The following ratings changes were generated on Monday, Oct. 20.

We've downgraded Gentex ( GNTX), which designs, develops, manufactures and markets proprietary products employing electro-optic technology, from buy to hold. Strengths include its revenue growth, largely solid financial position with reasonable debt levels by most measures and notable return on equity. Weaknesses include a generally disappointing performance in the stock itself, premium valuation and weak operating cash flow.

Gentex's revenue growth of 4.3% since the same quarter one year ago slightly outpaced the industry average of 2.4%, but EPS declined. The company has no debt to speak of, resulting in a debt-to-equity ratio of zero. It also maintains a quick ratio of 6.42, clearly demonstrating its ability to cover short-term cash needs. Its gross profit margin of 39.8% is strong but is a decrease from the same period last year. Its net profit margin of 15.8% significantly outperformed the industry. Net operating cash flow has decreased to $16.67 million, or 25.40% when compared with the same quarter last year. In addition, its growth rate is much lower than the industry average.

We've downgraded global investment banking and securities firm Goldman Sachs ( GS) from buy to hold. Strengths include its reasonable valuation levels, good cash flow from operations and expanding profit margins. Weaknesses include generally poor debt management, deteriorating net income and a generally disappointing performance in the stock itself.

Net operating cash flow has significantly increased by 113.75% to $2,613.00 million when compared with the same quarter last year, but it is still lower than the industry average growth rate of 159.85%. Goldman's gross profit margin of 64.9% is rather high, but it is a decrease from the same period last year. Net profit margin of 6.2% compares favorably with the industry average.

The debt-to-equity ratio is very high at 12.95 and currently higher than the industry average, implying very poor management of debt levels within the company. Shares are down 49.79% on the year, underperforming the S&P 500. Consistent with the plunge in the stock price, the company's earnings per share are down 70.47% compared with the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor, and in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.

We've downgraded Honeywell International ( HON), a technology and manufacturing company, from buy to hold. Strengths include its revenue growth, notable return on equity and impressive record of earnings per share growth. Weaknesses include a generally disappointing performance in the stock itself, generally poor debt management and weak operating cash flow.

Honeywell's 6.2% revenue growth since the same quarter one year ago slightly outpaced the industry average of 0.4%, helping to boost EPS, which rose by 19.8% in the most recent quarter compared with the same quarter last year. We feel its two-year pattern of positive EPS growth should continue, suggesting improving business performance. During the past fiscal year, Honeywell increased its bottom line, earning $3.16 vs. $2.52 in the prior year. This year, the market expects further improvement to $3.82.

The company's debt-to-equity ratio of 0.96 is somewhat low overall but is high compared with the industry average, implying that the management of the debt levels should be evaluated further. The 0.68 quick ratio is low and demonstrates weak liquidity. Shares have plunged 51.62% on the year, underperforming the S&P 500. The fact that the stock has come down in price over the past year could help make the stock attractive down the road, but for now, we believe that it is too soon to buy.

We've downgraded Pepsi Bottling Group ( PBG), believed to be the world's largest manufacturer, seller and distributor of Pepsi-Cola beverages, from buy to hold. Strengths include its revenue growth, attractive valuation levels and expanding profit margins. Weaknesses include generally poor debt management, weak operating cash flow and a generally disappointing performance in the stock itself.

Since the same quarter one year prior, revenue slightly increased by 2.3% but still underperformed the industry average of 8.9%, and EPS declined by 5.3% in the most recent quarter compared with the same quarter a year ago. Though the company has reported somewhat volatile earnings recently, we think it is poised for EPS growth in the coming year. During the past fiscal year, PBG increased its bottom line, earning $2.29 vs. $2.16 in the prior year. This year, the market expects further improvement to $2.37.

Net operating cash flow has decreased to $628.00 million, or 12.29% when compared with the same quarter last year. The debt-to-equity ratio is very high at 2.30 and currently higher than the industry average, implying very poor management of debt levels within the company. PBG also has a quick ratio of 0.56, demonstrating the lack of ability of the company to cover short-term liquidity needs.

We've downgraded Staples ( SPLS), which operates 1,780 office superstores, from buy to hold. Strengths include its revenue growth, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. Weaknesses include a decline in the stock price during the past year, poor profit margins and weak operating cash flow.

Revenue growth of 18.3% since the same quarter a year ago was higher than the industry average of 11.4%, but EPS declined. The debt-to-equity ratio is somewhat low at 0.75 and is less than that of the industry average, implying a relatively successful effort in the management of debt levels. The 0.34 quick ratio, however, is very weak and demonstrates a lack of ability to pay short-term obligations.Net operating cash flow has significantly decreased to -$111.28 million, or 509.30%, when compared with the same quarter last year. In addition, the firm's growth rate is much lower than the industry average.

Shares are down 22.7%, reflecting the market's overall decline as well as Staples' decline in EPS and other weaknesses. 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. Despite the past decline, the stock is still selling for more than most others in its industry.

Other ratings changes include Stanley ( SXE), upgraded from hold to buy, and Petroleum Development ( PETD), upgraded from hold to buy.

All ratings changes generated on Oct. 20 are listed below.
Ticker Company
Current
Change
Previous
AGM Federal Agriculture Mortgage
SELL
Downgrade
HOLD
AKO.B Embotelladora Andina
HOLD
Downgrade
BUY
ALOT Astro-Med
HOLD
Downgrade
BUY
ALTX Altex Industries
SELL
Downgrade
HOLD
ARTL Aristotle
HOLD
Downgrade
BUY
BEZ Baldor Electric
HOLD
Downgrade
BUY
BRKL Brookline Bancorp
HOLD
Downgrade
BUY
CBR Ciber
HOLD
Downgrade
BUY
CEBK Central Bancorp
HOLD
Upgrade
SELL
CHSI Catalyst Health Solutions
HOLD
Downgrade
BUY
CMCO Columbus McKinnon
HOLD
Downgrade
BUY
CSGS CSG Systems
HOLD
Downgrade
BUY
DRQ Dril-Quip
HOLD
Downgrade
BUY
ESL Esterline Technologies
HOLD
Downgrade
BUY
FDP Fresh Del Monte Produce
HOLD
Downgrade
BUY
FR First Industrial Realty
SELL
Downgrade
HOLD
FRED Fred's
HOLD
Downgrade
BUY
GENZ Genzyme
HOLD
Downgrade
BUY
GNET Global Traffic Network
HOLD
Downgrade
BUY
GNTX Gentex
HOLD
Downgrade
BUY
GPC Genuine Parts
HOLD
Downgrade
BUY
GS Goldman Sachs
HOLD
Downgrade
BUY
HGT Hugoton Royalty Trust
HOLD
Downgrade
BUY
HON Honeywell
HOLD
Downgrade
BUY
HTC Hungarian Telephone
SELL
Downgrade
HOLD
IEX Idex
HOLD
Downgrade
BUY
JKHY Jack Henry
HOLD
Downgrade
BUY
KNX Knight Transportation
HOLD
Downgrade
BUY
LVB Steinway Musical
HOLD
Downgrade
BUY
MMM 3M
HOLD
Downgrade
BUY
MPW Medical Properties Trust
HOLD
Downgrade
BUY
PBG Pepsi Bottling Group
HOLD
Downgrade
BUY
PDX Pediatrix
HOLD
Downgrade
BUY
PETD Petroleum Development
SELL
Downgrade
HOLD
PHST Pharsight
HOLD
Upgrade
SELL
RES RPC
HOLD
Downgrade
BUY
RGA.A Reinsurance Group
HOLD
Downgrade
BUY
RMD ResMed
HOLD
Downgrade
BUY
SCHN Schnitzer Steel
HOLD
Downgrade
BUY
SHOR Shoretel
SELL
Downgrade
HOLD
SPLS Staples
HOLD
Downgrade
BUY
SXE Stanley
BUY
Upgrade
HOLD
UBNK United Financial Bancorp
BUY
Upgrade
HOLD
VICR Vicor
SELL
Downgrade
HOLD
VLEEY Valeo
SELL
Downgrade
HOLD
XCO Exco Resources
SELL
Downgrade
HOLD
XETA Xeta Technologies
HOLD
Downgrade
BUY
Source: TheStreet.com Ratings

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