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.
makes computer storage systems. It has been downgraded to hold from buy. The company has shown a deteriorating net income, disappointing return on equity and poor profit margins. Revenue fell significantly faster than the industry average of 7%.
Since the same quarter a year ago, revenue fell by 26.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share. The gross profit margin is rather low; currently at 18.60%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 0.90% trails that of the industry average. It had been rated buy since March 2007.
( HRZ) is a container shipping and integrated logistics operations company. It has been upgraded to hold from sell. The company has shown solid stock price performance, compelling growth in net income and notable return on equity.
Powered by strong earnings growth and other important driving factors, this stock has surged by 111.78% over the past year, outperforming the
index during the same period. The hold rating indicates that TheStreet.com Ratings does not recommend additional investment in this stock despite its gains in the past year. It had been rated sell since October 2006.
, which makes networking components, has been downgraded to hold. The company has seen a generally disappointing performance in the stock itself and poor profit margins. The company's gross profit margin is currently lower than what is desirable, coming in at 30.10%.
It has decreased from the same quarter the previous year. Looking ahead, TheStreet.com Ratings does not see anything in this company's numbers that would change the one-year trend. It was down over the past 12 months, and it could be down further in the next 12. It had been rated buy since October 2006.
makes connectors and wiring systems for telecommunications networks. It has been downgraded to hold. The company has seen deteriorating net income, disappointing return on equity and feeble growth in earnings per share.
Communications Systems underperformed when compared the industry average of 13.8%. Revenues slightly dropped by 6.8% since the same quarter a year ago. The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the communications equipment industry.
The net income decreased by 31.4% from the same quarter one year ago. The company's current return on equity has slightly decreased from the same quarter one year prior, implying a minor weakness in the organization. It had been rated buy since June 2005.
China Natural Resources
engages in mining zinc, iron and other minerals. It has been upgraded to hold. The company has a largely solid financial position with reasonable debt levels by most measures, notable return on equity and robust revenue growth.
Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 2.74 is very high and demonstrates very strong liquidity. China Natural Resources reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive EPS growth over the past two years. It had been rated sell since June 2005.
( WSTF) is a temporary staffing services company. It has been downgraded to hold. The company has had feeble growth in earnings per share, deteriorating net income and disappointing return on equity.
Westaff, with its decline in revenue, underperformed compared with the industry average of 8.4%. Revenue dropped by 6.3% from a year ago. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share. It had been rated buy since May 2006.
Some recent rating changes are highlighted below.