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.
( ITWO) provides supply-chain management products to customers worldwide. It has been upgraded to hold from sell. The company improved its third-quarter earnings by 13.3% to 17 cents per share compared with 15 cents a share in the same period last year.
i2 has reported somewhat volatile earnings recently, but TheStreet.com Ratings believes it is poised for EPS growth in the coming year. i2's return on equity significantly exceeds that of both the industry average and the
. However, its debt-to-equity ratio is very high at 19.04 and higher than the industry average, implying that there is very poor management of debt levels within the company. i2 Technologies had been rated a sell since September 2007.
Lazare Kaplan International
( LKI) cuts, polishes and sells diamonds to wholesalers, distributors and retail jewelers. It has been upgraded to hold from sell. The company swung to a profit of $420,000 in the first quarter of its fiscal 2008, compared with a loss of $1.83 million in the same period last year.
However, its revenue fell by 26.1% during the same time frame, and its debt-to-equity ratio of 1.19 is relatively high compared with the industry average. This suggests a need for better debt level management. The company's stock price has increased 30.54% in the last three months, but there is no conclusive evidence that warrants the purchase or sale of this stock. Lazare Kaplan had been rated a sell since May 2007.
sells products used to store, manage, protect and archive company data. It has been upgraded to a buy from a hold. The company's revenue rose by 21.4% in the second quarter of its fiscal 2008 compared with the same period last year, exceeding the industry average of 4.3%.
Network Appliance's second-quarter earnings increased to 23 cents per share compared with 22 cents a share last year, continuing a pattern of positive EPS over the past two years. Its return on equity improved to 17.27% compared with the same quarter last year. This can be construed as a modest strength within the organization. Network Appliance had been rated a hold since August 2007.
Providing commercial and retail banking to businesses and individuals in California,
North Valley Bancorp
operates as the holding company for North Valley Bank. It has been downgraded to a hold from a buy. The company's third-quarter revenue growth increased by 1.8% compared with the same period last year, trailing the industry average of 18.7%. North Valley Bancorp also shows expanding profit margins.
However, the company's third-quarter earnings fell to 29 cents per share compared with 39 cents a share during the same period last year. Its share price has fallen by 11.73% in the last 12 months. TheStreet.com Ratings do not see anything in this company's numbers that would change the one-year trend.
offered to acquire North Valley Bancorp for $196 million; on Oct. 31, the buyout was delayed for the second time. The hold rating indicates the limited upside potential of the company's stock price in light of the proposed merger. North Valley Bancorp had been rated a buy since November 2005.
is a private-equity firm specializing in investment in middle-market companies. It has been downgraded to hold from buy. The company's third-quarter revenue increased 15.2% compared to the same period last year, although this trailed the industry average of 29.1%.
MCG Capital's debt-to-equity ratio of 0.76 is less than that of the industry average, implying that there has been a relatively successful effort in management of debt levels. The company's net income increased 4.1% to $23.02 million in the third quarter compared with the same period last year, although EPS declined by 11.9% over the same timeframe. It has reported somewhat volatile earnings recently, and TheStreet.com Ratings believes it is likely to report a decline on earnings in the coming year. MCG Capital had been rated a buy since November 2005.
Through its subsidiary, NLASCO,
is a property and casualty insurance company. It has been upgraded to a hold from a sell. The company's third-quarter earnings swung to a profit of 6 cents a share compared with a loss of 25 cents a share compared with the same period last year.
After a year of stock price fluctuations, Hilltop's stock price is up just 3.10% from a year ago. While its return on equity significantly trails that of both the industry average and the S&P 500, third-quarter ROE increased greatly compared with the same period last year. Hilltop had been rated a sell since November 2005.
( ITYC) is the holding company for Integrity Bank, which offers commercial banking services in Georgia. It has been downgraded to a sell from a hold. The company swung to a net loss of $31.92 million in the first quarter of fiscal 2008 from a profit of $2.78 million a year earlier. Integrity's stock price fell by 79.12% in the last 12 months.
Turning toward the future, the stock price drop could be one of the factors that may help make the stock attractive down the road. Right now, TheStreet.com Ratings believe it is too soon to buy. The company has not demonstrated a clear EPS trend over the past two years, making it difficult to predict earnings for the coming year. Integrity Bancshares had been rated a hold since January 2007.
TheStreet.com Ratings has initiated coverage of
Ultrapetrol (Bahamas) Limited
, a marine transportation company that operates through four segments: river business, offshore supply business, ocean business and passenger business. It has been rated a sell.
The company's revenue increased 24.8% in the third quarter compared with the same period last year, and its stock price has increased by 43.47% in the last 12 months. Ultrapetrol's return on equity significantly trails that of both the marine industry and the S&P 500. It swung to a loss of 16 cents per share in the third quarter from a gain of 28 cents a share in the same period last year. Its debt-to-equity ratio of 1.08 is relatively high when compared with the industry average, suggesting a need for better debt level management.