The following ratings changes were generated on Tuesday, Dec. 2.

We rate Air Products & Chemicals ( APD) 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 revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and poor profit margins.

Air Products' revenue growth trails the industry average of 25.7%. Since the same quarter one year prior, revenue slightly increased by 4.3%. 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. Air Products' debt-to-equity ratio of 0.79 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.80 is weak.

Air Products' earnings per share declined by 6.7% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, Air Products reported lower earnings of $3.80 vs. $4.55 in the prior year. This year, the market expects an improvement in earnings to $5.10.

The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed compared to the Chemicals industry average, but is greater than that of the S&P 500. The net income has decreased by 10.7% when compared to the same quarter one year ago, dropping from $292.80 million to $261.60 million.

Looking at the price performance of the shares over the past 12 months, there is not much good news to report: the stock is down 56.28%, and it has underperformed the S&P 500 Index. In addition, the company's earnings per share are lower today than 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.

We rate Big Lots ( BIG). 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 revenue growth, impressive record of earnings per share growth and increase in net income. However, as a counter to these strengths, we also find weaknesses including a decline in the stock price during the past year and weak operating cash flow.

Big Lots' revenue growth has slightly outpaced the industry average of 1.7%. Since the same quarter one year prior, revenue slightly increased by 1.9%. Growth in the company's revenue appears to have helped boost the earnings per share.

Big Lots reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue.

This trend suggests that the performance of the business is improving. During the past fiscal year, Big Lots increased its bottom line by earning $1.58 vs. $1.02 in the prior year. This year, the market expects an improvement in earnings to $1.90. Big Lots' debt-to-equity ratio is very low at 0.22 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.09 is very weak and demonstrates a lack of ability to pay short-term obligations.

Net operating cash flow has significantly decreased to $41.96 million, or 57.33%, when compared to the same quarter last year. Despite a decrease in cash flow, Big Lots is still fairing well by exceeding its industry average cash flow growth rate of negative 76.57%. Big Lots' share price is down 16.77%, reflecting, in part, the market's overall decline.

Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.

We rate Embarq ( EQ) a sell. This is driven by some concerns, 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 weak debt management and decline in the stock price during the past year.

The debt-to-equity ratio is very high at 85.88 and currently higher than the industry average, implying that there is very poor management of debt levels within the company. To add to this, Embarq has a quick ratio of 0.59, this demonstrates the lack of ability of the company to cover short-term liquidity needs.

Embarq's share have plunged by 42.58% compared to where it was selling one year ago, apparently dragged down by the decline we have seen in the S&P 500 along with other factors. Naturally, the overall market trend is bound to be a significant factor. 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.

The gross profit margin for Embarq is rather high; currently it is at 63.40%. Regardless of Embarq's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, Embarq 's net profit margin of 10.50% compares favorably to the industry average. Regardless of the drop in revenue, the company managed to outperform against the industry average of 4.4%.

Since the same quarter one year prior, revenue slightly dropped by 4.3%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share. Net operating cash flow has slightly increased to $530.00 million, or 1.53%, when compared to the same quarter last year. In addition, Embarq has also modestly surpassed the industry average cash flow growth rate of negative 7.53%.

We rate Hartford Financial ( HIG) 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 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.

The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Insurance industry. The net income has significantly decreased by 409.2% when compared to the same quarter one year ago, falling from $851.00 million to negative $2,631.00 million.

Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Insurance industry and the overall market, Hartford'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 $677.00 million, or 58.20%, when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.

Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 93.07%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 426.11% compared to the year-earlier quarter.

Naturally, the overall market trend is bound to be a significant factor. 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.

Hartford 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. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, the company ncreased its bottom line by earning $9.23 vs. $8.67 in the prior year. For the next year, the market is expecting a contraction of 52.3% in earnings to $4.40.

We rate Internet Capital Group ( ICGE) a sell. This is driven by multiple 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 generally disappointing historical performance in the stock itself and weak operating cash flow.

Internet Capital's stock share 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 68.67%, which is also worse that 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. 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.

Net operating cash flow has significantly decreased to negative $4.15 million, or 132.19%, 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 return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Internet Software & Services industry and the overall market, Internet Capital's return on equity significantly trails that of both the industry average and the S&P 500.

The gross profit margin for Internet Capital is currently lower than what is desirable, coming in at 34.90%. Regardless of Internet Capital's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, ICGE's net profit margin of 131.50% significantly outperformed against the industry.

Internet Capital reported significant earnings per share improvement in the most recent quarter compared to the same quarter 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, Internet Capital swung to a loss, reporting negative $0.84 vs. $0.16 in the prior year. This year, the market expects an improvement to a loss of $0.19.

All ratings changes generated on Dec. 2 are listed below.
Ticker Company
Current
Change
Previous
AP AMPCO-PITTSBURGH CORP
FROZEN
BUY
APD AIR PRODUCTS & CHEMICALS INC
HOLD
Downgrade
BUY
BIG BIG LOTS INC
HOLD
Downgrade
BUY
CODI COMPASS DIVERSIFIED HOLDINGS
SELL
Downgrade
HOLD
CRT CROSS TIMBERS ROYALTY TRUST
HOLD
Downgrade
BUY
CTGX COMPUTER TASK GROUP INC
HOLD
Downgrade
BUY
EQ EMBARQ CORP
SELL
Downgrade
HOLD
FNSC FIRST NATL BANCSHARES INC/SC
SELL
Downgrade
HOLD
GBTS GATEWAY FINANCIAL HLDGS INC
SELL
Downgrade
HOLD
GETI GENTEK INC
SELL
Downgrade
HOLD
GXDX GENOPTIX INC
HOLD
Initiated
HIG HARTFORD FINANCIAL SERVICES
SELL
Downgrade
HOLD
HKN HKN INC
SELL
Downgrade
HOLD
HRP HRPT PROPERTIES TRUST
SELL
Downgrade
HOLD
ICCC IMMUCELL CORP
SELL
Downgrade
HOLD
ICGE INTERNET CAPITAL GROUP INC
SELL
Downgrade
HOLD
IIG IMERGENT INC
SELL
Downgrade
HOLD
IPHS INNOPHOS HOLDINGS INC
SELL
Downgrade
HOLD
ITEX ITEX CORP
HOLD
Upgrade
SELL
LNCE LANCE INC
HOLD
Downgrade
BUY
LWAY LIFEWAY FOODS INC
FROZEN
Downgrade
BUY
MAXY MAXYGEN INC
HOLD
Upgrade
SELL
MRLN MARLIN BUSINESS SERVICES INC
SELL
Downgrade
HOLD
MV METAVANTE TECHNOLOGIES INC
SELL
Initiated
ONFC ONEIDA FINANCIAL CORP
SELL
Downgrade
HOLD
PKG PACKAGING CORP OF AMERICA
HOLD
Downgrade
BUY
PRM PRIMEDIA INC
HOLD
Upgrade
SELL
PWX PROVIDENCE AND WORCESTER RR
SELL
Downgrade
HOLD
SDBT SOUNDBITE COMMUNICATIONS INC
SELL
Initiated
SIGI SELECTIVE INS GROUP INC
HOLD
Downgrade
BUY
SYNO SYNOVIS LIFE TECH INC
HOLD
Downgrade
BUY
THOR THORATEC CORP
HOLD
Downgrade
BUY
TRAK DEALERTRACK HOLDINGS INC
SELL
Downgrade
HOLD
VASC VASCULAR SOLUTIONS INC
HOLD
Downgrade
BUY

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.