power management used in desktop and laptop computers. For the full year, Analog Devices earned $496.91 million, or $1.50 per share, on revenue growth of 8.7%. It had been rated a buy since March 2007.
Enerplus Resources Fund
, with its subsidiaries, operates as an open-end investment trust. It owns a diversified portfolio of crude oil and natural gas in western Canada and the U.S. It has been upgraded to buy from sell.
While the company's gross profit margin of 74.3% for the third quarter was very high, it has managed to decrease from the same period last year. Although Enerplus has a very low debt-to-equity ratio of 0.24, it is currently higher than that of the industry, and its quick ratio of 0.32 demonstrates a lack of ability to pay short-term obligations. Its stock price is down by 9.06% in the last 12 months. Despite the decline in its share price over the last year, the stock is still more expensive than most other companies in its industry.
However, TheStreet.com Ratings feels that the company's other strengths compensate for this. Enerplus had been rated a buy since November 2005, though it was briefly downgraded rated to a sell on Nov. 14. At its current price level, it again presents an attractive buy opportunity.
( MDG) mines gold and other precious metals in Chile, Mexico and the U.S. It has been downgraded to a hold from a buy. The company's third-quarter revenue growth of 23.6% compared with the same period last year trailed the industry average of 35.1%. Meridian also shows expanding profit margins, and its stock has risen by 23.87% in the past 12 months.
However, its earnings swung to a loss of 13 cents per share compared with a profit of 6 cents a share in the same period last year. The company has not demonstrated a clear trend in earnings over the past two years, making it difficult to accurately predict earnings for the coming year.
announced that it had begun the process of acquiring Meridian and this deal is expected to be completed by the end of the year. TheStreet.com Ratings' hold rating indicates that there is little upside potential remaining for this stock's price. Meridian had been rated a buy since September 2007.
Additional ratings changes are listed below.