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 August 28.

BancorpSouth

(BXS) - Get Report

has been upgraded from hold to buy. BancorpSouth operates as a financial holding company for BancorpSouth Bank that provides commercial banking and financial services to individuals, and small and medium sized businesses in Mississippi, Tennessee, Alabama, Arkansas, Texas, Louisiana, Florida and Missouri. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income, expanding profit margins, good cash flow from operations and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

BXS has improved earnings per share by 13.9% 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. During the past fiscal year, BXS increased its bottom line by earning $1.68 vs. $1.57 in the prior year. This year, the market expects an improvement in earnings ($1.78 vs. $1.68).

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

S&P 500

and the commercial banks industry. The net income increased by 11.8% when compared with the same quarter one year prior, going from $35.88 million to $40.13 million.

The gross profit margin for BXS is rather high; currently it is at 69.00%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 16.10% is above that of the industry average.

Net operating cash flow has significantly increased by 725.32% to $48.74 million when compared with the same quarter last year. Despite an increase in cash flow of 725.32%, BXS is still growing at a significantly lower rate than the industry average of 2651.99%.

The return on equity has improved slightly when compared with the same quarter one year prior. This can be construed as a modest strength in the organization. Compared with other companies in the commercial banks industry and the overall market on the basis of return on equity, BXS has outperformed in comparison with the industry average but has underperformed when compared with that of the S&P 500.

BXS had been rated a hold since July 1, 2008.

MPS Group

( MPS) was upgraded from a hold to buy. MPS Group provides staffing, consulting and business solutions to various industries in theU.S., the U.K., Canada, continental Europe, Australia and Asia. The company operates in two divisions: professional services and information technology (IT) services. 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, attractive valuation levels, good cash flow from operations and growth in earnings per share. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

MPS's revenue growth has slightly outpaced the industry average of 0.4%. Since the same quarter one year prior, revenue rose by 10.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.

MPS's debt-to-equity ratio is very low at 0.03 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, MPS has a quick ratio of 2.15, which demonstrates the ability of the company to cover short-term liquidity needs.

Net operating cash flow has increased to $34.32 million or 23.55% when compared with the same quarter last year. In addition, MPS has also modestly surpassed the industry average cash flow growth rate of 19.28%.

MPS's earnings per share improvement from the most-recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, MPS increased its bottom line by earning 86 cents vs. 72 cents in the prior year. This year, the market expects an improvement in earnings (89 cents vs. 86 cents).

MPS had been rated a hold since July 22, 2008.

BioScrip

(BIOS) - Get Report

was upgraded from sell to hold. BioScrip, a specialty pharmaceutical healthcare organization, provides medications and management solutions for chronic and other healthcare conditions in the U.S. It operates through two segments: specialty services and PBM services. 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 impressive record of earnings per share growth. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and poor profit margins.

The revenue growth came in higher than the industry average of 3.3%. Since the same quarter one year prior, revenue rose by 18.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.

BIOS's debt-to-equity ratio is very low at 0.12 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.11, which illustrates the ability to avoid short-term cash problems.

The gross profit margin for BIOS is currently extremely low, coming in at 10.60%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 0.50% trails that of the industry average.

BIOS'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 29.85%, 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. Despite the heavy decline in its share price, this stock is still more expensive (when compared with its current earnings) than most other companies in its industry.

BIOS had been rated a sell since June 19, 2008.

Brooks Automation

(BRKS) - Get Report

was downgraded from hold to sell. Brooks Automation supplies a range of technology products and solutions to the semiconductor market. The company operates in three segments: automation systems group, critical components group and global customer support group. The downgrade is based on the company's shrinking revenue, deteriorating margins and reduced bottom-line. Additionally, the company reported adecline in shareholders' equity and negative returns on assets and equity. However, increasing revenue from the global customer support segment and any improvement in the semiconductor manufacturing equipment market may be the upsides to the sell rating.

Brooks Automation's third quarter fiscal year 2008 revenue slipped 34.9% to $124.02 million from $190.46 million, due to weak demand for its products and services from the large original equipment manufacturers. Segment-wise, revenue from the automation systems segment decreased 46.1% to $58.87 million, while revenue from critical components dropped 42.4% to $28.34 million.

Brooks' gross profit margin declined 399 basis points to 30.39% from 34.38%, hurt by an unfavorable product mix and declining revenue. Similarly, operating margin deteriorated to- 6.81% from a positive 7.72% a year ago. Subsequently, the company swung to net loss of $10.33 million or 17 cents per share from net profit of $22.84 million or 30 cents per share in the third quarter of fiscal year 2007.

During the third quarter of fiscal year 2008, the company's cash position dwindled as reflected by a 60.0% decline in cash and cash equivalents to $144.20 million. Furthermore, both return on assets and equity slipped into the negative territory standing at -2.40% and -2.84% compared with 15.14% and 6.88%, respectively. Moreover, shareholders' equity dipped 20.9% to $763.75 million from $965.57 million in the prior-year's quarter.

Although the company reported lower revenue and swung to net loss, it remained debt free during the quarter and revenue from the global customer support segment advanced 15.2% to$36.80 million. Furthermore, any improvement in the semiconductor manufacturing equipment market may boost the company's financial performance in the upcoming quarters.

BRKS had been rated a hold since November 6, 2007.

BlackRock Kelso

(BKCC) - Get Report

was initiated at sell. BlackRock Kelso is a privateequity firm specializing in investments in middle market companies. The firm invests in all industries. The rating is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared with most of the stocks we cover. The area that we feel has been the company's primary weakness has been its feeble growth in its earnings per share.

The change in net income from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared with the capital markets industry average. The net income has decreased by 6.0% when compared with the same quarter one year ago, dropping from $12.62 million to $11.86 million.

BKCC's earnings per share declined by 12.0% in the most-recent quarter compared with the same quarter a year ago. This year, the market expects an improvement in earnings ($1.62vs. -1 cent).

Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, BKCC has underperformed the S&P 500 Index, declining 20.74% from its price level of one year ago.

Compared with other companies in the capital markets industry and the overall market, BKCC's return on equity significantly trails that of both the industry average and the S&P 500.

The gross profit margin for BKCC is currently very high, coming in at 79.50%. It has increased significantly from the same period last year. Along with this, the net profit margin of 34.00% significantly outperformed against the industry average.

Additional ratings changes from August 28 are listed below.

Ticker

Company Name

Change

New Rating

Former Rating

AMAC

American Medical Alert Corp

Upgrade

Buy

Hold

AVCA

Advocat Inc.

Downgrade

Hold

Buy

BIOS

Bioscrip Inc.

Upgrade

Hold

Sell

BKCC

BlackRock Kelso Capital Corp

Initiated

Sell

BRKS

Brooks Automation Inc.

Downgrade

Sell

Hold

BXS

BancorpSouth Inc.

Upgrade

Buy

Hold

DRAM

Dataram Corp

Downgrade

Sell

Hold

FOOD

Vaughan Foods Inc.

Initiated

Sell

MGPI

MGP Ingredients Inc.

Downgrade

Sell

Hold

MPS

MPS Group Inc.

Upgrade

Buy

Hold

PAAS

Pan American Silver Corp

Downgrade

Hold

Buy

PNRG

PrimeEnergy Corp

Upgrade

Buy

Hold

PRX

Par Pharmaceutical Companies

Downgrade

Sell

Hold

RUS

Russ Berrie & Co.

Downgrade

Sell

Hold

SAFM

Sanderson Farms

Downgrade

Hold

Buy

VRUS

Pharmasset Inc.

Initiated

Sell

WATG

Wonder Auto Technology Inc.

Downgrade

Hold

Buy

ZONS

Zones Inc.

Upgrade

Buy

Hold

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