The following ratings changes were generated on Monday, Dec. 1.

We rate Allianz ( AZ) a hold. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks.

The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and poor profit margins.

Allianz, with its decline in revenue, underperformed when compared the industry average of 6.6%. Since the same quarter one year prior, revenue fell by 33.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.

Despite currently having a low debt-to-equity ratio of 0.59, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the insurance industry and the overall market, Allianz's return on equity exceeds that of both the industry average and the S&P 500.

The gross profit margin for Allianz is currently extremely low, coming in at 1.90%. It has decreased significantly from the same period last year. Along with this, the net profit margin of negative 14.30% is significantly below that of the industry average. Net operating cash flow has significantly decreased to negative $5,908.86 million, or 328.99%, when compared to the same quarter last year.

We rate Boyd Gaming ( BYD) a sell. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover.

The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself, feeble growth in its earnings per share, deteriorating net income, generally weak debt management and disappointing return on equity.

Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year. It has tumbled by 88.45%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 72.22% compared to the year-earlier quarter. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.

Boyd has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from 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, Boyd reported lower earnings of $1.37 vs. $1.80 in the prior year. For the next year, the market is expecting a contraction of 29.2% in earnings ($0.97 versus $1.37). The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to the S&P 500 and the Hotels, Restaurants & Leisure industry. The net income has significantly decreased by 72.7% when compared to the same quarter one year ago, falling from $31.83 million to $8.70 million.

Currently, the debt-to-equity ratio of 1.92 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Along with this, the company manages to maintain a quick ratio of 0.46, which clearly demonstrates the inability to cover short-term cash needs. Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company.

In comparison to the other companies in the Hotels, Restaurants & Leisure industry and the overall market, Boyd's return on equity is significantly below that of the industry average and is below that of the S&P 500. Boyd's gross profit margin for the third quarter of its fiscal year 2008 has decreased when compared to the same period a year ago.

We rate Manulife Financial ( MFC) a hold. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks.

The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and poor profit margins.

Manulife's debt-to-equity ratio is very low at 0.30 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Net operating cash flow has increased to $2,973.00 million, or 35.69%, when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -12.26%. The gross profit margin for Manulife is currently lower than what is desirable, coming inat 32.50%.

Regardless of Manulife's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, Manulife's net profit margin of 9.10% compares favorably to the industry average.

Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year. It has tumbled by 58.88%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 52.85% compared to the year-earlier quarter. 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. Right now, however, we believe that it is too soon to buy.

Manulife's gross profit margin for the third quarter of its fiscal year 2008 has increased when compared to the same period a year ago. Sales and net income fell significantly; although net income growth outperformed the average competitor in its industry, revenue growth did not. During the same period, stockholders' equity ("net worth") has increased by 5.12% from the same quarter last year.

We rate Transocean ( RIG) a hold. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks.

The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in net income and good cash flow from operations. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

Transocean's very impressive revenue growth greatly exceeded the industry average of 26.0%. Since the same quarter one year prior, revenue leaped by 107.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share. The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Energy Equipment & Services industry average.

The net income increased by 13.7% when compared to the same quarter one year prior, going from $973.00 million to $1,106.00 million. Transocean's earnings per share declined by 25.7% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently But, we feel it is poised for EPS growth in the coming year.

During the past fiscal year, Transocean increased its bottom line by earning $14.06 vs. $6.25 in the prior year. This year, the market expects an improvement in earnings ($14.43 vs. $14.06). The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Energy Equipment & Services industry and the overall market, Transocean's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.

Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year. It has tumbled by 50.97%. However, 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.

Transocean's gross profit margin for the third quarter of its fiscal year 2008 is essentially unchanged when compared to the same period a year ago. The company managed to grow both sales and net income at a faster pace than the average competitor in its industry this quarter as compared to the same quarter a year ago. Transocean has average liquidity. Currently, the quick ratio is 1.36 which shows that technically this company has the ability to cover short-term cash needs. The company's liquidity has increased from the same period last year, indicating improving cash flow.

At the same time, stockholders' equity ("net worth") has greatly increased by 89.07% from the same quarter last year. Together, the key liquidity measurements indicate that it is relatively unlikely that the company will face financial difficulties in the near future.

We rate Richardson Electronics ( RELL) a sell. This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover.

The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, weak operating cash flow, poor profit margins and generally disappointing historical performance in the stock itself.

The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Electronic Equipment, Instruments & Components industry and the overall market, Richardson's return on equity significantly trails that of both the industry average and the S&P 500. Net operating cash flow has significantly decreased to negative $0.96 million, or 116.23%, when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

The gross profit margin for Richardson is rather low. Currently it is at 23.60%. It has decreased from the same quarter the previous year. Regardless of the weak results of the gross profit margin, the net profit margin of 2.70% is above that of the industry average. Richardson's stock price has done very poorly compared to where it was a year ago.

Despite any rallies, the net result is that it is down by 53.74%, which is also worse than the performance of the S&P 500. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. 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. Right now, however, we believe that it is too soon to buy.

Richardson reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, Richardson swung to a loss, reporting negative $0.47 vs. $0.09 in the prior year. This year, the market expects an improvement in earnings ($0.82 vs. -$0.47).

Richardson's gross profit margin for the first quarter of its fiscal year 2008 has decreased when compared to the same period a year ago. The company has grown sales and net income during the past quarter when compared with the same quarter a year ago, however, it was unable to keep up with the growth of the average competitor within its industry. Richardson has strong liquidity. Currently, the quick ratio is 1.74 which shows the ability to cover short-term cash needs. The company's liquidity has increased from the same period last year.

At the same time, stockholders' equity ("net worth") has remained virtually unchanged only increasing by 2.05% from the same quarter last year. The key liquidity measurements indicate that the company is unlikely to face financial difficulties in the near future.

All ratings changes generated on Dec. 1 are listed below.
Ticker Company
Current
Change
Previous
AEC
ASSOCIATED ESTATES RLTY CORP
SELL
Downgrade
HOLD
AZ
ALLIANZ SE
HOLD
Upgrade
SELL
BYD
BOYD GAMING CORP
SELL
Downgrade
HOLD
CACH
CACHE INC
SELL
Downgrade
HOLD
CWBS
COMMONWEALTH BANKSHARES INC
SELL
Downgrade
HOLD
HGIC
HARLEYSVILLE GROUP INC
BUY
Upgrade
HOLD
HOLI
HLS SYSTEMS INTERNATIONL LTD
FROZEN
Initiated
MFC
MANULIFE FINANCIAL CORP
HOLD
Downgrade
BUY
MSCC
MICROSEMI CORP
FROZEN
Downgrade
BUY
NKSH
NATIONAL BANKSHARES INC VA
BUY
Upgrade
HOLD
NRDS
NORD RESOURCES CORP
FROZEN
Initiated
NSATF
NORSAT INTL INC
SELL
Downgrade
HOLD
PCBS
PROVIDENT COMMUN BANCSHS INC
SELL
Downgrade
HOLD
RELL
RICHARDSON ELECTRONICS LTD
SELL
Downgrade
HOLD
RIG
TRANSOCEAN INC
HOLD
Downgrade
BUY
SOCB
SOUTHCOAST FINANCIAL CORP
FROZEN
Downgrade
HOLD
VR
VALIDUS HOLDINGS LTD
HOLD
Upgrade
SELL
WGL
WGL HOLDINGS INC
FROZEN
Upgrade
HOLD

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.