NEW YORK (
) -- Contracting net income, poor profit margins and weak liquidity prompt TheStreet Ratings' stock model to downgrade
to 'Hold' from 'Buy'.
TheStreet Ratings released rating changes on 11 additional U.S. common stocks for June 23, 2010. Ten stocks have been downgraded and two stocks have been upgraded by our stock model.
At Walgreen the net income has decreased by 11.3% in fiscal third quarter when compared to the same quarter one year ago, dropping from $522 million to $463 million. Gross profit margin has decrease from the same quarter last year to 29.1% and a quick ratio of 0.69 shows the potential for problems in covering short-term cash needs.
, the $20.8 billion market cap electric utility & parent of Florida Power & Light formerly known as FPL Group, was also downgraded to 'Hold' from 'Buy' for June 23, 2010. This coincided with, but was unrelated to, the stock trading under its new New York Stock Exchange symbol of NEE on Wednesday.
Week operating cash flow, poor liquidity and high debt were cited by the stock model as drawbacks for NextEra. Beyond the model, the company is making large bets on wind energy, in the face of low natural gas prices, that may prove to be less cost effective than conventional electric utility fuel alternatives.
The only upgrade to 'Buy' today was issued to
The Children's Place Retail Stores
. This specialty retailer of children's clothing for kids from birth to age 10 has a market capitalization of $1.3 billion. The model likes the company's strong performing stock as well as revenue & operating cash flow growth, strong liquidity position, and lack of debt.
-- Reported by Kevin Baker in Jupiter, Fla.
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Kevin Baker became the senior financial analyst for TheStreet Ratings upon the August 2006 acquisition of Weiss Ratings by TheStreet.com, covering mutual funds. He joined the Weiss Group in 1997 as a banking and brokerage analyst. In 1999, he created the Weiss Group's first ratings to gauge the level of risk in U.S. equities. Baker received a B.S. degree in management from Rensselaer Polytechnic Institute and an M.B.A. with a finance specialization from Nova Southeastern University.