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 Friday, June 20.

Presidential Life

( PLFE) was upgraded to buy from hold. This Nyack, N.Y.-based firm sells life insurance and annuities throughout the U.S. This rating is driven by several positive factors that could result in improved stock performance.

Presidential Life's debt-to-equity ratio is a low 0.14, which is below the industry average. Net operating cash flow has significantly increased by 847.11% to $26.09 million over the same quarter last year. In addition, Presidential Life has also vastly surpassed the industry average cash flow growth rate of -27.47%. Regardless of the drop in revenue, the company managed to outperform against the industry average of 23.5%. Since the same quarter one year prior, revenue fell by 22.2%. PLFE's earnings per share declined by 47.9% in the most recent quarter a year ago.

During the past fiscal year, Presidential Life increased its bottom line by earning $2.15 vs. $1.67 a share in the prior year. The change in net income from the same quarter one year ago has exceeded the

S&P 500

and the insurance industry average. The net income has significantly decreased by 48.2% when compared to the same quarter one year ago, falling from $21.11 million to $10.93 million. Presidential Life had been rated a hold since Aug. 8, 2007.

Recently,

Home Bancshares

(HOMB) - Get Report

was upgraded to hold from sell. Operating out of Conway, Ark., Home Bancshares is a financial holding company that provides commercial and retail banking for a variety of clientele in the southeast region of the U.S. The primary factors that have impacted our rating are mixed with little evidence to justify the expectation of either a positive or negative performance for this stock.

Home Bancshares' most recent quarter showed a 44.4% year-over-year improvement in earnings per share. This trend suggests that the performance of the business is improving. During the past fiscal year, HOMB increased its bottom line by earning $1.17 a share, vs. 76 cents in the prior year. This year, the market expects an improvement in earnings ($1.43 vs. $1.17). The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the commercial banks sector. Net income increased by 52.9% when compared to the same quarter a year ago, rising from $4.76 million to $7.28 million.

The return on equity has improved slightly year over year. HOMB has outperformed in comparison to industry average, but has underperformed when compared to the S&P 500. The gross profit margin for Home Bancshares is high; currently at 51.2%. Despite the mixed results of the gross profit margin, HOMB's net profit margin of 15.9% compares favorably to the industry average. Home Bancshares had been rated a sell since July 25, 2007.

Last week,

Owens Corning

(OC) - Get Report

was upgraded to hold from sell. This Toledo, Ohio-based company produces residential and commercial building materials. The primary factors that have impacted our rating are mixed with little evidence to justify the expectation of either a positive or negative performance for this stock.

The company's revenue growth greatly exceeded the industry average of 13.7%. Since the same quarter one year prior, revenue rose by 20.4%. Net operating cash flow has significantly increased by 62.58% to -$107 million when comparing year over year. In addition, OC has also surpassed the industry average cash flow growth rate of -125.40%. Despite currently having a low debt-to-equity ratio of 0.54, it is higher than that of the industry average. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.79 is weak. Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior.

Compared to other companies in the building products industry and the overall market on the basis of return on equity, Owens Corning underperformed against that of the industry average and is significantly less than that of the S&P 500. The gross profit margin for Owens Corning is rather low; currently it is at 20.60%. It has decreased from the same quarter the previous year. Owens Corning had been rated a sell since Nov. 12, 2007.

Transdigm Group

(TDG) - Get Report

has been upgraded to hold from sell. Transdigm specializes in the design and production of proprietary aircraft components which are utilized in nearly all commercial and military aircraft in service. The primary factors that have impacted our rating are mixed with little evidence to justify the expectation of either a positive or negative performance for this stock.

The revenue growth came in higher than the industry average of 4.6%. Year over year, revenue rose by 21.4%. TDG has improved earnings per share by 42.2% compared to last year's same quarter. EPS performance has been positive for two years. This trend suggests that the performance of the business is improving. During the past fiscal year, Transdigm increased its bottom line by earning $1.83 a share vs. 52 cents in the prior year. This year, the market expects an improvement in earnings ($2.74 vs. $1.83).

Net operating cash flow has slightly increased 5.88% when compared year-over-year. The debt-to-equity ratio is high at 2.44 and is currently higher than the industry average. Despite the company's weak debt-to-equity ratio, the company has managed to keep a very strong quick ratio of 4.65, which shows the ability to cover short-term cash needs. TDG is off 14.41% from its price level of one year ago, reflecting the general market trend. Transdigm has been rated a sell since April 17, 2007.

Xenoport

(XNPT)

was upgraded to hold from sell. Located in Santa Clara, Calif., XNPT specializes in developing internally-discovered product candidates that utilize the body's natural nutrient transporter systems. The primary factors that have impacted our rating are mixed with little evidence to justify the expectation of either a positive or negative performance for this stock.

XNPT's debt-to-equity ratio is low at 0.00 and is below that of the industry average. Along with this, the company maintains a quick ratio of 9.01. The company's current return on equity greatly increased when compared year over year. Compared to other companies in the pharmaceuticals industry and the overall market, Xenoport's return on equity exceeds the industry average and S&P 500. Year over year, revenue slightly dropped by 9.4%. Net operating cash flow has significantly decreased to -$14.63 million or 128.17% when compared to last year's quarter. In addition, when comparing to the industry average, the firm's growth rate is much lower. Xenoport had been rated a sell since Feb. 19, 2008.

Additional ratings changes from June 20 are listed below.

Ticker

Company Name

Change

New Rating

Former Rating

PLFE

Presidential Life Corp

Upgrade

Buy

Hold

QD

Quadramed Corp

Upgrade

Buy

Hold

FBOD

First Bank of Delaware

Upgrade

Hold

Sell

GAI

Global-Tech Appliances Inc

Upgrade

Hold

Sell

HOMB

Home Bancshares Inc

Upgrade

Hold

Sell

OC

Owens Corning

Upgrade

Hold

Sell

SDXC

Switch & Data Facilities Co

Upgrade

Hold

Sell

TDG

Transdigm Group Inc

Upgrade

Hold

Sell

XNPT

Xenoport Inc

Upgrade

Hold

Sell

TRU

Torch Energy Royalty Trust

Downgrade

Hold

Buy

BUSE

First Busey Corp

Downgrade

Hold

Buy

PAAS

Pan American Silver

Downgrade

Hold

Buy

SNIC

Sonic Solutions

Downgrade

Sell

Hold

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