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 Sept. 12.

Alkermes

(ALKS) - Get Report

has been downgraded to hold from buy. Alkermes, a biotechnology company, develops, and manufactures extended-release injectable, pulmonary, and oral products for the treatment of prevalent, chronic diseases, such as central nervous system disorders, addiction and diabetes. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, notable return on equity and reasonable valuation levels. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

The net income growth from the same quarter one year ago has significantly exceeded that of the

S&P 500

and the biotechnology industry. Net income increased by 239.4% from the same quarter one year prior, rising from $8.75 million to $29.69 million.

The company's current return on equity greatly increased when compared to its return on equity from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared with other companies in the biotechnology industry and the overall market, ALKS's return on equity significantly exceeds that of both the industry average and the S&P 500.

Despite currently having a low debt-to-equity ratio of 0.45, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 10.24 is very high and demonstrates very strong liquidity.

ALKM's reported significant earnings per share improvement in the most-recent quarter compared with the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, ALKS has increased its bottom line by earning $1.59 vs. 9 cents in the prior year. For the next year, the market is expecting a contraction of 84.3% in earnings (25 cents vs. $1.59).

ALKS is off 19.47% from its price level of one year ago, reflecting the general market trend and ignoring their higher earnings per share compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.

ALKS had been rated a buy since Aug. 20, 2008.

BP

(BP) - Get Report

has been downgraded from a buy to hold. BP provides fuel for transportation, energy for heat and light, retail services, and petrochemicals products. It operates in two segments, exploration and production, and refining and marketing. The company's strengths can be seen in multiple areas, such as its robust revenue growth, compelling growth in net income and attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including poor profit margins anda generally disappointing performance in the stock itself.

BP's very impressive revenue growth exceeded the industry average of 30.2%. Since the same quarter one year prior, revenues rose by 51.3%. Growth in the company's revenue appears to have helped boost the earnings per share.

Net operating cash flow has increased to $6,718.00 million or 10.38% when compared with the same quarter last year. Despite an increase in cash flow, BP's cash flow growth rate is still lower than the industry average growth rate of 22.75%.

BP has underperformed the S&P 500 Index, declining 22.79% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.

The gross profit margin for BP is rather low; currently it is at 20.10%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 8.70% trails that of the industry average.

BP had been rated a buy since Sept. 11, 2006.

TAL International Group

(TAL) - Get Report

has been downgraded from buy to hold. TAL International Group engages in the acquisition, leasing, re-leasing, and sale of intermodal equipment and chassis. The company's strengths can be seen in multiple areas, such as its increase in net income, robust revenue growth and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including generally poor debt management, disappointing return on equity and a decline in the stock price during the past year.

The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the trading companies and distributors industry. The net income increased by 94.2% when compared with the same quarter one year prior, rising from $20.76 million to $40.32 million.

TAL's revenue growth trails the industry average of 36.3%. Since the same quarter one year prior, revenue rose by 21.7%. Growth in the company's revenue appears to have helped boost the earnings per share.

Net operating cash flow has increased to $55.95 million or 48.05% when compared to the same quarter last year. Despite an increase in cash flow of 48.05%, TAL is still growing at a significantly lower rate than the industry average of 2865.97%.

The debt-to-equity ratio is very high at 3.16 and currently higher than the industry average, implying that there is very poor management of debt levels within the company.

The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared with other companies in the trading companies & distributors industry and the overall market, TAL's return on equity is below that of both the industry average and the S&P 500.

TAL had been rated a buy since Aug. 7, 2008.

Terex

(TEX) - Get Report

has been downgraded from buy to hold. Terex manufactures capital equipment for construction, infrastructure, quarrying, mining, shipping, transportation, refining and utility industries worldwide. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and poor profit margins.

TEX's revenue growth has slightly outpaced the industry average of 15.4%. Since the same quarter one year prior, revenue rose by 25.3%. Growth in the company's revenue appears to have helped boost the earnings per share.

TEX has improved earnings per share by 39.8% in the most-recent quarter compared with the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, TEX has increased its bottom line by earning $5.87 vs. $3.84 in the prior year. This year, the market expects an improvement in earnings ($6.50 vs. $5.87).

The current debt-to-equity ratio, 0.51, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.83 is somewhat weak and could be cause for future problems.

The gross profit margin for TEX is rather low; currently it is at 22.80%. Regardless of TEX's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 8.00% trails the industry average.

TEX's stock share price has done very poorly compared with where it was a year ago: Despite any rallies, the net result is that it is down by 53.08%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.

TEX had been rated a buy since Sept. 11, 2006.

MEMC Electronic Materials

(WFR)

has been downgraded from buy to hold. MEMC Electronic Materials designs, manufactures, and sells silicon wafers for the semiconductor industry worldwide. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and growth in earnings per share. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

WFR's revenue growth has slightly outpaced the industry average of 11.7%. Since the same quarter one year prior, revenue rose by 12.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.

WFR's debt-to-equity ratio is very low at 0.01 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 3.59, which clearly demonstrates the ability to cover short-term cash needs.

Net operating cash flow has slightly increased to $205.00 million or 3.74% when compared with the same quarter last year. Despite an increase in cash flow, WFR's cash flow growth rate is still lower than the industry average growth rate of 15.10%.

The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared with other companies in the semiconductors & semiconductor equipment industry and the overall market, WFR's return on equity significantly exceeds that of both the industry average and the S&P 500.

WFR's stock share price has done very poorly compared with where it was a year ago: Despite any rallies, the net result is that it is down by 46.09%, which is also worse that the performance of the S&P 500 index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.

WFR had been rated a buy since Sept. 11, 2006.

Additional ratings changes from Sept. 12 are listed below.

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