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 April 14.

BJ Services ( BJS), which provides pressure pumping and oilfield services for the petroleum industry, has been upgraded to buy. For the first quarter of 2008, revenue increased 8.5% year over year to $1.29 billion. The company's growth was driven by an increase in sales from the Oilfield Services Group segment, which generated 19% growth to $212.7 million. The company's debt-to-equity ratio improved to 0.21 from 0.23, indicating a sound debt strategy.

Recently, the company signed a pre-acquisition agreement to buy the Innicor Subsurface Technologies, a Canada-based manufacturer of completion and downhole tools and equipments. Looking to the second quarter, BJ Services anticipates continued high demand for its services, especially in gas shale areas in Arkansas, the Rockies, and the Mid-Continent region. In addition, Canadian drilling activity is projected to increase as the company enters the winter drilling season.

Furthermore, the company anticipates increased revenue and improved margins in the International Pressure Pumping segment. Risks to the buy rating include uncertainty in North America activity; the growth rate in drilling activity has slowed. Additionally, the company faces challenges from declining margins and earnings, which may restrict future earnings potential. BJ Services had been rated hold since Jan. 15.

Goldman Sachs ( GS - Get Report), a provider of investment banking, securities and investment management solutions, has been downgraded to hold. Strengths such as an attractive valuation, expanding profit margins and notable return on equity are balanced by poor debt management, weak operating cash flow and a disappointing stock-price performance. The company's gross profit margin is high at 68% and has increased from the year-ago quarter.

For the first quarter, revenue fell 16% year over year to $18.63 billion, and earnings per share decreased to $3.23 from $6.67. The debt-to-equity ratio is very high at 16.75 and currently higher than the industry average, implying that there is very poor management of debt levels within the company. Net operating cash flow has decreased 62% from the year-ago quarter the company's cash-flow growth rate trails the industry average. Goldman Sachs had been rated buy since Oct. 2.

SkyWest ( SKYW - Get Report), which operates regional airlines in the U.S., has been downgraded to hold. Strengths such as revenue growth, improvement in earnings per share and an increase in net income are countered by weak operating cash flow, poor profit margins and a disappointing stock-price performance.

For the fourth quarter of 2007, revenue increased 8.3% year over year to $854.7 million, and earnings per share improved to 66 cents from 48 cents. For 2008, the market expects an improvement in full-year EPS to $2.70 from $2.49 in 2007. The debt-to-equity ratio is high at 1.49 but trails the industry average, suggesting that this level of debt is acceptable within the airlines industry. Furthermore, the company's quick ratio of 1.92 is high and demonstrates strong liquidity.

The gross profit margin is rather low at 20% and has decreased from the same quarter the previous year. However, the net profit margin of 4.8% is above the industry average. Net operating cash flow has decreased 78% year over year to $29.9 million. In addition, when comparing to the industry average, the firm's growth rate is much lower. SkyWest had been rated buy since TheStreet.com Ratings initiated coverage on April 11, 2006.

PMI Group ( PMI), which provides a range of financial products for residential mortgages, public finance obligations, and asset-backed securities, has been downgraded to sell. For the fourth quarter of 2007, the company swung to a loss of $1.01 billion from $100.5 million in the year-ago quarter. Return on equity has greatly decreased year over year and trails the industry average, a signal of major weakness within the corporation.

Net operating cash flow has declined marginally to $127.3 million. Shares have tumbled 88% in the past year. In conjunction with the decline, earnings per share fell to a loss of $12.51 from a profit of $1.19. For 2008, the market expects an improvement in full-year EPS to a loss of $4.17 from a loss of $11.44 in 2007. PMI Group had been rated hold since Aug. 1.

Redhook Ale Brewery ( HOOK), which brews, markets and sells craft beers in the U.S., has been downgraded to sell. The company shows a declining pattern in earnings per share over the past two years. In 2007, full-year earnings swung to a loss of 11 cents from a profit of 5 cents in 2006.

For the fourth quarter, Redhook widened its loss to $860,000 from $10,000 a year ago. Return on equity has slightly decreased year over year and trails the industry average, implying a minor weakness in the organization. Gross profit margin is also extremely low at 12%, while a negative net profit margin of 8.6% significantly lags the industry average.

Net operating cash flow has fallen to a loss of $490,000 from the year-ago quarter. In addition, when comparing to the industry average, the firm's growth rate is much lower. Redhook Ale Brewery had been rated hold since July 18.

Additional ratings changes from April 14 are listed below.

Ticker Company Name Change New Rating Former Rating
ATRO ASTRONICS CORP Downgrade Hold Buy
BJS BJ SERVICES CO Upgrade Buy Hold
GS GOLDMAN SACHS GROUP INC Downgrade Hold Buy
PCCC PC CONNECTION INC Downgrade Hold Buy
PMI PMI GROUP INC Downgrade Sell Hold
HOOK REDHOOK ALE BREWERY INC Downgrade Sell Hold
SKYW SKYWEST INC Downgrade Hold Buy
SNCI SONIC INNOVATIONS INC Downgrade Sell Hold
SPAR SPARTAN MOTORS INC Upgrade Buy Hold
WPCS WPCS INTERNATIONAL INC Downgrade Hold Buy

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