TSC Ratings provides exclusive stock, ETF and mutual fund ratings and commentary based on award-winning, proprietary tools. Its "safety first" approach to investing aims to reduce risk while seeking solid outperformance on a total return basis.

The following ratings changes were generated on Tuesday, May 12.

We've updated

Copart

(CPRT) - Get Report

from hold to buy, driven by its largely solid financial position with reasonable debt levels by most measures, notable return on equity and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

The company's quick ratio of 1.7 demonstrates strong liquidity. Return on equity improved slightly compared with the year-ago quarter, which can be construed as a modest strength. The 44.3% gross profit margin decreased from the year-ago quarter. The 16% net profit margin outperformed the industry average. Revenue fell 2.6% from the year-ago quarter, and EPS are down. Net income fell 15.2%, from $32 million in the year-ago quarter to $27.2 million.

We've upgraded

Donaldson

(DCI) - Get Report

from hold to buy, driven by its largely solid financial position with reasonable debt levels by most measures, notable return on equity, good cash flow from operations and growth in earnings per share. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.

The debt-to-equity ratio of 0.6 is below the industry average, and the quick ratio of 1.1 illustrates the company's ability to avoid short-term cash problems. ROE had improved slightly compared with the same quarter last year, implying a modest strength. Net operating cash flor increased by 72.1% to $42.1 million. Revenue dropped by 9.9%, but EPS improved. However, we anticipate underperformance in the coming year relative to the company's two-year pattern of positive EPS growth.

We've upgraded

Hudson City Bancorp

(HCBK)

from hold to buy, driven by its robust revenue growth, notable return on equity, expanding profit margins, good cash flow from operations and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Revenue rose 17.9% since the year-ago quarter, and EPS are up. ROE also improved, which can be construed as a modest strength. Hudson City's gross profit margin of 36.7% has increased from the year-ago quarter, and Net operating cash flor rose 68.8% to $233.5 million. EPS are up 44.4% in the most recent quarter compared with the year-ago quarter, and we think that the company's two-year trend of positive EPS growth should continue.

We've upgraded

NewMarket

(NEU) - Get Report

from hold to buy, driven by its growth in earnings per share, increase in net income, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins.

EPS are up 48% in the most recent quarter compared with the year-ago quarter, and we feel that the company's two-year pattern of positive EPS growth should continue. Net income rose 45.1% compared with the year-ago quarter, from $19.8 million to $28.7 million. The 0.7 debt-to-equity ratio is below the industry average, and the quick ratio is 1.6. Net operating cash flor increased to $96.7 million compared with the year-ago quarter.

We've upgraded

Solera Holdings

(SLH)

from hold to buy, driven by its revenue growth, impressive record of earnings per share growth, compelling growth in net income, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Revenue rose 0.9% since the year-ago quarter, and EPS improved singifincantly compared with the year-ago quarter. We feel that the company's yearlong trend of pattern EPS growth should continue. Net income rose 64% since the same quarter last year, from $7.3 million to $12 million. The 66.4% gross profit margin has increased from the year-ago period, while the 8.6% net profit margin trails the industry average. ROE rose from the year-ago quarter.

Other ratings changes include

GSI Technology

(GSIT) - Get Report

, upgraded from sell to hold, and

Dentsply

(XRAY) - Get Report

, upgraded from hold to buy.

All ratings changes for May 12 are listed below.

Note: Our quantitative model makes stock recommendations based on GAAP figures that may differ materially from data as reported by the companies themselves. As a result, rating changes are occasionally driven by so-called nonrecurring items. As always, we urge readers to use TSC Ratings' reports in conjunction with additional information to construct their opinions on the value that should be placed on any given stock.

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