|Ticker||Company Name||Change||New Rating||Former Rating|
|MPP||MTS Medication Technologies||Downgrade||Hold||Buy|
|SPAN||Span-America Medical Systems||Upgrade||Buy||Hold|
|TCHC||21st Century Holding||Downgrade||Hold||Buy|
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 May 27. Allergan ( AGN), a pharmaceutical and medical device company, has been downgraded to hold. Strengths such as robust revenue growth and improving earnings per share are countered by a disappointing stock-price performance and weak operating cash flow. For the first quarter, revenue increased 23% year over year to $1.08 billion and earnings per share climbed to 36 cents from 15 cents. For 2008, the market expects an improvement in full-year EPS to $2.59 from $1.62 in 2007. The company's debt-to-equity ratio of 0.43 is low but exceeds the industry average. Its quick ratio of 2.43 demonstrates strong liquidity. Net operating cash flow has decreased 60% year over year to $42.1 million. In addition, when comparing to the industry average, the firm's growth rate is much lower. Shares have fallen 12% in the last year. The decline has netted the stock a price-to-earnings ratio of 29.43, which means it trades at a premium to others in its sector. Allergan had been rated buy since June 29, 2007. Ennis ( EBF), which produces and sells business forms and business products, has been upgraded to buy. For the fourth quarter, revenue improved 9.8% year over year to $149.5 million, and earnings per share grew to 43 cents from 30 cents. For 2008, the market expects an improvement in full-year EPS to $1.81 from $1.73 a year ago. Although the company's debt-to-equity ratio of 0.26 is very low, it is currently higher than that of the industry average. Its quick ratio of 1.46 illustrates and ability to avoid short-term cash problems. With a price-to-earnings ratio of 10.35, the stock trades at a discount to others in its industry. Ennis had been rated hold since Jan. 23. C&D Technologies ( CHP), which together with its subsidiaries manufactures electrical power storage systems, has been upgraded to hold. Strengths such as robust revenue growth and impressive EPS improvement are balanced by poor debt management, weak operating cash flow and poor profit margins. For the fourth quarter, revenue climbed 23% year over year to $94.5 million, and loss per share narrowed to 24 cents from 46 cents. For 2008, the market expects an improvement in full-year EPS to a 17-cent profit from an 18-cent loss. The debt-to-equity ratio of 1.88 is quite high. Along with the unfavorable debt-to-equity ratio, the company maintains a poor quick ratio of 0.90, which illustrates the inability to avoid short-term cash problems. C&D Technologies had been rated sell since TheStreet.com Ratings initiated coverage on May 23, 2006. MTS Medication Technologies ( MPP), which makes and sells consumable medication punch cards, packaging equipment and ancillary products, has been downgraded to hold. Strengths such as robust revenue growth, reasonable valuation levels and good cash flow from operations are held back by poor debt management and a disappointing stock-price performance. For the third quarter of 2007, revenue rose 18% year over year to $14.7 million, and earnings per share swung to a profit of 9 cents from a loss of 63 cents. The company's debt-to-equity ratio of 1.01 is relatively high when compared with the industry average, suggesting a need for better debt-level management. Its quick ratio of 0.98 illustrates an inability to avoid short-term cash problems. Shares have fallen 28% in the past year, netting the stock a price-to-earnings ratio of 23.13, which means it trades at a discount to others in its sector. BigBand Networks ( BBND), which sells network-based hardware and software platforms to cable operators and telephone companies, has been downgraded to sell. For the first quarter, revenue declined 24% year over year to $39.9 million, and the net loss per share widened to 3 cents from 2 cents. For 2008, the market expects an improvement in full-year EPS to a 9-cent profit from a 44-cent loss in 2007. Gross profit margin is rather high at 60%. However, the negative net profit margin of 4.8% significantly underperformed the industry average. Return on equity also significantly trails the industry average. BigBand Networks had been rated hold since TheStreet.com Ratings initiated coverage on May 2. Additional ratings changes from May 27 are listed below.