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 forecast company earnings. Objective elements include volatility of past operating revenue, financial strength and company cash flows.
has been upgraded to a buy from a hold. The company specializes in shipping liquefied natural gas. Earnings per share shot up 218.8% in the fourth quarter of fiscal 2006 compared with the same quarter a year earlier. The market is expecting Golar's earnings to continue to improve in the coming quarters. Along with this, the company's current net profit margin of 45.6% is significantly higher than the oil and gas storage and transportation industry average. Golar had been rated a hold since December 2005.
North American Palladium
has been upgraded to a hold from a sell. The company made 9 cents per share in the first quarter of fiscal 2007 after eight quarters of declining EPS. North American Palladium's current debt-to-equity ratio of 0.41 is below the industry average. The company also seems to have the ability to cover its short-term liquidity needs. PAL had been rated a sell since May 2005.
Auto parts manufacturer
has been boosted to a buy from a hold. The company's revenue growth in the first quarter of fiscal 2007 compared with the year-earlier period was modest at just 6.71%. However, that was still nearly double the industry average. Earnings per share are also up slightly over that same time period, and the company currently has a very low debt-to-equity ratio of 0.1. Magna International had been rated a hold since March 2007.
has been upgraded to a buy from a hold. While the company has reported somewhat volatile earnings recently, TheStreet.com Ratings feels it is poised for EPS growth in the coming year. Sales and net income were both up in the second quarter of fiscal 2007 compared with the same quarter earlier. The company's stock price performance has been solid, increasing 13.5% over the past 12 months. Ferrellgas had been rated a hold since May 2006.
Computer chip designer
( ARMHY) has been upgraded to a buy from a hold. The company's revenue jumped 16.7% in the first quarter of fiscal 2007 compared with the same quarter a year earlier. Revenue throughout the semiconductor industry only increased 1.3% during that same time period. In spite of this, earnings per share did not move at all over the past fiscal year. Analysts expect this to change and are forecasting EPS gains going forward. TheStreet.com Ratings feels ARM's gross profit margin is rather high, coming in at 82.1%. The company had been rated a hold since June 2006.
Some recent rating changes are highlighted below.