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.
engages in the production and distribution of Coca-Cola beverages in Chile, Brazil and Argentina. It has been upgraded to buy from hold. The company's revenue grew by 42.3% in the second quarter of 2007 compared with the same period last year, while net income increased by 66.78% in the same timeframe.
An earnings increase of 58.33% in the second quarter continued a pattern of EPS growth over the past two years. Its other strengths include a notable return on equity and a stock price that has increased by 30.82% over the past 12 months. Embotelladora Andina had been rated a hold since June 2007.
Waste management company
Allied Waste Industries
( AW) has been upgraded to buy from hold. The rating is driven in part by the company's long-term strategy to improve profitability, which includes an agreement to sell certain solid waste landfill and collection assets. Allied Waste also has enacted several cost-reduction programs to lower expenses, and a de-leveraging strategy to reduce debt.
The company has a robust pipeline of alternative energy projects to further enhance cost-effectiveness by offsetting the use of oil and natural gas. The company posted 2.3% top-line growth in the second quarter, driven by growth across all business segments. Allied Waste had been rated a hold since August 2005.
provides construction, repair and maintenance services, primarily to the downstream petroleum and power industries. It has been downgraded to hold from buy. The company's revenue growth of 36.2% in the fourth quarter of its fiscal 2007 compared with the same period last year outpaced the industry average of 24.6%.
Matrix has a largely solid financial position with reasonable debt levels by most measures, as well as a stock price that has increased by 41.69% in the past 12 months. However, the company's net income decreased by 41.9% in the fourth quarter of its fiscal year, compared with the same period last year, and net operating cash flow decreased 46.53% to $5.27 million over the same period. Matrix Service had been rated a buy since August 2006.
First Community Bancshares
operates as the holding company for First Commercial Bank. It has been upgraded to buy from hold. The company's strengths include revenue growth, expanding profit margins and a two-year pattern of EPS growth.
Its net income increased to $7.44 million in the second quarter of 2007, up from $7.29 million in the same quarter last year. Strengths such as these outweigh the fact that the company's stock has declined by 1.63% in the past 12 months. First Community Bancshares had been rated a hold since August 2005.
TheStreet.com Ratings has initiated coverage on open-ended mutual fund trust
Advantage Energy Income Fund
. It has been rated a sell. The company's stock has declined by 29.94% in the last 12 months, and on the basis of its current price in relation to the company's earnings, it is still more expensive than most of the other companies in its industry.
Its EPS declined to 4 cents a share in the second quarter of 2007 compared with 38 cents a share in the same period last year; it has not demonstrated a clear trend in earnings over the past two years. Despite having a low debt-to-equity ratio of 0.46, it is higher than that of the industry average, and its return on equity trails that of both the industry average and the
Additional ratings changes are listed below.