Each weekday, TheStreet.com Ratings updates its ratings on the stocks we cover. Our model projects a stock's total return potential over a 12-month period, including both price appreciation and dividends. Our buy, hold and sell ratings designate how we expect these stocks to perform against a general benchmark of the equities market and interest rates.
While our model is quantitative, it utilizes both subjective and objective elements. For instance, subjective elements include expected equities market returns, future interest rates, implied industry outlook and forecasted company earnings. Objective elements include volatility of past operating revenue, financial strength and company cash flows.
Starting today, we are highlighting some recent ratings changes.
( SMBI), which owns and operates surgery centers throughout the U.S., has been upgraded to buy from hold. TheStreet.com Ratings feels that the company's strong revenue growth and largely solid financial position outweigh the lackluster performance of its stock. Symbion's revenue growth didn't trickle down to the bottom line in the fourth quarter of 2006, when EPS fell by 19%. However, we feel the company is poised for EPS growth in the coming year. Symbion had been rated a hold since September 2006.
Long-term care provider
has been upgraded to buy from hold. The company's strengths include its solid stock price performance, revenue growth, largely solid financial position and attractive valuation. TheStreet.com Ratings feels that these strengths outweigh the fact that revenue growth hasn't trickled down to the bottom line. Kindred's EPS growth declined in the fourth quarter of 2006. The company had been rated a hold since November 2006.
, a company that owns auto dealerships and collision repair centers in 15 U.S. states, has been upgraded to buy from hold. The company's strengths include its solid stock price performance and increase in net income. TheStreet.com Ratings feels that these factors outweigh the company's generally poor debt management. Sonic had been rated a hold since April 2006.
Medical device manufacturer
now gets a buy rating, up from a hold. Sonosite's revenue is growing and margins are expanding, resulting in continual increases in earnings per share, and its financial position is largely solid. TheStreet.com Ratings feels these factors outweigh the fact that the performance of the company's stock price has been lackluster. The company had been rated a hold since April 2006.
Oil and gas driller
has been downgraded to a sell from a hold. The company's weaknesses include its deteriorating net income, generally weak debt management, disappointing return on equity and the generally disappointing historical performance, and its EPS swung to a loss in the fourth quarter. Stone Energy had been rated a hold since August 2006.
Additional ratings changes are listed below.