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 April 22.

Talisman Energy

(TLM)

, an upstream oil and gas company, has been upgraded to buy. For the fourth quarter, net income grew 9.7% year over year to $656 million, while earnings per share declined slightly to 30 cents from 32 cents. Revenue rose 13% in the same period to $2.05 billion.

The company's gross profit margin is high at 75%, and its net profit margin of 32% significantly exceeds the industry average. The debt-to-equity ratio of 0.62 is low overall, but it is high compared with the industry average, and the quick ratio of 0.73 is weak.

The stock's rise in price over the past year has outperformed the

S&P 500

. The rise in price has netted shares a price-to-earnings ratio of 21.49, which is higher than the industry average. We feel, however, that other strengths in the company justify the premium. Talisman Energy had been rated hold since Feb. 7.

Carbo Ceramics

(CRR) - Get Report

, a maker of ceramic proppants used in hydraulic fracturing of natural gas and oil wells, has been upgraded to buy. For the fourth quarter, revenue increased 7.7% year over year to $93.7 million, while earnings per share declined to 56 cents from 61 cents. For 2008, the market expects an improvement in full-year EPS to $2.26 from $2.20 in 2007. With no debt to speak of, the company has a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign.

In addition, Carbo Ceramics has a quick ratio of 2.44, which demonstrates an ability to cover short-term liquidity needs. Net operating cash flow has increased 8.4% to $20 million from the year-ago quarter. At 41%, the gross profit margin is strong, but the company's net profit margin of 15% trails the industry average. Carbo Ceramics had been rated hold since Jan. 2.

Mattel

(MAT) - Get Report

, which makes toys, has been downgraded to hold.Strengths such as a solid financial position, notable return on equity and good cash flow from operations are balanced by deteriorating net income and a disappointing stock-price performance. For the first quarter, revenue declined 2.2% year over year to $919.3 million, and earnings per share fell to a loss of 13 cents from a profit of 3 cents.

For 2008, the market expects an improvement in full-year EPS to $1.66 from $1.59 in 2007. The company's debt-to-equity ratio, 0.39, is low, implying successful management of debt, and its quick ratio of 1.64 demonstrates an ability to cover short-term liquidity needs. Return on equity has improved slightly from the year-ago quarter to 23%.

Shares have fallen 30% in the past year, netting the stock a price-to-earnings ratio of 13.99, which is cheaper than the industry average. Nevertheless, we do not believe the stock is a good buy right now. Mattel had been rated buy since Aug. 8, 2006.

National City

( NCC), a provider of commercial and retail banking, mortgage financing and servicing, consumer finance and asset management services, has been downgraded to sell. For the first quarter, revenue increased 15% year over year to $3.26 billion, while EPS swung to a loss of 27 cents from a profit of 50 cents.

For 2008, the market expects an improvement in full-year EPS to $1.20 from 54 cents in 2007. Return on equity has greatly decreased from the year-ago quarter and trails the industry average. This is a signal of major weakness within the corporation. Gross profit margin is low at 25%, and a negative net profit margin of 5.2% significantly trails the industry average.

Shares have fallen 84% in the past year, consistent with the company's decline in earnings. The decline in price may make the stock cheap compared to others in its sector, but due to other concerns, we feel the stock is still not a good buy right now. National City had been rated hold since June 29.

Hanesbrands

(HBI) - Get Report

, a purveyor of underwear, has been initiated with a hold rating. Strengths such as notable return on equity, a solid stock-price performance and impressive EPS growth are countered by poor debt management and weak operating cash flow.

At 48%, the company's return on equity significantly exceeds the industry average. The gross profit margin of 38% is strong, but a net profit margin of 3.6% trails the industry average. The debt-to-equity ratio is very high at 7.44, and with a quick ratio of 0.97, the company may be unable to avoid short-term cash problems. Net operating cash flow has significantly decreased to negative $19.5 million in the past year.

In addition, when comparing to the industry average, the firm's growth rate is much lower. Over the past year, the stock's rise in price has outperformed the S&P 500. Looking ahead, we believe this company's fundamentals will not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.

Additional ratings changes from April 22 are listed below.

Ticker

Company Name

Change

New Rating

Former Rating

CRR

Carbo Ceramics

Upgrade

Buy

Hold

CAW

CCA Industries

Downgrade

Hold

Buy

YTBLA

YTB International

Upgrade

Hold

Sell

EXFO

Exfo Electro Optical Engineering

Upgrade

Buy

Hold

MAT

Mattel

Downgrade

Hold

Buy

MVC

MVC Capital

Upgrade

Buy

Sell

NCC

National City

Downgrade

Sell

Hold

PNNW

Pennichuck

Upgrade

Buy

Hold

TLM

Talisman Energy

Upgrade

Buy

Hold

TTEK

Tetra Tech

Upgrade

Buy

Hold

ACIW

ACI Worldwide

Upgrade

Hold

Sell

PRC

Petro Resources

Upgrade

Hold

Sell

HBI

Hanesbrands

Initiated

Hold

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