Each business day, 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.
General Growth Properties
is a real estate investment trust. It has been downgraded to a sell from a hold. The company's net losses widened to $9.4 million in the third quarter from $8.2 million in the same period last year, and its debt-to-equity ratio of 15.95 is currently higher than the industry average, implying that there is very poor management of debt levels. The company's stock price is down 14.63% in the last 12 months. Its decline might be one of the factors that may help make the stock attractive down the road, but right now, TheStreet.com Ratings believe it is too soon to buy. General Growth Properties had been rated a hold since February 2007.
sells silicon-to-system products that create and store digital information. It has been downgraded to a sell from a hold. The company swung to a loss of $140.6 million in the third quarter compared with a profit of $43.61 million in the same period last year, and its return on equity greatly decreased over the same period. This is a sign of major weakness within the corporation. LSI's stock price has fallen by 40% in the last 12 months, and while this has made it cheaper (in proportion to its earnings over the last year) than most other stocks in its industry, the stock is still not a good buy right now. LSI Corp. had been rated a hold since April 2007.
is an automotive retailer. It has been downgraded to a hold from a buy. The company has reported somewhat volatile earnings recently, and third-quarter EPS increased 6.1% to 70 cents a share from 66 cents a share in the same period last year. It also saw its revenue grow by 5.7% in the third quarter compared with the same period last year. Sonic's debt-to-equity ratio of 1.87 is high overall and when compared with the industry average, suggesting that the current management of debt levels should be re-evaluated. In addition, the company maintains a quick ratio of 0.24, which demonstrates an inability to cover short-term cash needs. Sonic had been rated a buy since October 2007.
Tim Hortons, Inc.
operates and franchises quick-service restaurants. It has been upgraded to a hold from a sell. The company's return on equity of 27% in the third quarter significantly exceeds that of both the industry average and
. Its third-quarter revenue growth of 19% over last year outpaced the industry average of 0.8%. In addition, its stock price has gone up by 30% in the last 12 months. However, the company's profit margins have been poor overall. Tim Hortons, Inc. had been rated a sell since coverage was initiated in August 2007.
manufactures and markets point-of-care diagnostic solutions for infectious diseases and reproductive health. It has been upgraded to a buy from a hold. The company's third-quarter revenue rose 16.2% on the year, outpacing the industry average of 2.9%. Quidel's debt-to-equity ratio is very low at 0.08 and is below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 3.79, which clearly demonstrates the ability to cover short-term cash needs. The company has also shown solid stock price performance and good cash flow from operations. Although no company is perfect, currently TheStreet.com Ratings do not see any significant weaknesses that are likely to detract from the generally positive outlook. Quidel had been rated a hold since August 2007.
Additional ratings changes are listed below.
This article was written by a staff member of TheStreet.com Ratings.