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.
( GNA) operates as a minimill steel producer in North America. It has been upgraded to a buy from a hold. The company's revenue grew by 10.4% in the second quarter compared with the same period last year, and its debt-to-equity ratio of 0.22 is below that of the industry average, implying that there has been very successful management of debt levels.
Gerdau's stock price has risen by 23.33% over the last 12 months, outpacing the rate of the
. While it goes without saying that even the best stocks can fall in an overall down market, in any other environment, this stock still has good upside potential. Gerdau had been rated a hold since September 2007.
engages in the development and commercialization of a portfolio of targeted treatments for cancer patients. It has been upgraded to a buy from a hold. The company's stock price has improved by 50.81% in the past 12 months and should continue to move higher. Net operating cash flow increased by 193.32% to $27.34 million when compared with the same period last year. ImClone also displays reasonable valuation levels and a largely solid financial position with reasonable debt levels by most measures. These strengths outweigh the company's subpar growth in net income. ImClone had been rated a hold since July 2007.
Through its subsidiaries,
distributes electrical supplies and equipment. It has been downgraded to a hold from a buy. The company's revenue rose by 13.6% in the second quarter compared with the same period last year, outpacing the industry average of 10.8%. Bolstered by revenue growth, earnings increased by 16.2% in the same timeframe, continuing a two-year pattern of positive EPS growth. TheStreet.com Ratings believes this trend will continue.
However, Wesco's stock has fallen by 34.01% in the last 12 months, as investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Although the share price is down sharply from a year ago, it is not appropriate to assume that the stock can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to earnings, Wesco is still more expensive than most of the other companies in its industry. It had been rated a buy since February 2006.
designs, manufactures and markets analog and mixed-signal integrated circuits and semiconductors. It has been upgraded to a buy from a hold. The company's revenue increased 13.3% to $113.55 million in the third quarter over the year-earlier period, driven by increased sales across end-markets. Over the same timeframe, net income increased to $8.71 million from $120,000, supported by revenue growth and lower taxes. Also, the year-earlier figure reflected a charge related to research and development.
Demand for Microsemi's analog and mixed-signal integrated circuits should remain strong, given their performance advantages and innovative designs. In addition, the company recently introduced a new line of standard power modules for solar inverters, as well as other new products that are also promising. However, any slowdown in the end-markets for Microsemi's products or any reduction in global defense budgets may adversely affect the company's business. There's also a risk that the company's new products will not gain market acceptance. Microsemi had been rated a hold since April 2007.
, through its subsidiaries, engages in the development and acquisition of gas and oil properties in the U.S. It has been upgraded to a hold from a sell. The company's revenue grew by 20.8% in the second quarter compared with the same period last year, exceeding the industry average of 2.6%. Its gross profit margin is also rather high, at 53.90%, although it has decreased since the second quarter of last year.
Linn Energy has reported somewhat volatile earnings recently, and posted a loss of 29 cents per share in the second quarter of 2007 compared with profits of 36 cents per share in the same period last year. It is likely to report a decline in earnings in the coming year. It had been rated a sell since TheStreet.com Ratings initiated its coverage in February 2007.
Additional ratings changes are listed below.