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.

However, the rating does not incorporate all of the factors that can alter a stock's performance. For example, it doesn't always factor in recent corporate or industry events that could impact the stock price, nor does it include recent technology developments and competitive dynamics that may affect the company.

For those reasons, we believe a rating alone cannot tell the whole story, and should be part of an investor's overall research.

Vornado Realty Trust

(VNO) - Get Report

is a real estate investment trust that owns a variety of office and retail properties. It has been downgraded to a hold from a buy. Our downgrade is primarily based on the weakening outlook in the commercial REIT sector and growing concern over the

Toys "R" Us


Vornado has a 32.7% stake in the toy retailer, which is operating in a difficult environment for traditional toys amid slumping consumer spending that appears unlikely to improve in the near future. The company recorded 21.6% revenue growth year over year in its top line during the third quarter to $915.67 million. This, partly offset by margin contraction and a higher interest expense, led to a 2.2% growth in net income to $130.84 million over the same timeframe. Vornado had been rated a buy since January 2006.

Constellation Brands

(STZ) - Get Report

produces and markets wine, spirits and imported beer. It has been downgraded to a hold from a buy. The company's third-quarter net income rose by 10.9% to $119.6 million, or 49 cents a share, from $107.8 million, or 45 cents per share, in the same period last year. Constellation also demonstrates attractive valuation levels and good cash flow from operations.

The company's debt-to-equity ratio is relatively high when compared with the industry average, suggesting the need for better debt level management. In addition, its quick ratio of 0.60 shows a lack of ability to cover short-term liquidity needs.

Constellation Brands' current return on equity has slightly decreased from the third quarter one year ago, which implies a minor weakness in the organization. Its return on equity is significantly below that of the industry average and that of the

S&P 500

. Constellation Brands had been rated a buy since October 2007.

Rockwood Holdings


develops, manufactures and markets specialty chemicals and advanced materials for industrial and commercial purposes worldwide. It has been downgraded to a hold from a buy.

The company's third-quarter revenue rose by 12.1% compared with the same period last year, which was in line with the industry average of 12.8%. Rockwood's net income increased 15.4% to $24.7 million, or 32 cents a share, over the same period. The company's return on equity has improved slightly when compared with the third quarter of last year, which can be construed as a modest strength in the organization.

However, its debt-to-equity ratio of 1.79 is high overall and when compared with the industry average, suggesting that its debt management needs to be re-evaluated. Along with the unfavorable debt-to-equity ratio, Rockwood maintains a quick ratio of 0.93, which illustrates the inability to avoid short-term cash problems. It had been rated a buy since August 2007.

Tech Data

(TECD) - Get Report

sells information technology and logistics management products worldwide. It has been downgraded to a hold from a sell. The company's third-quarter revenue rose by 9.1%, outpacing the industry average of 6.1%. Its debt-to-equity ratio of 0.22 is very low and beneath that of the industry average, implying that there has been very successful management of debt levels.

In addition, its quick ratio of 1.03 illustrates the ability to avoid short-term cash problems. Tech Data's earnings rose to 73 cents a share in the third quarter from 18 cents per share in the same period last year.

However, the company's weaknesses include poor profit margins and a stock price that has dropped by 11.46% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time. Tech Data had been rated a buy since Dec. 5, prior to which it had been rated a hold since May 2006.

VeriFone Holdings


designs, markets and services electronic payment transmission systems between consumers, merchants and financial institutions. It has been downgraded to a sell from a hold.

The company's stock price has fallen by 53.01% in the last 12 months, and consistent with the plunge in the stock price, its third-quarter earnings fell 33.3% to 16 cents a share from 24 cents per share in the same period last year.

Although its share price is down sharply from a year ago, do not assume that it can be tagged as cheap and attractive. Based on its current price in relation to its earnings, VeriFone is still more expensive than most of the other companies in its industry. The company also demonstrates deteriorating net income and disappointing return on equity. VeriFone had been rated hold since January 2007.

Additional ratings changes are listed below.

This article was written by a staff member of TheStreet.com Ratings.