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.

Brunswick Corp. ( BC) manufactures and sells boats, marine engines, fitness equipment and bowling and billiard products. It has been downgraded to a sell from a hold. The company's weaknesses include a 36.4% EPS decline in the second quarter from the same period last year, to 63 cents per share from 99 cents per share in 2006. Its return on equity has also gone down from the same quarter the previous year, and its net profit margin of 3.80% trails that of the industry average. Brunswick's stock price has decreased by 16.89% in the last 12 months. It had been rated a hold since April 2005.

Oil and natural gas producer Clayton Williams Energy ( CWEI) has been upgraded to a hold from a sell. The company's revenue grew by 32.2% in the second quarter of 2007 compared with the same period last year, and its net operating cash flow increased 35.92% to $53.71 million. The company's profit margins are also expanding. As a counter to these strengths, Clayton Williams' debt-to-equity ratio of 3.26 is above that of the industry average, implying that there is very poor management of debt levels. Likewise, its return on equity has decreased compared to the year-earlier period, a major sign of weakness. The stock had been rated a sell since March 2007.

CTS Corp. ( CTS) designs, manufactures and sells electronic components and sensors. It has been upgraded to a buy from a hold. The company's revenue growth of 2.2% in the second quarter of 2007 compared with the same period last year outpaced the industry average of 0.7%, and its debt-to-equity ratio of 0.19 is beneath that of the industry average. Net income increased by 12.3% in the second quarter, outperforming that of the S&P 500 and the electronic equipment and instruments industry average, growing to $5.91 million from $5.26 million. CTS has demonstrated a two-year pattern of EPS growth, and should continue to improve in the coming year. It had been rated a hold since May 2007.

National Semiconductor Corp. ( NSM) has been downgraded to a hold from a buy. The company's strengths include its 77.38% return on equity, which is significantly better than that of both the industry average and the S&P 500. Its net profit margin of 18.20% is also above that of the industry average. As a counter to these strengths, the company's net income decreased by 28.7% in the first quarter of its fiscal year 2008 compared with the same period last year, falling to $85.60 million from $120.10 million. National Semiconductor had been rated a buy since September 2005.

Hospitality and entertainment company Pinnacle Entertainment ( PNK) has been downgraded to a hold from a buy based on its disappointing financial performance in the second quarter of 2007. Its revenue increased by 1.8% in the quarter compared to the same period last year, mainly due to the acquisition of President Casino Riverboat in December 2006, while net income declined to $9.90 million from $46.01 million in the second quarter of 2006. The company's positives include new property additions and a new Atlantic City project in its pipeline, scheduled for completion in 2011 or 2012.

Insurance coverage presents a potential risk. As a result of hurricanes and other natural disasters in recent years, insurance providers have limited coverage in areas prone to such calamities, and exorbitant premiums are being charged for insuring properties in these markets. Pinnacle has several properties in these markets. The company is also currently in litigation with several insurance providers to recover remaining insurance proceeds for the damage to the Casino Magic Biloxi, which was closed as a result of Hurricane Katrina. The company had been rated a buy since May 2007.

Qualstar Corp. ( QBAK) designs, develops manufactures and sells automated magnetic tape libraries used to store, retrieve and manage electronic data primarily in network computing environments. It has been upgraded to a hold from a sell. The company's revenue rose 18.4% in the fourth quarter of its fiscal 2007 over the year-earlier period, exceeding the industry average of 4.0%. The company has no debt to speak of, and its return on equity improved slightly when compared with the fourth quarter of fiscal 2006. Qualstar's earnings swung to a gain of 2 cents per share in the fourth quarter of 2007 from a loss of 6 cents per share in the same quarter last year. Qualstar had been rated a sell since September 2005.

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