Each weekday, 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 forecasted company earnings. Objective elements include volatility of past operating revenue, financial strength and company cash flows.

Casual dining restaurant chain Kona Grill ( KONA) has been upgraded to hold from sell. The company's revenue jumped 53.7% in the first quarter of fiscal 2007 compared with the same quarter a year earlier, far exceeding the industry average of 11.2%. Kona Grill has been narrowing its losses, losing just 9 cents per share in first quarter of 2007 compared with 16 cents per share a year ealier. Analysts are expecting the company to swing to a profit by fiscal year 2008. If this happens, it could mean additional gains for a stock that has already shot up 40.8% in the past year. Kona Grill had been rated a sell since September 2006.

Dutch insurer Aegon ( AEG) has been upgraded to buy from hold. TheStreet.com Ratings feels this company's primary strength is the solid performance of its stock, which is up 17.5% over the past year. AEG shares have gained value, even as earnings have decreased, falling 19.6% in the first quarter of fiscal 2007 compared with the year-earlier period. Aegon still trades at a discount to its peers, with a price-to-earnings ratio of just 10 compared with the insurance industry average of 12.1. This seems to suggest there could be more upside potential. AEG had been rated a hold since March 2006.

Cross Country Healthcare ( CCRN) has been downgraded to hold from buy. The company provides health care staffing services throughout the U.S. The gross profit margin for Cross Country Healthcare has fallen to 23%, which TheStreet.com Ratings feels is rather low. Along with this, the net profit margin of 2.7% trails the industry average. The company's stock price has started to tumble, falling 16.2 in the past three months. CCRN had been rated a buy since November 2006.

Pool Corp. ( POOL) has been upgraded to buy from hold. The company is a wholesale distributor of swimming pool supplies, equipment and related products. POOL has an impressive return on equity of 41.2%, nearly four times the leisure products industry average. Revenue increased 7.2% in the first quarter of fiscal 2007 compared with the year-earlier period. Although earnings per share declined during that same time period, TheStreet.com Ratings feels the company is poised for EPS growth in the coming year. Pool Corp. has been rated a hold since February 2007.

Gerber Scientific ( GRB) has been downgraded to a hold from a buy. The company specializes in sign making and specialty graphics. Its products are also used in the production of apparel, flexible materials and in ophthalmic lens processing. TheStreet.com Ratings feels Gerber Scientific's gross profit margin is currently lower than what is desirable, coming in at 30.8%. The net profit margin of 1.6% also trails the electrical equipment and instruments industry average. The company's stock price has plunged 19.3% in the past three months. Gerber Scientific had been rated a buy since July 2006.

Some recent rating changes are highlighted below.


TheStreet.com Ratings Stock Upgrades, Downgrades
Company Name Ticker Change New Rating Former Rating
Orsus Xelent Tech ORS Downgrade Hold
Kona Grill KONA Upgrade Hold Sell
Aegon AEG Upgrade Buy Hold
Cross Country Healthcare CCRN Downgrade Hold Buy
Rand Capital RAND Upgrade Buy Hold
Pool Corp POOL Upgrade Buy Hold
Opnet Tech OPNT Downgrade Hold Buy
Providence & Worcester RR PWX Downgrade Hold Buy
Gerber Scientific GRB Downgrade Hold Buy
Source: TheStreet.com Ratings