The following ratings changes were generated on Friday, Nov. 14

We've upgraded

Alaska Air Group

(ALK) - Get Report

from sell to hold. Strengths include its revenue growth, solid stock price performance and largely solid financial position with reasonable debt levels by most measures. Weaknesses include deteriorating net income, poor profit margins and disappointing return on equity.

Revenue increased by 3.4% since the same quarter one year ago. Alaska Air's current debt-to-equity ratio of 1.7 is below the industry average, suggesting that this level of debt is acceptable within the airlines industry. The gross profit margin of 1.1% is extremely low, having decreased significantly from the same period last year. The 8.5% net profit margin trails the industry average.

Net income is down 205.7% from the same quarter a year ago, to -$86.5 million, underperforming the S&P 500 and the airlines industry. Alaska's share price has not changed very much compared with where it was trading a year ago, due to the relatively week year-over-year performance of the overall market and the company's stagnant earnings. There is currently no conclusive evidence that warrants the purchase or sale of this stock.

We've downgraded

Berkshire Hathaway

(BRK.A) - Get Report

from buy to hold. Strengths include its solid financial position based on a variety of debt and liquidity measures that we have evaluated. At the same time, however, we also find weaknesses, including a decline in the stock,price during the past year, deteriorating net income and premium valuation.

Berkshire Hathaway, with its revenue decline of 6.7% since the same quarter one year ago, slightly underperformed the industry average of 6.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share. It has experienced a steep decline in earnings per share in the most recent quarter compared with its performance from the same quarter a year ago. During the past fiscal year, it increased its bottom line by earning $8,546 vs. $7,143 in the prior year. For the next year, the market is expecting a contraction of 34.4% in earnings to $5,605. Berkshire's debt-to-equity ratio of 0.3 is low, but it is higher than that of the industry average.

Shares are down 24.25% over the past year, reflecting the market's overall time (which was actually deeper) and the sharp decline in the company's EPS. We do not see anything in this company's numbers that would change the one-year trend. It was down over the last 12 months, and it could be down again in the next 12. Naturally, a bull or bear market could sway the movement of this stock.

We've downgraded

Central European Distribution

( CEDC) from buy to hold. Strengths include its robust revenue growth and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, disappointing return on equity and weak operating cash flow.

The company's very impressive revenue growth of 51% since the same quarter last year greatly exceeded the industry average of 7.4%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a steep decline in earnings per share in the most recent quarter. During the past fiscal year, it increased its bottom line by earning $1.89 vs. $1.51 in the prior year. This year, the market expects an improvement in earnings to $2.81.

Central European Distribution's return on equity has slightly decreased from the same quarter one year prior, implying a minor weakness in the organization and underperforming both the industry average and the

S&P 500

. Net income has significantly decreased, by 96.1% to $660,000, when compared with the same quarter a year ago, underperforming both the S&P 500 and the beverages industry.

We've upgraded

Genzyme

( GENZ) from hold to buy, driven by its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company has had subpar growth in net income.

Revenue rose by 20.8% since the same quarter a year ago, outpacing the industry average growth rate of 17.4%. Genzyme's debt-to-equity ratio is very low at 0.1 and is currently below the industry average, implying very successful management of debt levels. The company also maintains an adequate quick ratio of 1.4, which illustrates the ability to avoid short-term cash problems. Net operating cash flow has slightly increased to $254.2 million, or 5.5% when compared with the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -38.5%.

EPS declined by 27.6% in the most recent quarter compared with the same quarter a year ago. During the past fiscal year, Genzyme turned its bottom line around by earning $1.75 vs. -10 cents in the prior year. This year, the market expects an improvement in earnings to $3.99. Gebzyme's gross profit margin is currently very high at 78.7%, though it has decreased from the same period last year. Its net profit margin of 10.3%, however, is significantly lower.

We've downgraded

Valhi

(VHI) - Get Report

from hold to sell, driven by its disappointing return on equity, poor profit margins, weak operating cash flow, generally disappointing historical performance in the stock itself and generally weak debt management.

Valhi's return on equity has greatly decreased from the same quarter a year ago, a signal of major weakness within the corporation, and it significantly trails both the industry average and the chemicals industry. Valhi's gross profit margin of 19.3% is low, having decreased from the same quarter a year ago, and its net profit margin of -5.9% is significantly below the industry average. Net operating cash flow has decreased to $40.90 million, or 39.85% compared with the same quarter last year, and the firm's growth rate is much lower than the industry average. Valhi's current debt-to-equity ratio of 1.77 is quite high overall and when compared with the industry average, suggesting that the current management of debt levels should be re-evaluated. Even though the debt-to-equity ratio is weak, Valhi's quick ratio is somewhat strong at 1.17, demonstrating the ability to handle short-term liquidity needs.

Shares have plunged by 42.1% over the year, dragged down in part by the decline in the S&P 500, and the stock's decline could help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.

Other ratings changes include

China BAK

(CBAK)

and

Landry's

( LNY), both downgraded from hold to sell.

All ratings changes generated on Nov. 14 are listed below.

Ticker

Company

Current

Change

Previous

AAME

Atlantic American

SELL

Downgrade

HOLD

ALK

Alaska Air

HOLD

Upgrade

SELL

ASEI

American Science

BUY

Upgrade

HOLD

BRK.A

Berkshire Hathaway

HOLD

Downgrade

BUY

CBAK

China BAK

SELL

Downgrade

HOLD

CEDC

Central European Distribution

HOLD

Downgrade

BUY

FLY

Babcock & Brown

SELL

Initiated

FNM

Fannie Mae

SELL

Downgrade

HOLD

FRP

Fairpoint Communications

SELL

Downgrade

HOLD

FSCI

Fisher Communications

HOLD

Downgrade

BUY

GENZ

Genzyme

BUY

Upgrade

HOLD

GHL

Greenhill

HOLD

Downgrade

BUY

IFF

International Flavors & Fragrances

HOLD

Downgrade

BUY

ING

ING Groep

SELL

Downgrade

HOLD

LNY

Landry's

SELL

Downgrade

HOLD

MAM

Maine & Maritimes

BUY

Upgrade

HOLD

PRGN

Paragon Shipping

SELL

Initiated

QXM

Qiao Xing Mobile

SELL

Initiated

RCMT

RCM Technologies

SELL

Downgrade

HOLD

RLI

RLI

BUY

Upgrade

HOLD

SBSI

Southside Bancshares

HOLD

Downgrade

BUY

SSY

SunLink Health

SELL

Downgrade

HOLD

SUP

Superior Industries

SELL

Downgrade

HOLD

VHI

Valhi

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.