The following ratings changes were generated on Tuesday, Oct. 21.

We've downgraded DryShips ( DRYS), which provides international seaborne transportation services, from buy to hold. Strengths include its robust revenue growth, notable return on equity and attractive valuation levels. Weaknesses include generally poor debt management and a generally disappointing performance in the stock itself.

Revenue leaped by 169% since the same quarter one year ago, greatly exceeding the industry average of 28.2% and helping to boost EPS. Current return on equity exceeded ROE from the same quarter last year, outperforming both the marine industry and the S&P 500, a clear sign of strength within the company. DryShips reported significant earnings per share improvement in the most recent quarter compared with the same quarter a year ago and has demonstrated a two-year pattern of positive EPS growth, but we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, DryShips increased its bottom line by earning $13.29 vs. $1.74 in the prior year. For the next year, the market is expecting a contraction of 2% in earnings to $13.03.

Its debt-to-equity ratio of 1.48 is relatively high when compared with the industry average, suggesting a need for better debt level management. The company also has a quick ratio of 0.37, clearly demonstrating an inability to cover short-term cash needs. Shares plunged 78.41% on the year, underperforming the S&P 500. Naturally, the overall market trend is bound to be a significant factor, and the stock's sharp decline last year could be 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 Gardner Denver ( GDI), designs, manufactures and markets compressor, vacuum and fluid transfer products, from buy to hold. Strengths include its increase in net income, revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we find that the stock has had a decline in price during the past year.

Net income increased by 10.7%, from $44.77 million to $49.57 million, over the same quarter one year ago, significantly outperforming the S&P 500 and the machinery industry. Revenue rose by 12.7%, improving EPS underperforming the industry average of 17.1%. ROE improved slightly over the same quarter a year ago, underperforming the industry average but outperforming the S&P 500. EPS rose 12% in the most recent quarter compared with the same quarter last year. The company has demonstrated a two-year pattern of positive EPS growth, but we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, Gardner Denver increased its bottom line by earning $3.80 vs. $2.50 in the prior year. For the next year, the market is expecting a contraction of 4.7% in earnings to $3.62.

Shares plunged 31.94% on the year, dragged down in part by the decline we have seen in the S&P 500. Naturally, the overall market trend is bound to be a significant factor. And in one sense, the decline is a positive, making the stock 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 Janus Capital ( JNS), which sponsors, markets and provides investment advisory, distribution and administrative services through the Janus series of mutual funds, separate accounts and institutional clients, 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 weak operating cash flow and a generally disappointing performance in the stock itself.

Revenue rose by 11.4%, boosting EPS. The debt-to-equity ratio is somewhat low, currently at 0.69, and is below the industry average, implying that there has been a relatively successful effort in the management of debt levels. The company also maintains a quick ratio of 3.72, which clearly demonstrates the ability to cover short-term cash needs. EPS rose 42.9% in the most recent quarter compared with the same quarter last year. The company has demonstrated a two-year pattern of positive EPS growth, but we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, Janus increased its bottom line by earning $1.07 vs. 68 cents in the prior year. For the next year, the market expects a contraction of 1.4% to $1.06.

Net operating cash flow has decreased to $78.80 million, or 38.34% when compared with the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower. Shares are down 59.77% since a year ago, underperforming the S&P 500. The decline could help make the stock attractive down the road, but for now, we believe that it is too soon to buy.

We've downgraded SanDisk ( SNDK), which designs, develops and markets flash storage devices used for a wide variety of consumer electronics products, from hold to sell, based on its feeble EPS growth, deteriorating net income, disappointing return on equity, poor profit margins and weak operating cash flow.

SanDisk has experienced a steep decline in EPS in the most recent quarter compared with the same quarter last year. EPS have declined over the past two years, and we anticipate this trend should continue in the coming year. During the past fiscal year, SanDisk reported lower earnings of 93 cents vs. 98 cents in the prior year. For the next year, the market is expecting a contraction of 125.8% in earnings to -24 cents. Net income has significantly decreased by 283.4%, from $84.64 million to -$155.19 million, over the same quarter last year, underperforming the S&P 500 and the computers and peripherals industry. ROE has slightly decreased, implying weakness and trailing both the industry average and the S&P 500.

SanDisk's gross profit margin is extremely low at 7.2%, having decreased significantly from the same period last year. Its -18.9% net profit margin is significantly below the industry average. Net operating cash flow decreased to $136.14, or 59.83% when compared with the same quarter last year, but the company is in line with the industry average cash flow growth rate of -63.79%.

We've downgraded Tractor Supply ( TSCO), a specialty retailer which supplies products for the lifestyle needs of recreational farmers and ranchers and serves rural maintenance needs, from buy to hold. Strengths include its revenue growth, growth in earnings per share and increase in net income. However, we also find weaknesses including poor profit margins and disappointing return on equity.

Revenue growth of 13.6% since the same quarter a year ago outperformed the industry average of 11.5% and boosted EPS., which rose by 14.8% in the most recent quarter over the same quarter last year. The company's EPS have grown over the past two years, and we expect this trend to continue, suggesting improvement in business performance. During the past fiscal year, Tractor Supply increased its bottom line by earning $2.41 vs. $2.22, and the market expects further improvement to $2.50 this year. The company's debt-to-equity ratio of 0 is very low and is currently below that of the industry average, implying very successful management of debt levels. The quick ratio of 0.12, however, is very weak and demonstrates a lack of ability to pay short-term obligations.

ROE has decreased from the same quarter last year, implying weakness and underperforming the industry average but outperforming the S&P 500. The gross profit margin of 31.1% is lower than desirable, having decreased from the same quarter last year. The net profit margin of 5.2% trails the industry average.

Other ratings changes include Altra Holdings ( AIMC) and Fidelity Southern ( LION), both downgraded from hold to sell.

All ratings changes generated on Oct. 21 are listed below.
Ticker Company
Current
Change
Previous
AGN Allergan
HOLD
Downgrade
BUY
AIMC Altra Holdings
SELL
Downgrade
HOLD
ALDN Aladdin Knowldege
HOLD
Upgrade
SELL
AMIC American Independence
SELL
Downgrade
HOLD
AMSF Amerisafe
HOLD
Downgrade
BUY
BRY Berry Petroleum
HOLD
Downgrade
BUY
BWTL Bowlin Travel Centers
HOLD
Upgrade
SELL
CBKM Consumers Bancorp
HOLD
Upgrade
SELL
DNR Denbury Resources
HOLD
Downgrade
BUY
DRYS DryShips
HOLD
Downgrade
BUY
EXPD Expeditors
HOLD
Downgrade
BUY
FCLF First Clover Leaf Financial
HOLD
Downgrade
BUY
FCX Freeport-McMoRan
HOLD
Downgrade
BUY
FPL FPL Group
HOLD
Downgrade
BUY
GDI Gardner Denver
HOLD
Downgrade
BUY
HBIO Harvard Bioscience
HOLD
Downgrade
BUY
IIIN Insteel Industries
HOLD
Downgrade
BUY
IT Gartner
HOLD
Downgrade
BUY
JNS Janus Capital
HOLD
Downgrade
BUY
KFRC Kforce
HOLD
Downgrade
BUY
KNOL Knology
SELL
Downgrade
HOLD
LION Fidelity Southern
SELL
Downgrade
HOLD
MIC MacQuarie Infrastructure
SELL
Downgrade
HOLD
NTG Natco Group
HOLD
Downgrade
BUY
PICO Pico Holdings
HOLD
Downgrade
BUY
PSEM Pericom Semiconductor
HOLD
Downgrade
BUY
RIO.PR Companhia Vale
HOLD
Downgrade
BUY
RUSHB Rush Enterprises
HOLD
Downgrade
BUY
SBBX Sussex Bancorp
SELL
Downgrade
HOLD
SHS Sauer-Danfoss
HOLD
Downgrade
BUY
SIM Grupo Simec
HOLD
Downgrade
BUY
SNDK Sandisk
SELL
Downgrade
HOLD
SPSS SPSS
HOLD
Downgrade
BUY
SYNL Synalloy
HOLD
Downgrade
BUY
TS Tenaris
HOLD
Downgrade
BUY
TSCO Tractor Supply
HOLD
Downgrade
BUY
VPF Valpey-Fisher
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.