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.
has been upgraded to hold from sell. The company specializes in the transportation of dry bulk cargoes such as coal, iron ore and grains. The company's revenue increased 28.3% in the fourth quarter of fiscal 2006 compared with the same quarter a year earlier. That far exceeds the average rate of revenue growth throughout the marine industry during the same time period.
Earnings per share were up 34.2% over the past fiscal year, and the company's stock price has nearly doubled in the past 12 months. Dryships had been rated a sell since March 2006.
has been upgraded to a hold from a sell. The company makes lead acid batteries for transportation and industrial applications. Exide's net income jumped 59.4% in the third quarter of fiscal 2006 compared with the same quarter a year earlier. Stock performance has been solid, with investors pushing the price up 165.9% over the past 12 months. XIDE had been rated a sell since July 2005.
Thermal management product manufacturer
has been downgraded to hold from buy. The company's heating and cooling devices can be found in automobiles, buildings and electronics. The company's gross profit margin has fallen over the past fiscal year to just 21%. Net operating cash flow has also declined over that same time period. Modine had been rated a buy since January 2007.
Data integration software provider
has been downgraded to hold from buy. The company's return on equity is currently 16.2%, below the software industry average of 23.7%. Informatica's stock price has fallen 13% over the past year. In time, that decline could make the company an attractive investment opportunity. However, TheStreet.com Ratings believes it is too soon to make a purchase. INFA had been rated a buy since October 2006.
has been upgraded to hold from sell. The company develops products based on proprietary, extended-release and pulmonary drug-delivery technologies. Revenue has jumped 50.7% over the past fiscal year, and the company appears to have improved earnings per share. TheStreet.com Ratings believes the business is improving and expects further EPS growth in the coming year. Alkermes had been rated a sell since December 2006.
Additional ratings changes are listed in the table below.