Each business day, 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. However, the rating does not incorporate all of the factors that can alter a stock's performance. For example, it doesn't always factor in recent corporate or industry events that could affect the stock price, nor does it include recent technology developments and competitive dynamics that may affect the company. For those reasons, we believe that a rating alone cannot tell the whole story and that it should be part of an investor's overall research. Big Lots ( BIG), a discount retailer, has been downgraded to hold. The company's strengths can be seen in several areas, including impressive growth in net income and EPS and notable return on equity. However, the company is also contending with weak operating cash flow, and the performance of the stock itself has been generally disappointing. Third-quarter net income soared to $14.30 million, or 14 cents a share, from $1.7 million, or 2 cents a share, a year earlier. (The year-earlier figure reflects a charge related to litigation.) The company has demonstrated a pattern of positive EPS growth over the past two years, and this trend is expected to continue. Revenue slipped 2% to $1.03 billion. The stock share price has fallen 47% over the past year, but this should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, TheStreet.com Ratings believes that it is too soon to buy. Big Lots had been rated buy since February 2006. First Niagara Financial Group ( FNFG), the holding company for First Niagara Bank, has been downgraded to hold. While the company has reported revenue growth and expanding profit margins, it has also experienced unsatisfactory return on equity and a generally disappointing stock performance. Third-quarter net income totaled $21 million, or 21 cents a share, down from the year-ago figure of $23.6 million, or 22 cents a share. The company said that the overall loan portfolio continued to be free of any systemic weakness, and First Niagara has no exposure to subprime or Alt-A loans. Return on equity was down slightly from a year earlier but still outperformed the thrifts & mortgage results. Net operating cash flow has decreased to $55.94 million, or 27.86% from a year ago. First Niagara Financial Group had been rated buy since September. Infineon Technologies AG ( IFX), a German semiconductor company, has been downgraded to sell. The company has struggled with feeble EPS growth, deteriorating net income, unsatisfactory return on equity, poor profit margins and the performance of the stock itself has been generally disappointing. The net loss for the fiscal year widened to 280 million euros ($409 million), reflecting the sale of its 86% stake in DRAM maker Qimonda ( QI), in 2006. EPS has declined over the past two years, and this is expected to continue in the coming year. The company has significantly underperformed compared with the semiconductors & semiconductor equipment industry. The stock has tumbled 28% over the past year; this is positive for future investors, making it cheaper (in proportion to its earnings) than most other stocks in its industry. But due to other concerns, TheStreet.com Ratings feels the stock is still not a good buy right now. Infineon Technologies had been rated hold since December. Silicon Laboratories ( SLAB), a mixed-signal integrated circuit company, has been downgraded to hold. The company maintains a largely solid financial position with reasonable debt levels by most measures and has had compelling growth in net income and revenue. Still, the performance of the stock itself has been generally disappointing. Moreover, the company has struggled with unsatisfactory return on equity and weak operating cash flow. Third-quarter net income totaled $40.4 million, or 36 cents a share, compared with $4.7 million, or 5 cents a share, a year ago. Excluding items, Silicon Labs earned 43 cents a share. The company has reported somewhat volatile earnings recently, but it seems poised for EPS growth in the coming year. Its stock price is off 5.15% from a year ago, reflecting the general market trend and ignoring their higher EPS compared with a year ago. There does not seem to be anything in this company's numbers that would change the one-year trend. Silicon Laboratories had been rated buy since October.