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.
has been downgraded to a hold from a buy. The company's profits increased 65.6% in the third quarter of fiscal 2007 compared to the same quarter a year ago, thanks to sales of the company's latest operating system software Vista.
However, a jump in operating income due to higher revenue has been partially offset by increased headcount-related costs and advertising and marketing expenses associated with new product launches. Revenue from the entertainment and devices segment went down 21.4% over the past fiscal year because of decreased Xbox 360 sales. Microsoft had been rated a buy since September 2006.
Memory card maker
has been boosted to a buy from a hold. The company's revenue has grown 26.1% over the past fiscal year. Net operating cash flow reached $255.3 million in the first quarter of fiscal 2007, a 386.7% jump from the same quarter a year ago. The company's debt-to-equity ratio is below the computers and peripherals industry average. SanDisk had been rated a hold since January 2007.
has been upgraded to a buy from a hold. The company's stock price has increased 17.1% in the past year. TheStreet.com Rating's feels Bristol-Myers Squibb's current 68.9% gross profit margin is rather high. Although earnings per share have been declining over the past fiscal year, analysts are looking for an increase in the future. The company has been rated a hold since October 2006.
Fast food chain
has been upgraded to a hold from a sell. The company earned 15 cents per share in the first quarter of fiscal 2007, after losing 5 cents per share in the same quarter a year ago. TheStreet.com Ratings feels Wendy's is poised for further earnings growth in the coming year. Wendy's had been rated a sell since March 2007.
has been downgraded to a sell from a hold. The company makes electronic stun devices. Taser has reported a decline in earnings per share over the past fiscal year. The stock price has tumbled 27.1% in 12 months. The company has a negative return on equity that is well below the industry average. Taser had been rated a hold since October 2006.
Additional ratings changes are listed in the table below.