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 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.

Electronics manufacturing services company

Benchmark Electronics

(BHE) - Get Report

has been upgraded to a buy from a hold. The company's revenue growth of 15.5% in its first quarter of 2007 compared with the year-earlier period outpaced the industry average, and its very low debt-to-equity ratio of 0.02 suggests very successful management of debt levels. Net operating cash flow increased 321.38% to $94.5 million in the first quarter compared with the same period in 2006. Benchmark had been rated a hold since March 2007.

Ferro

(FOE) - Get Report

, a specialty materials and chemicals producer, also has been upgraded to a buy from a hold. The company's net operating cash flow increased by 181.1% to $63.8 million in the first quarter of 2007 compared with the year-earlier period. Its stock price has increased 31.9% over the past 12 months, making it somewhat expensive compared with the rest of the industry. Given its other strengths, the higher price level is justified. Ferro had been rated a hold since June 2005.

Carrizo Oil & Gas

(CRZO) - Get Report

has been downgraded to a hold from a buy. The company's return on equity in the first quarter of 2007 is lower than its ROE from the same quarter one year prior, a clear sign of internal weakness. The stock price has risen 40.3% over the past 12 months, making it relatively expensive compared with the rest of its industry. The reduced upside potential is not good enough to warrant further investment at this time. Carrizo had been rated a buy since June 2005.

Titanium dioxide pigments producer

Kronos Worldwide

(KRO) - Get Report

has been downgraded to a hold from a buy. Net income decreased 17.8% in the first quarter of 2007 compared with the year-earlier period, significantly underperforming the rest of the chemicals industry and the

S&P 500

. The same quarter, the company's EPS declined by 18.8%, and it has not demonstrated a clear earnings trend in earnings over the past two years, making it difficult to accurately predict earnings for the coming year. Kronos had been rated a buy since April 2007.

Warner Music Group

( WMG), a music retailer and publishing house, has been downgraded to a sell from a hold. Its net income decreased by 285.7% in the second quarter of 2007 compared with the year-earlier period, and its debt-to-equity ratio of 566.5 is very high, implying very poor management of debt levels within the company. Over the past year, Warner's stock tumbled by 37.75%. While the sharp decline has made the stock cheaper (in proportion to its earnings over the past year) than most stocks in its industry, due to other concerns, the stock is not a good buy right now. It had been rated a hold since February 2007.