The following ratings changes were generated on Monday, Nov. 10.

We've upgraded Amerigroup ( AGP), which operates as a multistate managed healthcare company, from sell to hold. Strengths include its revenue growth, largely solid financial position with reasonable debt levels by most measures and growth in earnings per share. Weaknesses include disappointing return on equity, weak operating cash flow and poor profit margins.

Amerigroup's 8.8% revenue growth from the same quarter a year ago came in higher than the industry average of 3.6%, helping boost earnings per share. The current debt-to-equity ratio, 0.38, is low and is below the industry average, implying successful management of debt levels. The company also maintains an adequate quick ratio of 1.26, which illustrates the ability to avoid short-term cash problems.

Net operating cash flow has significantly decreased to -$125.22 million, or 250.61% when compared with the same quarter last year. In addition, the firm's growth rate is much lower than the industry average. Return on equity has greatly decreased from the same quarter one year prior, a signal of major weakness within the corporation. Amerigroup's ROE significantly trails both the industry average and the S&P 500.

We've downgraded Hormel ( HRL) from buy to hold. Strengths include its revenue growth, notable return on equity and reasonable valuation levels. Weaknesses include unimpressive growth in net income, poor profit margins and weak operating cash flow.

Hormel's 10.4% revenue growth since the same quarter a year ago trails the industry average of 34.1%, and EPS have declined. Return on equity has improved slightly, which can be construed as a modest strength in the organization, and it exceeds the industry average and the S&O 500. The comapny's debt-to-equity ratio is very low at 0.21 and is currently below that of the industry average, implying very successful management of debt levels. Its quick ratio, however, of 0.78 is somewhat weak and could be cause for future problems.

Gross profit margin of 22.3% is rather low, having decreased from the same quarter last year. It's 3.1% net profit margin trails the industry average. Net income has decreased by 9.4%, significantly underperforming the food products industry but outperforming the S&P 500.

We've downgraded FactSet Research Systems ( FDS) from buy to hold. Strengths include its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and growth in earnings per share. Weaknesses include a generally disappointing performance in the stock itself and weak operating cash flow.

Revenue growth of 18.7% since the same quarter a year ago came in higher than the industry average of 4.5%, and EPS improved. FactSet has no debt to speak of, as well as a quick ratio of 2.35, which demonstrates the ability of the company to cover short-term liquidity needs. The return on equity has improved slightly when compared to the same quarter one year prior, outperforming the S&P 500 but underperforming the industry average. Despite a decrease in cash flow of 30.14%, FactSet is in line with the industry average cash flow growth rate of -33.00%.

Shares are down 43.87% on the year, underperforming the S&P 500 index. 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 Reliant Energy ( RRI), which provides electricity and energy services, from hold to sell, driven by its deteriorating net income, disappointing return on equity, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Net income decreased by 739.2% over the same quarter a year ago, to -$1,037.92 million, underperforming the S&P 500 and the independent power producers and energy traders industry. ROE has slightly decreased and significantly trails the industry average and the S&P 500. Net operating cash flow has significantly decreased to $77.24 million, or 74.81% when compared with the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.

EPS have declined steeply, by 760%, in the most recent quarter year over year. During the past fiscal year, Reliant earned $1 vs. -$1.07 I the prior year, and the market expects a contraction of 96% to 4 cents for the next year. Share are down 78.96%, underperforming the S&P 500. 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. Right now, however, we believe that it is too soon to buy.

We've downgraded U.S. Bancorp ( USB) from buy to hold. Strengths include its expanding profit margins and notable return on equity. Weaknesses include a decline in the stock price during the past year, feeble growth in the company's earnings per share and deteriorating net income.

U.S. Bancorps 58.1% gross profit margin is rather high, but it has decreased from the same period last year. Its 12.9% net profit margin compares favorably with the industry average. Revenue fell by 13.7%, underperforming the industry average of 5.6%. EPS decreased. Current ROE is lower than it was in the same quarter last year, a clear sign of weakness, but it exceeds that of the industry average and the S&P 500.

EPS declined by 48.4% in the most recent quarter year over year, and during the past fiscal year, the company reported lower earnings of $2.43 vs. $2.61 in the prior year. The market sees a contraction of 19.3% to $1.96 for the next year. Net income is down 47.4% over the same quarter last year, to $576 million, underperforming both the S&P 500 and the commercial banks industry.

Other ratings changes include United Security ( USBI), upgraded from hold to buy, and Brandywine ( BDN), downgraded from hold to sell.

All ratings changes generated on Nov. 10 are listed below.
Ticker Company Current Change Previous
ABCW Anchor Bancorp
SELL
Downgrade
HOLD
AEG Aegon
SELL
Downgrade
HOLD
AGP Amerigroup
HOLD
Upgrade
SELL
AN AutoNation
SELL
Downgrade
HOLD
ARSD Arabian American Development
SELL
Downgrade
HOLD
ASGR America Service Group
HOLD
Upgrade
SELL
AVTR Avatar
SELL
Downgrade
HOLD
BDN Brandywine
SELL
Downgrade
HOLD
BOFI BOFI Holding
SELL
Downgrade
HOLD
BRKR Bruker
HOLD
Downgrade
BUY
CBEY CBeyond
HOLD
Upgrade
SELL
CDE Coeur D'Alene Mines
SELL
Downgrade
HOLD
COVR Cover-All Technologies
HOLD
Upgrade
SELL
DM Dolan Media
SELL
Initiated
FARM Farmer Bros.
SELL
Downgrade
HOLD
FDS FactSet Research Systems
HOLD
Downgrade
BUY
FRZ Reddy Ice
SELL
Downgrade
HOLD
G GenPact
SELL
Initiated
GAIA Gaiam
SELL
Downgrade
HOLD
GTLS Chart Industries
SELL
Downgrade
HOLD
HIL Hill International
SELL
Downgrade
HOLD
HRL Hormel Foods
HOLD
Downgrade
BUY
INXI INX
HOLD
Downgrade
BUY
LAMR Lamar Advertising
SELL
Downgrade
HOLD
LCUT Lifetime Brands
SELL
Downgrade
HOLD
OFIX Orthofix
SELL
Downgrade
HOLD
RRI Reliant Energy
SELL
Downgrade
HOLD
SMCI Super Micro Computer
SELL
Downgrade
HOLD
TECUA Tecumseh Products
SELL
Downgrade
HOLD
TECUB Tecumseh Products
SELL
Downgrade
HOLD
USB U.S. Bancorp
HOLD
Downgrade
BUY
USBI United Security
BUY
Upgrade
HOLD
ZINC Horsehead
SELL
Initiated

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.

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