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 June 23.

IHS ( IHS) -- which provides critical information and decision-support tools to customers in the energy, defense, aerospace, construction and electronics industries -- has been upgraded to buy. IHS' revenue growth has slightly outpaced the industry average of 27%. Quarterly revenue grew 34% over a year ago. During the past fiscal year, IHS increased its bottom line by earning $1.39 a share vs. $1.03 in the prior year. This year, the market expects an improvement in earnings ($1.93 vs. $1.39).

Its net income increased by 25% when compared to the same quarter one year prior, rising from $18.58 million to $23.26 million. Net operating cash flow has increased to $62.49 million, or 46% when compared with the same quarter last year. In addition, IHS has also modestly surpassed the industry average cash-flow growth rate of 40%.

We feel that the stock's sharp appreciation over the last year has driven it to a price level that is now somewhat expensive compared with the rest of its industry. The other strengths this company shows, however, justify the higher price levels. IHS had been rated a hold since May 2008.

Associated Banc ( ASBC) has been downgraded to a hold rating. The bank holding company offers various banking and nonbanking financial services to individuals, businesses and governments and municipalities in Wisconsin, Minnesota, Illinois, Arizona, California, Nevada and Vermont.

The gross profit margin for Associated Banc is rather high, at 59%. Regardless of ASBC's high profit margin, it has managed to decrease from the same period last year. ASBC's net profit margin of 18% compares favorably with the industry average. Its earnings per share declined by 8.8% in the most recent quarter compared with the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year.

During the past fiscal year, Associated Banc reported lower earnings of $2.23 a share, vs. $2.38 in the prior year. For the next year, the market is expecting a contraction of 9.4% in earnings ($2.02 vs. $2.23). Net operating cash flow has significantly decreased to $87.12 million, or 76% when compared with the same quarter last year. ASBC had been rated a buy since May 2008.

Gold Fields ( GFI) engages in the exploration, extraction, processing and smelting of gold in South Africa, Ghana, Australia and Peru. GFI has been downgraded to hold.

GFI reported significant improvement in earnings per share in the most recent quarter compared to the same quarter a year ago. During the past fiscal year, Gold Fields increased its bottom line by earning 59 cents a share, vs. 47 cents in the prior year. This year, the market expects an improvement in earnings (63 cents vs. 59 cents). Net income increased by 170% when compared with the same quarter one year ago, rising from $104 million to $281.1 million.

Gold Fields' gross profit margin is 36%, which we consider to be strong. Despite any rallies, the net result is that it is down by 33%, which is also worse that the performance of the S&P 500. The company's current return on equity has slightly decreased from the same quarter one year ago. This implies a minor weakness in the organization.

When compared with other companies in the metals and mining industry and the overall market, Gold Fields' return on equity is below that of both the industry average and the S&P 500. GFI had been rated a buy since February 2008.

PS Business Parks ( PSB), a real estate investment trust (REIT), has been downgraded to hold. The company, together with its subsidiaries, acquires, develops and owns and operates commercial properties, primarily multi-tenant flex, office and industrial space.

Since the same quarter a year ago, revenue increased by a slight 5%. PSB's debt-to-equity ratio is very low at 0.05, which is currently below the industry average, implying that the company has been successful in managing debt levels. Net operating cash flow has slightly increased to $49.46 million, or 3.25% when compared with the same quarter last year. The gross profit margin for PS Business Parks is currently lower than desirable, coming in at 29%. It has decreased from the same quarter the previous year.

The share price of PS Business Parks is down 10% when compared to where the stock was trading one year earlier. This reflects both the trend in the overall market as well as the sharp decline in the company's earnings per share. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. PSB has been rated a buy since May 2008.

GFI Group ( GFIG) -- which through its subsidiaries, provides brokerage services, market data and analytics software products -- has been downgraded to hold.

Its current debt-to-equity ratio, 0.53, is below the industry average, implying successful management of debt levels. The gross profit margin for GFI Group is rather low, at 21%. Regardless of GFIG's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, GFIG's net profit margin of 12% compares favorably with the industry average.

GFIG's stock share price has performed poorly compared to where it was a year ago. Despite any rallies, the net result is that the stock is down by 49%, which is also worse that the performance of the S&P 500. 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. GFIG had been rated a buy since July 2007.

Additional ratings changes are listed below.

Ticker Company Name Change New Rating Former Rating
ADC Agree Realty Downgrade Hold Buy
ALLI Allion Healthcare Upgrade Hold Sell
ASBC Associated Banc Downgrade Hold Buy
BGS B&G Foods Initiated Hold
CPD Caraco Pharmaceutical Labs Downgrade Hold Buy
CTIB CTI Industries Upgrade Hold Sell
DMND Diamond Foods Upgrade Buy Hold
DPW Digital Power Downgrade Sell Hold
FBFS Firstbank Financial Srvc Downgrade Sell Hold
FBNC First Bancorp/NC Downgrade Hold Buy
FISI Financial Institutions Downgrade Hold Buy
FORTY Formula Systems (1985) LTD Downgrade Hold Buy
FREE Freeseas Initiated Hold
GAIT Langer Downgrade Sell Hold
GFI Gold Fields Downgrade Hold Buy
GFIG GFI Group Downgrade Hold Buy
GPI Group 1 Automotive Downgrade Hold Buy
GRIL Grill Concepts Downgrade Sell Hold
GROW U S Global Investors Upgrade Buy Hold
GSVI GSV Upgrade Hold Sell
HBE Henry Bros Electronics Upgrade Buy Hold
HFBN Hampshire First Bank/NH Initiated Sell
HL Hecla Mining Downgrade Hold Buy
IG IGI Laboratories Upgrade Hold Sell
IHS IHS INC Upgrade Buy Hold
IPII Imperial Industries Downgrade Sell Hold
MNKB Monadnock Bancorp Downgrade Sell Hold
NTE Nam Tai Electronic Upgrade Buy Hold
OFI Overhill Farms Upgrade Buy Hold
PSB PS Business Parks Downgrade Hold Buy
PWDR Powder River Petroleum Downgrade Sell Hold
REGN Regeneron Pharmaceut Downgrade Sell Hold
RRR RSC Holdings Initiated Sell
TRU Torch Energy Royalty Trust Upgrade Buy Hold
TSU Tim Participacoes Sa Downgrade Hold Buy
WATG Wonder Auto Technology Upgrade Buy Hold
WFBC Willow Financial Bancorp Downgrade Sell Hold
WYNN Wynn Resorts Downgrade Hold Buy
XFN Xfone Downgrade Hold Buy
This article was written by a staff member of TheStreet.com Ratings.

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