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 affect 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 that it should be part of an investor's overall research.

The following ratings changes were generated on March 18.

AVX Corp.

(AVX) - Get Report

, which makes passive electronic components and related products, has been downgraded to hold. Strengths such as revenue growth, a solid financial position and a reasonable valuation are countered by weak operating cash flow, poor profit margins and a disappointing stock-price performance. For the third quarter of 2007, revenue rose 14% year over year to $429.5 million, and earnings per share increased to 22 cents from 21 cents. The company's debt-to-equity ratio is zero and, with a quick ratio of 4.25, it can clearly cover short-term cash needs. Return on equity has improved slightly year over year to 8.9%. AVX Corp's gross profit margin is rather low at 21%, but its net profit margin of 8.6% exceeds the industry average. Net operating cash flow has decreased 38% to $48 million from the year-ago quarter. In addition, when comparing to the industry average, the firm's growth rate is much lower. AVX Corp. had been rated buy since Sept. 15, 2006.

Carnival Corp.

(CCL) - Get Report

, a cruise and vacation company, has been downgraded to hold. Strengths such as revenue growth, a reasonable valuation and good cash flow from operations are weighed down by unimpressive growth in net income, disappointing return on equity and a declining stock price. For the fourth quarter, revenue rose 11% to $3.12 billion, while earnings per share decreased to 44 cents from 51 cents. At 0.44, the company's debt-to-equity ratio is below the industry average, implying that there has been successful management of debt levels. However, its quick ratio of 0.19 is very weak and demonstrates a lack of ability to pay short-term obligations. Return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Carnival Corp. had been rated buy since March 20, 2007.

Sierra Pacific Resources

( SRP), an energy company, has been downgraded to hold. Strong revenue growth, a reasonable valuation and good cash flow from operations are countered by deteriorating net income, poor debt management and disappointing return on equity. For the fourth quarter, revenue increased 5.6% year over year to $786.6 million, while EPS declined to 2 cents from 12 cents. The company's debt-to-equity ratio of 1.42 exceeds the industry average, suggesting a need for better debt level management, and its quick ratio of 0.78 is poor. Return on equity has slightly decreased year over year to 6.6%. This implies a minor weakness in the organization. Sierra Pacific Resources had been rated buy since Aug. 9, 2006.

Wipro

(WIT) - Get Report

, which provides information technology services and products, including business process outsourcing, has been downgraded to hold. Robust revenue growth, a solid financial position and impressive EPS growth are balanced by a disappointing stock-price performance, weak operating cash flow and poor profit margins. For the third quarter of 2007, revenue increased 41% year over year to $1.36 billion, and earnings per share increased by a penny to 15 cents. The company's debt-to-equity ratio is very low at 0.23 implying very successful management of debt levels. Net operating cash flow has decreased 30% to $129.2 million from the year-ago quarter.

Shares are down 35%, in the past year, netting the stock a P/E of 18.05. Despite the decline in price, the stock is not much cheaper than others in its sector. Wipro had been rated buy since Oct. 10.

Belo Corp.

(BLC)

, a television broadcasting, cable news, newspaper and interactive media business, has been downgraded to sell. For the fourth quarter, revenue decreased 6.9% to $406.7 million, and EPS swung to a loss of $3.26 from a profit of 50 cents.For 2008, the market expects an improvement in full-year EPS to a profit $1.04 from a loss of $2.58 for 2007. Return on equity has fallen to -21% from 8.6% a year ago. The company's gross profit margin is rather low at 25%, and its net loss margin 82% is significantly below the industry average.

Shares have fallen 44% in the past year. In one sense, the decline is a positive for future investors, making the stock cheaper others in its industry. But due to other concerns, we feel Belo Corp. is not a good buy right now. The stock had been rated hold since April 12, 2006.

Additional ratings changes from March 18 are listed below.

Ticker

Company Name

Change

New Rating

Former Rating

APOG

APOGEE ENTERPRISES INC

Downgrade

Hold

Buy

AVX

AVX CORP

Downgrade

Hold

Buy

BLC

BELO CORP

Downgrade

Sell

Hold

CCL

CARNIVAL CORP/PLC (USA)

Downgrade

Hold

Buy

INMD

INTEGRAMED AMERICA INC

Upgrade

Buy

Hold

MSL

MIDSOUTH BANCORP INC

Downgrade

Hold

Buy

CHUX

O'CHARLEY'S INC

Downgrade

Sell

Hold

QADI

QAD INC

Upgrade

Buy

Hold

SRP

SIERRA PACIFIC RESOURCES

Downgrade

Hold

Buy

TGA

TRANSGLOBE ENERGY CORP

Downgrade

Hold

Buy

TRIB

TRINITY BIOTECH PLC

Downgrade

Sell

Hold

VIRC

VIRCO MFG. CORP

Downgrade

Hold

Buy

WIT

WIPRO LTD

Downgrade

Hold

Buy

GPRO

GEN-PROBE INC

Downgrade

Hold

Buy

IFON

INFOSONICS CORP

Downgrade

Sell

Hold

BDE

BOIS D ARC ENERGY INC

Downgrade

Hold

Buy

CROX

CROCS INC

Downgrade

Sell

Hold

SMBL

SMART BALANCE INC

Downgrade

Sell

Hold

SMOD

SMART MODULAR TECHNOLOGIES

Downgrade

Sell

Hold

BWTR

BASIN WATER INC

Upgrade

Hold

Sell

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