Each business day, TheStreet.com Ratings updates its ratings on the stocks it covers. The proprietary ratings model projects a stocks total return potential over a 12-month period, including both prices 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 August 6.

Fitness club operator Town Sports International ( CLUB) has been upgraded to hold. Its return on equity has significantly exceeded both the industry average and the S&P 500. Net operating cash flow has increased 100% to $37 million compared with the same quarter one year prior. Compared with last year, the stock share price is down 47%. At 27% the gross profit margin is also lower than desirable but has increased from the same quarter last year. Debt-to-equity ratio is very high at 45.3, implying that there is very poor management of debt levels within the company. Town Sports had been rated sell since ratings were initiated on July 3, 2007.

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