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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 September 3.

Hewitt Associates

( HEW) was upgraded from hold to buy. Hewitt Associates provides human resource benefits, outsourcing, and consulting services in the U.S., the U.K. andinternationally. The company's strengths can be seen in multiple areas, such as its solid stock price performance, increase in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

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

S&P 500

and the IT services industry. The net income increased by 1.4% when compared with the same quarter one year prior, going from $47.51 million to $48.15 million.

Despite its growing revenue, the company underperformed as compared with the industry average of 13.6%. Since the same quarter one year prior, revenue has slightly increased by 7.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.

The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.

HEW has improved earnings per share by 11.6% 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, HEW reported poor results of -$1.69 vs. -$1.09 in the prior year. This year, the market expects an improvement in earnings ($2.00 vs. -$1.69).

The current debt-to-equity ratio, 0.50, 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 0.95 is somewhat weak and could be cause for future problems.

HEW had been rated a hold since July 15, 2008.

Mariner Energy

( ME) has been downgraded from buy to hold. Mariner Energy operates as an independent oil and gas exploration, development and production company. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the company has not been very careful in the management of its balance sheet.

ME's very impressive revenue growth greatly exceeded the industry average of 29.5%. Since the same quarter one year prior, revenue leaped by 101.5%. Growth in the company's revenue appears to have helped boost the earnings per share.

Powered by its strong earnings growth of 265.78% and other important driving factors, this stock has surged by 34.43% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.

Current return on equity exceeded its return on equity from the same quarter one year prior. This is a clear sign of strength within the company. Compared with other companies in the oil, gas & consumable fuels industry and the overall market on the basis of return on equity, ME has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.

ME's debt-to-equity ratio of 0.71 is somewhat low overall, but it is high when compared with the industry average, implying that the management of the debt levels should be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 0.45 is very low and demonstrates very weak liquidity.

ME had been rated a buy since August 26, 2008.

Massey Energy

( MEE) has been downgraded from buy to hold. Massey Energy Company, through its subsidiaries, produces, processes and sells bituminous coal. The company's customers include electric utilities, steel manufacturers, industrial customers andenergy traders and brokers. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.

MEE's revenue growth has slightly outpaced the industry average of 29.5%. Since the same quarter one year prior, revenue rose by 33.6%. 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.

Compared with its closing price of one year ago, MEE's share price has jumped by 186.02%, exceeding the performance of the broader market during that same time frame. Although MEE had significant growth over the past year, our hold rating indicates that we do not recommend additional investment in this stock at the current time.

MEE has experienced a steep decline in earnings per share in the most-recent quarter in comparison to its performance from 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, MEE increased its bottom line by earning $1.16 vs. 52 cents in the prior year. This year, the market expects an improvement in earnings ($3.62 vs. $1.16).

Return on equity has greatly decreased when compared with its return on equity from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared with other companies in the oil, gas & consumable fuels industry and the overall market, MEE's return on equity significantly trails that of both the industry average and the S&P 500.

The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared with that of the S&P 500 and the oil, gas & consumable fuels industry. The net income has significantly decreased by 367.1% when compared with the same quarter one year ago, falling from $34.94 million to -$93.34 million.

MEE had been rated a buy since April 28, 2008.

Noble Energy

(NBL) - Get Report

has been downgraded from buy to hold. Noble Energy, through its subsidiaries, engages in the exploration, development, production and marketing of crude oil and natural gas in the U.S. and internationally. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income and disappointing return on equity.

NBL's very impressive revenue growth exceeded the industry average of 29.5%. Since the same quarter one year prior, revenues leaped by 54.2%. 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 operating cash flow has significantly increased by 84.85% to $648.00 million when compared with the same quarter last year. In addition, NBL has also vastly surpassed the industry average cash flow growth rate of 22.99%.

NBL has experienced a steep decline in earnings per share in the most-recent quarter in comparison with its performance from 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, NBL has increased its bottom line by earning $5.44 vs. $3.78 in the prior year. This year, the market expects an improvement in earnings ($8.50 vs. $5.44).

Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. In comparison with the other companies in the oil, gas & consumable fuels industry and the overall market, NBL's return on equity is significantly below that of the industry average and is below that of the S&P 500.

The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared with that of the S&P 500 and the oil, gas and consumable fuels industry. The net income has significantly decreased by 168.9% when compared with the same quarter one year ago, falling from $209.11 million to -$144.00 million.

NBL had been rated a buy since September 1, 2006.

New York Times

(NYT) - Get Report

has been downgraded from hold to sell. The New York Times Company operates as a diversified media company in the U.S. It operates in two segments, News Media and About Group. The company's weaknesses can be seen inmultiple areas, such as its generally disappointing historical performance in the stock itself, unimpressive growth in net income and generally weak debt management.

NYT'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 40.31%, which is also worse than the performance of the S&P 500 Index. 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.

The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the media industry. The net income has significantly decreased by 82.1% when compared with the same quarter one year ago, falling from $118.37 million to $21.14 million.

The debt-to-equity ratio of 1.21 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with this, the company manages to maintain a quick ratio of 0.43, which clearly demonstrates the inability to cover short-term cash needs.

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. When compared to other companies in the media industry and the overall market, NYT's return on equity is below that of both the industry average and the S&P 500.

NYT, with its decline in revenue, underperformed when compared the industry average of 5.1%. Since the same quarter one year prior, revenue has slightly dropped by 6.0%. Weakness in the company's revenue seems to not be hurting the bottom line, shown by stable earnings per share.

NYT had been rated a hold since April 1, 2008.

Additional ratings changes from September 3 are listed below.

Ticker

Company Name

Change

New Rating

Former Rating

BWINA

Baldwin & Lyons

Upgrade

Buy

Hold

CALD

Callidus Software Inc.

Downgrade

Sell

Hold

CHFC

Chemical Financial Corp.

Upgrade

Buy

Hold

EEI

Ecology and Environment Inc.

Downgrade

Hold

Buy

ESBF

ESB Financial Corp.

Upgrade

Hold

Sell

GNI

Great Northern Iron Ore Properties

Downgrade

Hold

Buy

HA

Hawaiian Holdings Inc.

Upgrade

Hold

Sell

HEW

Hewitt Associates

Upgrade

Buy

Hold

ME

Mariner Energy Co.

Downgrade

Hold

Buy

MEE

Massey Energy Co.

Downgrade

Hold

Buy

NBL

Noble Energy Inc.

Downgrade

Hold

Buy

NRG

NRG Energy

Downgrade

Hold

Buy

NYT

New York Times Co.

Downgrade

Sell

Hold

ORI

Old Republic International Co.

Downgrade

Sell

Hold

PRU

Prudential Financial

Upgrade

Buy

Hold

SCMP

Sucampo Pharmaceuticals

Initiated

Hold

SCRX

Sciele Pharamaceuticals

Upgrade

Buy

Hold

WPI

Watson Pharmaceuticals

Upgrade

Buy

Hold

WRES

Warren Resources

Downgrade

Hold

Buy

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