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.
Advanced health and security system manufacturer
has been upgraded to a buy from a hold. The company's earnings were up 177.8% in the most recent quarter compared with the year-earlier period. Meantime, Analogic has no debt to speak of and appears to have the ability to cover short-term cash needs. Investors seem to have noticed, and they have pushed the stock price up 39.1% in the past 12 months. ALOG had been rated a hold since June 2006.
has been downgraded to a sell from a hold. Audiovox's current stock price is not very different from what it was a year ago. TheStreet.com believes this is probably due to weak earnings growth and sees little in the future that could change the company's course. The gross profit margin for Audiovox is rather low at 20%, and the net profit margin trails the industry average. VOXX had been rated a hold since October 2005.
has been upgraded to a buy from a hold. The company makes parts and equipment for the lift truck and construction industry. Cascade's earnings took a huge jump in the first quarter of fiscal 2007, increasing 126.2% over the year-earlier period. The company is also enjoying notable revenue growth and solid stock price performance. In spite of all this, CAE still trades at a slight discount to its peers in the industry, which suggests there could still be some upside left. Cascade had been rated a hold since September 2006.
( RUS) has been upgraded to a hold from a sell. The company makes gift and baby products, including stuffed animals, greeting cards and nursery accessories. RUS earned 12 cents per share in the first quarter of fiscal 2007 after losing 24 cents per share in the year-earlier period. The stock price is up 35.9% in just the past three months. Russ Berrie and Company had been rated a sell since September 2005.
Regional air carrier
has been downgraded to a sell from a hold. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, poor profit margins and generally weak debt management. Although the 25.1% drop in Mesa's stock price over the past year could be seen as a positive by some investors, TheStreet.com Ratings feels it is still not a good buy right now. The company had been rated a hold since May 2006.
Some recent rating changes are highlighted below.