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Each weekday, 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.

Huntsman Corporation

(HUN) - Get Huntsman Corporation Report

manufactures and markets chemical products. It has been downgraded to a hold from a buy. In line with its strategic focus on high-margin and high-growth businesses, Huntsman recently sold its U.S.-based polymers and base chemicals businesses for about $770 million. This came in addition to its recent exit from the same business in Europe. These divestitures should help the company insulate itself against energy cost fluctuations.

Management has put the proceeds toward reducing its debt burden, which could benefit the bottom line. In July, Huntsman agreed to be acquired by Hexicon Specialty Chemicals for $28 per share. Since the market price has already approached the offer price, the deal, which is expected to be completed by April 2008, leaves very little upside. However, if the merger does not occur by this date, thereafter the cash offer price per share will increase by 8.0% per annum inclusive of any dividend paid. It had been rated a buy since August 2007.

Penn National Gaming

(PENN) - Get Penn National Gaming Inc. Report

owns and operates gaming and pari-mutuel properties. It has been downgraded to a hold from a buy. Its third-quarter revenue increased 7.4% compared with the same period last year, which appears to have trickled down to the company's bottom line, improving earnings per share. EPS increased to 52 cents per share from 47 cents a share during the same time frame.

However, Ratings anticipates underperformance relative to this pattern in the coming year. In addition, the company's net income has been generally deteriorating over time. Its stock price has increased by 62.8% in the last 12 months, and the hold rating indicates that additional investment in this stock is not advised at this time. Penn National Gaming had been rated a buy since November 2005.

Hewitt Associates

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( HEW) provides human resources outsourcing and consulting services. It has been downgraded to a hold from a buy. The company's stock price has jumped 45.93% in its fiscal fourth quarter compared with the same period last year, and its revenue increased by 5.6% over the same time frame. It has a reasonable debt level by most measures.

However, Hewitt's fourth-quarter net income swung to a loss of $265.64 million compared with a gain of $23 million in the same period in 2006. It also shows disappointing return on equity and poor profit margins. Hewitt Associates had been rated a buy since August 2007.


(RMD) - Get ResMed Inc. Report

makes and markets equipment used in the diagnosis and treatment of disordered breathing, such as sleep apnea. It has been upgraded to a buy from a hold. The company's revenue rose by 13.5% in the first quarter of its fiscal year compared with the same period last year. ResMed's debt-to-equity ratio of 0.12 is below that of the industry average, implying that there has been very successful management of debt levels.

In addition, its quick ratio of 2.43 demonstrates the company's ability to cover short-term liquidity needs. Its first-quarter earnings declined to 31 cents per share from 32 cents per share during the same period last year, and it has suffered a declining pattern of EPS over the past year. However, Ratings anticipates this trend reversing over the coming year. ResMed was downgraded to a hold on Nov. 6, but the recent rise in its stock price has merited its return to buy status.


(MSTR) - Get MicroStrategy Incorporated Report

sells MicroStrategy 8, an integrated business intelligence platform. It has been upgraded to a buy from a hold. The company's third-quarter revenue rose by 23.4% compared with the same period last year, and it has no debt to speak of. Its net income also increased 13.9% to $16.97 million in the third quarter compared with the same period last year.

MicroStrategy also shows good cash flow from operations and expanding profit margins. These strengths outweigh the fact that the company's stock price has dropped by 16.76% in the last 12 months. MicroStrategy had been rated a hold since August 2007.

Additional ratings changes are listed below.