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 a rating alone cannot tell the whole story, and that it should be part of an investor's overall research.

The following ratings changes were made on Feb. 1, 2008.

Dollar Financial ( DLLR), a financial services provider, has been upgraded to hold. The company shows strong revenue growth, notable return on equity and compelling improvement in net income. However, the stock has not performed very well and the company has inadequately managed debt.

On Jan. 31, Dollar announced earnings for its second-quarter fiscal 2008. The company posted earnings of $13 million, or 52 cents a share, vs. a loss of $52.4 million, or $2.23 a share, in the year-ago quarter.

Revenue growth, at 26%, has slightly outpaced the industry average. Year over year, Dollar's return on equity has greatly increased and exceeds that of the S&P 500, which signals significant strength within the corporation. Although the company has reported somewhat volatile earnings recently, it should see EPS growth in the coming year.

Dollar's share price has declined significantly over the past year, but it still sells for more than most others in its industry. Although the company's debt-to-equity ratio of 3.45 is very high, it is currently less than that of the industry average. Dollar Financial had been rated sell since Feb. 1, 2007.

Morningstar ( MORN - Get Report), an investment research company, has been upgraded to buy.

The company's strengths include robust revenue growth, a solid financial position, impressive EPS growth and expanding profit margins. These strengths outweigh the fact that the company is trading at a premium valuation.

Morningstar has no debt to speak of, resulting in a debt-to-equity ratio of zero, a relatively favorable sign. The company also maintains a quick ratio of 1.40, showing an ability to avoid short-term cash problems. The company has demonstrated a pattern of positive EPS growth over the past two years, and this trend should continue. During the past fiscal year, Morningstar earned $1.10 a share, vs. 70 cents a share in the prior year. This year, the market expects an improvement in earnings to $1.56.

Amylin Pharmaceuticals ( AMLN) has been downgraded to sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, generally weak debt management, disappointing return on equity, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

On Jan. 28, Amylin reported earnings for the fourth quarter of 2007. The company posted a loss of $77 million, or 57 cents a share, compared with a loss of $58.4 million, or 45 cents a share, in 2006, underperforming the S&P 500 and falling drastically behind the biotech sector average. During the past fiscal year, Amylin continued to lose money by losing $1.59 a share, vs. a loss of $1.80 a share in the prior year. For the next year, the market is expecting a 22% contraction in earnings to a loss of $1.94 a share.

This poor performance is reflected in the company's share price, which is down 24%. The stock is now cheaper than others in its industry, but that is reason enough to justify a buy rating at this time. Amylin's debt-to-equity ratio of 1.63 is quite high overall and when compared to the industry average, suggesting that the company's debt management should be re-evaluated. Despite the company's weak debt-to-equity ratio, the company has managed to keep a very strong quick ratio of 4.19, which shows the ability to cover short-term cash needs. Amylin had been rated hold since July 24, 2007.

Tesoro ( TSO), which refines and markets petroleum products in the U.S., has been downgraded to hold. The company shows robust revenue growth and reasonable valuation levels. However, weaknesses include deteriorating net income, poor profit margins and disappointing return on equity.

On Jan. 31, Tesoro swung to a fourth-quarter 2007 loss of $40 million, or 29 cents a share, from a profit of $158 million, or $1.14 a share. Its impressive revenue growth, at 63%, greatly exceeded the industry average of 4.6%. However, top-line growth has not resulted in EPS gains. The company's year-over-year net income growth has significantly underperformed the S&P 500 and the oil, gas and consumable fuels industry. However, the consensus estimate suggests that this trend should reverse in the coming year. Tesoro's gross profit margin is currently extremely low at 2.10% and has decreased year over year. In addition, its net profit margin significantly lags the industry average. Tesoro had been rated buy since TheStreet.com Ratings initiated coverage on Jan. 31, 2006.

Uranium Resources ( URRE), a mining company, has been downgraded to sell. Among the areas we feel are negative, one of the most important has been an overall disappointing return on equity.

Uranium Resources' return on equity has greatly decreased year over year. This is a signal of major weakness within the corporation. Uranium Resources' return on equity significantly trails both the industry average and the S&P 500.

This stock has increased by 42.28% over the past year, outperforming the rise in the S&P 500 Index during the same period. Despite the stock's nice gains in the past year, we feel that the risks surrounding an investment in this stock outweigh any potential future returns. Uranium Resources had been rated hold since Nov. 19, 2007.

Additional ratings changes from Feb. 1 are listed below.

TheStreet.com Ratings Changes
Ticker Company Name Change New Rating Former Rating
AMLN AMYLIN PHARMACEUTICALS INC Downgrade Sell Hold
ANST ANSOFT CORP Downgrade Hold Buy
CNQR CONCUR TECHNOLOGIES INC Downgrade Hold Buy
CCK CROWN HOLDINGS INC Upgrade Buy Hold
DWCH DATAWATCH CORP Downgrade Hold Buy
RE EVEREST RE GROUP LTD Downgrade Hold Buy
GVA GRANITE CONSTRUCTION INC Downgrade Hold Buy
SIM GRUPO SIMEC SA DE CV Upgrade Buy Hold
QSFT QUEST SOFTWARE INC Downgrade Hold Buy
RADN RADYNE CORP Downgrade Hold Buy
TSO TESORO CORP Downgrade Hold Buy
TLGD TOLLGRADE COMMUNICATIONS INC Downgrade Sell Hold
URRE URANIUM RESOURCES INC Downgrade Sell Hold
WBSN WEBSENSE INC Downgrade Sell Hold
AUO AU OPTRONICS CORP Upgrade Buy Hold
CHEV CHEVIOT FINANCIAL CORP Downgrade Sell Hold
DLLR DOLLAR FINANCIAL CORP Upgrade Hold Sell
MORN MORNINGSTAR INC Upgrade Buy Hold
BDE BOIS D ARC ENERGY INC Upgrade Buy Hold
TDS.S TELEPHONE & DATA SYSTEMS INC Downgrade Hold Buy
DMND DIAMOND FOODS INC Upgrade Buy Hold
ITC ITC HOLDINGS CORP Upgrade Buy Hold
WU WESTERN UNION CO Upgrade Hold Sell

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