Each businessday, 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.

Fujifilm Holdings ( FUJI) sells color films, digital cameras, photofinishing equipment and color paper. It has been upgraded to buy from hold.

The company's revenue grew by 16.5% in the second quarter of its fiscal 2008 compared with the same period last year, and its debt-to-equity ratio of 0.18 is currently below the industry average. This suggests that there has been very successful management of debt levels. After a year of stock price fluctuations, Fujifilm's stock price has gone up only by 1.34% in the last 12 months, with weak earnings growth likely the most significant factor in this flat result. However, unless broad bear market conditions prevail, TheStreet.com Ratings see more upside potential for this stock. Fujifilm had been rated a hold since July 2007.

Epoch Holding ( EPHC) offers investment management and investment advisory services. It has been upgraded to buy from hold.

The company's revenue rose 82.4% in the first quarter of fiscal 2008 compared with the same period last year, and Epoch has no debt to speak of, a relatively favorable sign. The company's return on equity greatly increased in the first quarter compared with the same period last year, a signal of significant strength within the corporation. It swung to a profit of $2.10 million in the first quarter from a loss of $1.04 million in the same period last year. Epoch was downgraded to hold on Dec. 4 on the basis of fluctuations in its stock price, prior to which it had been rated a buy since September 2007.

Worthington Industries ( WOR) is a diversified metal processing company that operates through three segments: steel processing, metal framing and pressure cylinders. It has been downgraded to hold from buy.

The company's strengths include good cash flow from operations and its largely solid financial position with reasonable debt levels by most measures. Worthington's revenue dropped by 2.1% in the second quarter of its fiscal 2008, trailing the industry average growth rate of 35.3%. Its second-quarter earnings fell 41.9% to 18 cents per share from 31 cents a share in the same period last year, continuing a two-year pattern of declining earnings results. This trend is likely to continue in the upcoming year. Worthington had been rated a buy since December 2005.

Micron Technology ( MU) makes and markets semiconductor devices around the world. It has been downgraded to sell from hold.

The company lost $262 million in the first quarter of its fiscal year compared with a profit of $115 million in the same period last year, and its return on equity greatly decreased over the same time frame. This is a sign of major weakness within the corporation. Micron's stock price has tumbled by 44.19% in the past 12 months. In one sense this sharp decline is a positive for future investors, making the stock cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But because of other concerns, including those mentioned above, TheStreet.com Ratings feel the stock is still nto a good buy right now. Micron had been rated a hold since March 2007.

TheStreet.com Ratings has initiated coverage of Spirit Aerosystems, a designer and manufacturer of aero-structures. It has been rated a hold.

Spirit's third-quarter revenue increased by 16.6% compared with the same period last year, outpacing the industry average of 8.5%. The company's stock price has gone up by 9.48% in the last 12 months, reflecting both the market's overall trend and the fact that the company's earnings growth has been robust. In addition, its debt-to-equity ratio of 0.53 is below that of the industry average, implying that there has been successful management of debt levels. Despite its low debt-to-equity ratio, its quick ratio of 0.69 displays a potential problem in covering short-term cash needs. The company's profit margins have also been poor overall.

Additional ratings changes are listed below.
Stock Upgrades, Downgrades
Company Name Ticker Change New Rating Former Rating
Forward Industries FORD Downgrade Sell Hold
Fujifilm Holdings FUJI Upgrade Buy Hold
Epoch Holding EPHC Upgrade Buy Hold
Micron Technology MU Downgrade Sell Hold
Sigmatron International SGMA Downgrade Hold Buy
Worthington Industries WOR Downgrade Hold Buy
American Community Bancshares ACBA Downgrade Hold Buy
American River Bankshares AMRB Downgrade Hold Buy
Cavco Industries CVCO Downgrade Hold Buy
American Caresource Holdigs XSI Downgrade Sell Hold
Community Valley Bancorp CVLL Downgrade Hold Buy
Spirit Aerosystems SPR Initiation Hold n/a
Willdan Group WLDN Initiation Sell n/a
Source: TheStreet.com Ratings


This article was written by a staff member of TheStreet.com Ratings.

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