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 company earnings forecasts. Objective elements include volatility of past operating revenue, financial strength and company cash flows. TheStreet.com Ratings has initiated coverage of biotech firm Bionovo ( BNVI) with a sell rating. The company develops drugs to treat breast and ovarian cancers, and for menopause. The company's losses continue to grow -- Bionovo lost 5 cents per share in the first quarter of fiscal 2007 after losing 2 cents per share in the same quarter a year earlier. Net operating cash flow was down 42.3% during that same time period. TheStreet.com Ratings has initiated coverage of paper and packaging producer KapStone ( KPPC) with a hold rating. The company made dramatic gains in earnings per share during the first quarter, when EPS rose to 21 cents per share from just 2 cents per share a year earlier. Investors reacted to KapStone's improved performance by pushing the stock price up 34.3% over the past 12 months. At the same time, TheStreet.com Ratings feels that profit margins remain lower than what is desirable. The company's gross profit margin is just 26.5%, while the net profit margin of 10.8% trails the industry average.