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 forecasted company earnings. Objective elements include volatility of past operating revenue, financial strength and company cash flows.
Some recent rating changes are highlighted below.
Advanced Micro Devices
has been downgraded to a sell from a hold. The company lost $1.08 in the fourth quarter of fiscal 2006 after gaining 21 cents the same quarter a year earlier. Return on equity has also declined, which TheStreet.com Ratings feels is a sign of significant weakness within AMD. Advanced Micro Devices had been rated a hold since August 2006.
Russian telephone company
( ROS) has been upgraded to a buy from a hold. The company's revenue grew 58.5% in the third quarter of fiscal 2006 compared with the same quarter a year ago. TheStreet.com Ratings feels Rostelekom has been successful at managing its debt and is well-prepared to cover short-term liquidity needs. With the market expecting an improvement in earnings per share going forward, the company's stock price should continue to move higher. Rostelekom had been rated a hold since March 2007.
( JTX) has been downgraded to a hold from a buy. Although the company's return on equity improved slightly, reaching 20.7% in the third quarter of fiscal 2006, it still trails behind the industry average. The performance of Jackson Hewitt's stock has been disappointing, declining nearly 23% in the past three months. JTX had been rated a buy since March 2007.
has been upgraded to a hold from a sell. The company makes blast-protected vehicles that have been used to support U.S. military forces in Iraq, Afghanistan and other locations around the globe. Force Protection's revenues jumped 287.3% in the fourth quarter of fiscal 2006 compared with the same quarter a year earlier.
This growth appears to have trickled down to the bottom line. The company earned 32 cents per share in this latest quarter after losing 23 cents per share in the third quarter of fiscal 2005. FRPT had been rated a sell since January 2007.
Corporate consulting firm
Diamond Management and Technology
( DTPI) has been downgraded to a hold from a buy. The company's return on equity fell to just 5.36% in the third quarter of fiscal 2006. TheStreet.com Ratings feels gross profit margins are lower than what is desirable at 31.4%. Diamond's stock price has already risen 12.2% in the past year, which seems to leave little room for future upside potential. DTPI had been rated a buy since October 2006.
Clinical research firm
( KNDL) has been downgraded to a hold from a buy. The company's net income and earnings per share have decreased significantly over the past fiscal year. Return on equity has fallen to just 6.1%. Kendle had been rated a buy since December 2005.
has been downgraded to a hold from a buy. The company operates bank branches throughout New Jersey. Lakeland's net income fell 58.9% in the fourth quarter of fiscal 2006 compared with the same quarter a year ago. The company's stock price declined 14.1% over the past three months. LBAI had been rated a buy since July 2005.