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.
( CELL) distributes wireless devices and accessories, as well as customized logistic services to the wireless industry. It has been upgraded to a buy from a hold. The company's revenue grew 54.8% in the second quarter over the year-earlier period, dwarfing the industry average of 1.2%; net income grew 114.6% to $17.69 million from $8.24 million over the same period. Brightpoint also has a largely solid financial position with reasonable debt levels by most measures. Those strengths outweigh the company's low profit margins. Brightpoint had been rated a hold since July 2006.
Business intelligence and performance management software provider
( COGN) has been upgraded to a buy from a hold. The company shows compelling growth in net income, and has no debt to speak of, a relatively favorable sign. The stock price has increased 18.25% over the past year, reflecting both the market's overall trend during that period and the company's robust EPS growth.
While even the best stocks can fall in an overall down market, in any other environment, Cognos' stock still has good upside potential. Strengths like these outweigh the company's weak operating cash flow. Cognos had been rated a hold since June 2007.
engages in the acquisition, exploration, development and operation of precious metal properties in the Americas and Australia. It has been upgraded to a buy from a hold. The company has a largely solid financial position with reasonable debt levels, by most measures, expanding profit margins. and revenue that rose 15.4% in the second quarter over the year-earlier period. However, net income fell by 98.5%, to $2.90 million over the same period. The company has not demonstrated a clear trend in EPS over the past two years, making it difficult to accurately predict earnings for the coming year.
Goldcorp's stock has risen 32.72% over the past year. While it is now somewhat expensive compared with the rest of its industry, its other strengths justify the higher price levels. Goldcorp had been downgraded to a hold on Aug. 29, but its stock price dipped as low as $22.44 after the release of disappointing second- quarter earnings, allowing it to recover the buy rating it had held since September 2005.
is a Canadian telecommunications company that operates through two segments: wireline and wireless. It has been upgraded to a buy from a hold. The company's revenue increased by 4.3% in the second quarter compared with the same period last year, and its net operating cash flow increased 30.61% to $1.06 billion in the same time frame.
Its debt-to-equity ratio of 0.73 is less than that of the industry average, implying that there has been relatively successful management of debt levels. Telus' profit margins also are expanding, and its return on equity is notable. These strengths outweigh the lackluster performance of the company's stock, which has declined 1.91% over the last 12 months.
Telus had been rated a hold since Aug. 8, 2007, prior to which it had been rated a buy since September 2005. Telus regained the buy rating based primarily on the growth of both its income and cash flow, which returned to a level better than 90% of the stock rated by TheStreet.com Ratings.
Smart Modular Technologies
( SMOD) supplies value-added subsystems to original equipment manufacturers. It has been downgraded to a sell from a hold. Net operating cash flow decreased 20.14% to $10.74 million in the third quarter, compared with the same period last year, and revenue declined by 1.1% in the same timeframe.
The company's stock price has dipped 26.88% in the past 12 months, as investors have not paid much attention to the earnings improvements the company has achieved over the last quarter -- to 22 cents per share in the third quarter of this year compared with 10 cents per share in the same period last year.) The company's debt-to-equity ratio of 0.41, while low, is nevertheless higher than the industry average. Smart Modular Technologies had been rated a hold since TheStreet.com Ratings initiated coverage of the company in March 2007.
Additional ratings changes are listed below.