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 generated on March 17.

Foundry Networks ( FDRY), a provider of enterprise and service provider switching, routing, security and Web traffic management, has been downgraded to hold. Strengths such as robust revenue growth and increasing earnings per share are countered by a disappointing stock-price performance. For the fourth quarter, revenue rose 28% year over year to $168.7 million, and EPS climbed to 18 cents from 10 cents over the same period. For 2008, the market expects an improvement in full-year EPS to 88 cents from 52 cents for 2007. Net operating cash flow has increased 13% to $48.65 million from the year-ago quarter, but the company's cash flow growth rate lags the industry average. Return on equity has improved to 7.7% from 4% year over year. However, Foundry Networks' return on equity lags the industry average. Shares have fallen 22% in the past year, but with a price-to-earnings ratio of 21.29, the stock is not much cheaper than others in its industry. Foundry Networks had been rated buy since July 31.

National Instruments ( NATI), a maker of instrumentation software and specialty computer plug-in cards and accessories, has been downgraded to hold. Strong revenue growth, a solid financial and notable return on equity are balanced by a decline in share price over the past year. For the fourth quarter, revenue increased 13% year over year to $204.8 million and EPS rose to 56 cents from 30 cents in the same period. The company has no debt to speak of and a quick ratio of 3.35, which clearly demonstrates the ability to cover short-term cash needs. Net operating cash flow has increased 27% to $33.7 million from the year-ago quarter, but National Instruments is still growing at a slower pace than the industry average.

Share price hasn't changed much in the past year. Turning toward the future, the fact that the stock has come down in price over the past year 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, we believe that it is too soon to buy. National Instruments had been rated buy since TheStreet.com Ratings initiated coverage on March 14, 2006.

Oshkosh Corp. ( OSK), a maker of specialty vehicles and vehicle bodies, has been downgraded to hold. Strengths including robust revenue growth, reasonable valuation levels and good cash flow from operations are weighed down by unimpressive growth in net income, poor debt management and disappointing profit margins. For the first quarter, revenue jumped 49% year over year to $1.5 billion, but EPS fell to 50 cents from 55 cents in the same period. Oshkosh's debt-to-equity ratio is very high at 2.13 and exceeds the industry average. With a quick ratio of 0.66, the company does not have a strong ability to cover short-term cash needs. Although the stock has a P/E of 10.54, which makes it cheaper than others in its industry, we do not believe it is a good buy at this time. Oshkosh Corp. had been rated buy since TheStreet.com Ratings initiated coverage on March 14, 2006.

SRA International ( SRX). A provider of technology and strategic consulting services, has been downgraded to hold. Strong revenue growth, a solid financial position and good cash flow from operations are balanced by disappointing return on equity, a declining stock price and poor profit margins. For the second quarter of fiscal 2008, revenue grew 19% year over year to $382 million, and EPS grew to 30 cents from 29 cents. This year, the market expects an improvement in full-year EPS to $1.24 from $1.09 in the past year. The company's debt-to-equity ratio is very low at 0.07, and its quick ratio of 1.94, demonstrates an ability to cover short-term liquidity needs. Share price has not changed very much in the past year. Despite the past decline, the stock is still selling for more than most others in its industry. SRA International had been rated buy since Sept. 14, 2006.

Liz Claiborne ( LIZ), a retailer of apparel, accessories, and fragrance products, has been downgraded to sell. For the fourth quarter, revenue decreased 3.2% year over year to $1.21 billion, and net income swung to a loss of $435.7 million from a profit of $73.2 million. EPS fell to a loss of $4.43 a share from a profit of 65 cents. Return on equity has significantly decreased from the year-ago period, and net operating cash flow has decreased 12% to $379.7 million. Shares have tumbled 61% in the past year. Liz Claiborne had been rated hold since May 2.

Additional ratings changes from March 17 are listed below.

Ticker Company Name Change New Rating Former Rating
BNT BENTLEY PHARMACEUTICALS Upgrade Buy Hold
ISEE EMERGING VISION INC Upgrade Hold Sell
ESLR EVERGREEN SOLAR INC Downgrade Sell Hold
FDRY FOUNDRY NETWORKS INC Downgrade Hold Buy
HE HAWAIIAN ELECTRIC INDS Upgrade Buy Hold
LB LA BARGE INC Downgrade Hold Buy
LEH LEHMAN BROTHERS HOLDINGS INC Downgrade Hold Buy
LIZ LIZ CLAIBORNE INC Downgrade Sell Hold
MATR MATRIA HEALTHCARE INC Downgrade Hold Buy
MOV MOVADO GROUP INC Downgrade Hold Buy
NATI NATIONAL INSTRUMENTS CORP Downgrade Hold Buy
OSK OSHKOSH CORP Downgrade Hold Buy
PKD PARKER DRILLING CO Downgrade Hold Buy
POZN POZEN INC Downgrade Sell Hold
REXI RESOURCE AMERICA INC Downgrade Sell Hold
SRX SRA INTERNATIONAL INC Downgrade Hold Buy
QLTY QUALITY DISTRIBUTION INC Downgrade Sell Hold
EGR COMMERCE ENERGY GROUP INC Downgrade Sell Hold
FMR FIRST MERCURY FINANCIAL CORP Downgrade Sell Hold
SUSS SUSSER HOLDINGS CORP Downgrade Sell Hold

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

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