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.
Brazilian electricity provider
Copel-CIA Paranaense Energia
has been upgraded to a buy from a hold. Revenue was up 12.3% in the first quarter of fiscal 2007 compared to the same quarter a year ago. The growth seems to have helped to boost earnings per share, which jumped 75.4% during that time period. Although the stock price has more than doubled in the past 12 months, the company still trades at a deep discount to its peers. ELP had been rated a hold since April 2007.
Golden Star Resources
has been downgraded to a hold from a buy. The company lost 2 cents per share in the first quarter of fiscal 2007 after gaining 9 cents per share a year earlier. TheStreet.com Ratings feels that operating cash flow is weak and profit margins are poor. Golden Star had been rated a buy since April 2007.
Medical products manufacturer
( IMA) has been upgraded to a buy from a hold. The company makes pregnancy and fertility tests, among other products.
The company's revenue grew by 24.4% in the first quarter of fiscal 2007 compared with the year-earlier period, outpacing the industry average of 10.7%. Inverness was also profitable in the most recent quarter, earnings 14 cents per share after losing 9 cents per share in the first quarter of 2006. Debt levels are low and the company seems to be in a largely solid financial position.
These positives seems to have pushed the stock price higher; shares are up 69.4% in the past 12 months. IMA had been rated a hold since May 2007.
Radiation Therapy Services
( RTSX) has been downgraded to a hold from a buy. The company owns and operates radiation treatment centers. TheStreet.com Ratings feels the company has not been very careful in the management of its balance sheet. RTSX has a debt-to-equity ratio of 1.5, which is relatively high when compared with the industry average. The company had been rated a buy since December 2006.
has been downgraded to a sell from a hold. The company invests in residential and commercial real estate loans and in securities backed by real estate loans. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, weak operating cash flow and disappointing return on equity. Redwood Trust's 12.9 debt-to-equity ratio is higher than the industry average. RWT had been rated a hold since June 2005.
Some recent rating changes are highlighted below.