The following ratings changes were generated on Monday, Nov. 3.

We've upgraded biopharmaceutical company

Celgene

(CELG) - Get Report

from sell to hold. Strengths include its robust 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 company's return on equity has been disappointing.

Revenue leaped by 67.7% over the same quarter one year prior, greatly exceeding the industry average of 17.3% and boosting EPS. Celgene has no debt to speak of, resulting in a debt-to-equity ratio of zero, a relatively favorable sign. The company also maintains a quick ratio of 6.08, which clearly demonstrates the ability to cover short-term cash needs. Celgene's gross profit margin is currently very high, coming in at 91.40%, but it has managed to decrease from the same period last year. The net profit margin of 23.30% trails the industry average.

Return on equity has greatly decreased from the same quarter one year prior, a signal of major weakness within the corporation. Celgene's return on equity significantly trails that of both the biotechnology industry average and the

S&P 500

. Celgene's share price has not changed very much over the past year, due to the relatively weak year-over-year performance of the overall market and the company's stagnant earnings. 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.

We've downgraded integrated communications company

CenturyTel

(CTL) - Get Report

from buy to hold. Strengths include its notable return on equity, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. Weaknesses include unimpressive growth in net income, a generally disappointing performance in the stock itself and feeble growth in the company's earnings per share.

Return on equity has improved slightly when compared to the same quarter one year prior, which can be construed as a modest strength in the organization, outperforming the ROE of the S&P 500 but underperforming the diversified telecommunication services industry average. CenturyTel's gross profit margin of 62.7% is rather high, but it had managed to decrease from last year. Its net profit margin of 13% compares favorably with the industry average. Since the same quarter one year ago, revenue dropped by 2.4%, compared with the industry average of 7.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.

Net income is down 25.1% compared with the same quarter a year ago, falling to $84.73 million and underperforming the industry but outperforming the S&P 500. Shares are down 43% on the year, an underperformance of the S&P 500. In addition, EPS are also lower. Naturally, the overall market trend is bound to be a significant factor, and 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.

We've upgraded

National Penn Bancshares

(NPBC)

, the holding company for National Penn Bank, from hold to buy, driven by its robust revenue growth, expanding profit margins, increase in net income and solid stock price performance. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Revenue rose by 32.3% over the same quarter one year prior, exceeding the industry average rate of 2.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share. Net income increased by 14.4%, to $19.23 million, outperforming both the S&P 500 and the commercial banks industry. Gross profit margin of 55.9% has increased since the same quarter last year, nad net profit margin of 14% is above the industry average.

EPS declined by 32.4% over the same quarter last year. This company has reported somewhat volatile earnings recently, and we feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, it increased its bottom line by earning $1.31 vs. $1.29 in the prior year. For the next year, the market is expecting a contraction of 6.6% in earnings to $1.23. Share price has not changed very much due to the relatively weak year-over-year performance of the overall market and the company's stagnant earnings. It goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.

We've downgraded

Rent-A-Center

(RCII) - Get Report

, which offers household durable products under rental purchase agreements that allow the customer to obtain ownership of the merchandise at the conclusion of an agreed upon rental period, from buy to hold. Strengths include its revenue growth, largely solid financial position with reasonable debt levels by most measures and compelling growth in net income. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.

Revenue increased slightly by 0.4% since the same quarter last year, and EPS improved. The debt-to-equity ratio is somewhat low, currently at 0.94, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Earnings per share rose by 18.9% in the most recent quarter compared with the same quarter a year ago. This company has reported somewhat volatile earnings recently, but we feel it is poised for EPS growth in the coming year. During the past fiscal year, it reported lower earnings of $1.08, vs. $1.46 in the prior year. This year, the market expects an improvement in earnings to $2.01.

Return on equity has improved slightly compared with the same quarter last year, which can be construed as a modest strength in the organization. Its ROE is significantly below that of the S&P 500 and the industry average. Rent-A-Center's gross profit margin is extremely low, coming in at 12.6%, having decreased significantly from the same quarter previous year. Net profit margin of 4.1% trails the industry average.

We've downgraded

Constellation Brands

(STZ) - Get Report

, which produces and markets beverage alcohol brands in wine, spirits and imported beer categories, from hold to sell, driven by its deteriorating net income, generally weak debt management, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself.

Net income is down 131.5% from the same quarter last year to -$22.7 million, significantly underperforming the S&P 500 and the beverages industry. The debt-to-equity ratio of 1.81 is quite high overall and when compared with the industry average, suggesting that the current management of debt levels should be re-evaluated. To add to this, Constellation Brands has a quick ratio of 0.6, demonstrating the lack of ability of the company to cover short-term liquidity needs. Return on equity has greatly decreased from the same quarter one year prior, a signal of major weakness within the corporation, significantly trailing the S&P 500 and the industry average. Net operating cash flow has decreased to $209.50 million or 20.58%, and the firm's cash generation rate is much lower than the industry average.

We have only bad news to report on this stock's performance over the last year: It has tumbled by 50.08%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 130.30% compared with the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor, and 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.

Other ratings changes include

Hitachi

( HIT) and

Phoenix

(PNX)

, both downgraded from hold to sell.

All ratings changes generated on Nov. 3 are listed below.

Ticker

Company

Current

Change

Previous

ARE

Alexandria Real Estate

HOLD

Downgrade

BUY

CELG

Celgene

HOLD

Upgrade

SELL

CHMP

Champion Industries

HOLD

Downgrade

BUY

CHRT

Chartered Semiconductor

SELL

Downgrade

HOLD

CHUX

O'Charley's

SELL

Downgrade

HOLD

CTL

CenturyTel

HOLD

Downgrade

BUY

CVD

Covance

HOLD

Downgrade

BUY

DW

Drew Industries

SELL

Downgrade

HOLD

DXYN

Dixie Group

SELL

Downgrade

HOLD

EPR

Entertainment Properties

HOLD

Downgrade

BUY

ERES

eResearch Technologies

HOLD

Downgrade

BUY

FIT

Health Fitness

SELL

Downgrade

HOLD

HIT

Hitachi

SELL

Downgrade

HOLD

KWR

Quaker Chemical

HOLD

Downgrade

BUY

MBFI

MB Financial

HOLD

Downgrade

BUY

MSM

MSC Industrial Direct

HOLD

Downgrade

BUY

NPBC

National Penn Bancshares

BUY

Upgrade

HOLD

NVSL

Naugatuck Valley Financial

SELL

Downgrade

HOLD

PMC

Pharmerica

HOLD

Initiated

-

PNX

Phoenix

SELL

Downgrade

HOLD

RCII

Rent-A-Center

HOLD

Downgrade

BUY

SMMX

Symyx Technologies

SELL

Downgrade

HOLD

STZ

Constellation Brands

SELL

Downgrade

HOLD

SYY

Sysco

HOLD

Downgrade

BUY

TE

Teco Energy

HOLD

Downgrade

BUY

VNUS

VNUS Medical

HOLD

Downgrade

BUY

WNC

Wabash National

SELL

Downgrade

HOLD

WTM

White Mountains Insurance

SELL

Downgrade

HOLD

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.

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