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.

Charming Shoppes ( CHRS - Get Report), a specialty apparel retailer, has been downgraded to a sell. The company's weaknesses can be seen in several areas, such as its deteriorating net income, disappointing return on equity, poor profit margins, weak operating cash flow and a substandard stock performance.

Second-quarter profit dropped 44% to $18.28 million, while revenue inched up 1% to $770.9 million. The company also lowered its guidance for the third quarter and fiscal year. Net operating cash flow has decreased to $103.35 million or 11.39% from a year ago and Charming Shoppes' stock has tumbled about 53% over the last year. Charming Shoppes had been rated a hold since August 2006.

BRE Properties ( BRE), a real estate investment trust, has been downgraded to a hold. While the company has seen expanding profit margins with revenue growth and increased net income, it has also been marked by a disappointing stock performance, poor debt management and an unsatisfactory return on equity.

Third-quarter net income available to common shareholders totaled $51.4 million, or 99 cents a share, up from $11.5 million, or 22 cents a share, a year ago. This company has reported somewhat volatile earnings recently, although it seems poised for EPS growth in the coming year. Funds from operations totaled $32.4 million, or 62 cents a share, up from $30.6 million, or 58 cents a share, a year ago. Total revenues from continuing operations for the quarter climbed 8% to $87.8 million. BRE Properties had been rated a buy since August 2006.

HCP ( HCP - Get Report), another real estate investment trust, has been downgraded to a hold. Although the company has enjoyed good cash flow from operations and robust revenue and net income growth, it has also struggled with poor debt management and disappointing return on equity.

Third-quarter net income increased 319.4% from a year ago to $322.15 million, while funds from operations totaled $111.6 million, or 52 cents a share, up from $72 million, or 50 cents a share, a year ago. Revenue increased 136.2% to $284.2 million. (These figures include $1.24 million in revenue related to equity income from unconsolidated joint ventures.)

The company said it expects full-year funds from operations to be within the range of Wall Street's expectations. HCP's gross profit margin is rather high at 53%, although it is down from the same period last year. Health Care Property Investors had been rated a buy since October.

Cruise operator Royal Caribbean Cruises ( RCL - Get Report) has been upgraded to a buy. The company's strengths can be seen in several areas, such as its revenue growth, attractive valuation levels, increase in net income, good cash flow from operations and expanding profit margins. These factors should outweigh the company's somewhat disappointing return on equity.

Third-quarter profit climbed 14% from a year ago to $395 million, or $1.84 a share. Revenue totaled $2 billion, up from $1.6 billion a year ago. Net operating cash flow increased 50.2% to $336.91 million. While the company's profit margin is high, it decreased from the same period last year. Royal Caribbean Cruises had been rated a hold since May.

Bally Technologies ( BYI), a casino gaming machine maker, has been upgraded to a buy. The company boasts a solid stock price performance and expanding profit margins, along with growth in revenue, EPS and net income. These strengths should outweigh the company's generally poor debt management.

The company swung to a fiscal fourth-quarter profit, pulling in $18.5 million, or 33 cents a share, compared with a loss of $12 million, or 23 cents a share, a year ago. Revenue increased 31% to $202.4 million. This stock has surged 102.3% over the past year, and it should continue to move higher. Bally Technologies had been rated a hold since April 2006.

Additional ratings changes are listed below.

Stock Upgrades, Downgrades
Ticker Company Name Change New Rating Former Rating
SRCE 1st Source Downgrade Hold Buy
TCHC 21st Century Holding Upgrade Buy Hold
ABCB Ameris Bancorp Downgrade Hold Buy
ACSEF ACS Motion Control Downgrade Sell Hold
ALDN Aladdin Knowledge Systems Downgrade Hold Buy
BYI Bally Technologies Upgrade Buy Hold
VOXX Audiovox Upgrade Hold Sell
BRE BRE Properties Downgrade Hold Buy
BRKS Brooks Automation Downgrade Hold Buy
CGL.A Cagles Downgrade Hold Buy
CPKI California Pizza Kitchen Downgrade Hold Buy
CHRS Charming Shoppes Downgrade Sell Hold
DEPO Depomed Upgrade Hold Sell
DRAX Draxis Health Downgrade Hold Buy
EDGW Edgewater Technology Downgrade Hold Buy
VIFL Food Technology Upgrade Buy Hold
FBN Furniture Brands Downgrade Sell Hold
HCP HCP Downgrade Hold Buy
IBAS iBasis Downgrade Sell Hold
IRIS Iris International Downgrade Hold Buy
IFC Irwin Financial Downgrade Sell Hold
KEI Keithley Instruments Downgrade Sell Hold
LOW Lowe's Companies Downgrade Hold Buy
MAGS Magal Security Systems Downgrade Sell Hold
MPET Magellan Petroleum Downgrade Sell Hold
NEM Newmont Mining Upgrade Buy Hold
NVTL Novatel Wireless Upgrade Buy Hold
OLN Olin Downgrade Hold Buy
PHII PHI Upgrade Buy Hold
NSUR Insure.com Upgrade Hold Sell
RDN Radian Group Downgrade Sell Hold
RAS RAIT Financial Downgrade Sell Hold
RMD Resmed Downgrade Hold Buy
RIV Riviera Holdings Downgrade Sell Hold
ROG Rogers Upgrade Buy Hold
RCL Royal Caribbean Cruises Upgrade Buy Hold
SMTC Semtech Downgrade Hold Buy
PDGI Pharmanet Development Group Upgrade Buy Hold
TK Teekay Group Downgrade Hold Buy
TTI Tetra Technologies Downgrade Hold Buy
TWI Titan International Downgrade Hold Buy
TG Tredegar Downgrade Hold Buy
GTI Graftech International Upgrade Buy Hold
UTEK Ultratech Downgrade Sell Hold
VVC Vectren Upgrade Buy Hold
ZION Zions Bancorp Downgrade Hold Buy
ZRAN Zoran Upgrade Buy Hold
DLA Delta Apparel Downgrade Hold Buy
MOSY Mosys Downgrade Sell Hold
WCG Wellcare Healthplans Downgrade Hold Buy
FCLF First Clover Leaf Downgrade Hold Buy
MSSR McCormick & Shmicks Downgrade Hold Buy
ATB Arlington Tankers Upgrade Buy Hold
FRP Fairpoint Communications Downgrade Hold Buy
FTD FTD Group Downgrade Hold Buy
WXS Wright Express Downgrade Hold Buy
KRNY Kearny Financial Downgrade Sell Hold
PSBC Pacific State Bancorp Downgrade Hold Buy
FRZ Reddy Ice Holdings Downgrade Hold Buy
TRAK Dealertrack Holdings Downgrade Sell Hold
FBIZ First Business Financial Downgrade Sell Hold
DCP Dyncorp International Upgrade Hold Sell
CLMT Calumet Specialty Products Downgrade Sell Hold
OIIM 02Micro International Upgrade Buy Hold
Source: TheStreet.com Ratings