The following ratings changes were generated on Wednesday, Dec. 10.

We've upgraded Cogent ( COGT), which provides automated fingerprint identification systems and other fingerprint biometrics solutions, from hold to buy, driven by its revenue growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins, good cash flow from operations and compelling growth in net income. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.

Revenue rose by a very impressive 55.6% since the same quarter last year, outperforming the industry growth rate of 20.6% and boosting EPS. Cogent has no debt to speak of, resulting in a debt-to-equity ratio of zero, a relatively favorable sign. The company also maintains a quick ratio of 4.70, clearly demonstrating the ability to cover short-term cash needs. Cogent's gross profit margin of 73.2% is very high, having increased significantly from the same period last year. Also, its 34.4% net profit margin significantly outperformed the industry.

Net operating cash flow has significantly increased by 192.12% to $33.44 million when compared with the same quarter last year, vastly surpassed the industry average cash flow growth rate of -2.80%. Net income increased by 190.4%, from $4.14 million to $12.03 million, outperforming the S&P 500 and the electronic equipment, instruments and components industry.

We've downgraded natural gas distributor Nicor ( GAS) from buy to hold. Strengths include its robust revenue growth and reasonable valuation levels. Weaknesses include a decline in the stock price during the past year, deteriorating net income and poor profit margins.

Revenue rose by 20.6% since the same quarter a year ago, trailing the industry average growth rate of 33.5%. Earnings per share declined steeply in the most recent quarter compared with the same quarter last year. During the past fiscal year, Nicor did increas its bottom line by earning $2.98 vs. $2.86 in the prior year, but for the next year, the market is expecting a contraction of 22.6% in earnings to $2.31 versus $2.98. Net operating cash flow has significantly decreased to -$557.90 million.

Shares are down 19.8% over the past year, reflecting the market's overall decline (which was actually deeper) and the sharp decline in Nicor's EPS. We do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite its decline, the stock is still selling for more than most others in its industry.

We've upgraded Granite Construction ( GVA), which operates as a heavy civil contractor and a construction materials producer for public and private sector clients, from hold to buy, driven by its solid stock price performance, growth in earnings per share, revenue growth, notable return on equity and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

EPS have improved by 6.3% in the most recent quarter compared with the same quarter a year ago. During the past fiscal year, Granite increased its bottom line by earning $2.70 vs. $1.94 in the prior year, and this year, the market expects further improvement in earnings to $2.91. Revenue rose by 6.1% since the same quarter last year, trailing the industry's 41.7%. Return on equity has improved slightly, outperforming the construction and engineering industry and the overall market. Granite's low debt-to-equity ratio of 0.45 is still higher than the industry average, but the company's quick ratio of 1.15 is sturdy.

Shares have risen over the past year, reflecting Granite's earnings growth. It goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.

We've downgraded SkillSoft Public Limited ( SKIL), which provides e-learning and performance support solutions, from buy to hold. Strengths include its compelling growth in net income, revenue growth and notable return on equity. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

Net income increased by 106.5% since the same quarter last year, from $5.82 million to $12.03 million, outperforming the S&P 500 and the Internet software and services industry. Revenue rose by 10.6%, trailing the industry's 30.3% but boosting EPS significantly. The company has demonstrated a pattern of positive earnings per share growth over the past two years, but we anticipate underperformance relative to this pattern in the coming year. SkillSoft's gross profit margin is very high at 88%, though it has managed to decrease from the same period last year. The 14.5% net profit margin trails the industry average.

Shares are down 43.4% on the year, apparently dragged down by the decline we have seen in the S&P 500. 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 Tsakos Energy Navigation ( TNP), which provides seaborne crude oil, petroleum products and liquefied natural gas transportation services, from buy to hold. Strengths include its robust revenue growth and expanding profit margins. Weaknesses include feeble growth in the company's earnings per share, unimpressive growth in net income and generally poor debt management.

Revenue rose by 29.6% since the same quarter last year, underperforming the industry average of 30.3% growth. EPS declined. Tsakos' gross profit margin of 56.7% is rather high, having increased from the same quarter the previous year. Its net profit margin of 25.8% significantly outperforms the industry. The company's current return on equity has slightly decreased from the same quarter one year prior, implying a minor weakness in the organization. Net income has decreased by 18%, dropping from $50 million to $41 million. Tsakos' debt-to-equity ratio of 1.5 is high overall and when compared with the industry average.

Other ratings changes include CryptoLogic ( CRYP) and National SEC Group ( NSEC), both downgraded from hold to sell.

All ratings changes generated on Dec. 10 are listed below.
Ticker Company Current Change Previous
ATBC Atlantic BancGroup SELL Downgrade HOLD
AXU Alexco Resource SELL Initiated
BAS Basic Energy Services HOLD Upgrade SELL
BMRC Bank of Marin Bancorp HOLD Downgrade BUY
CMRG Casual Male Retail Group SELL Downgrade HOLD
COGT Cogent BUY Upgrade HOLD
CRE Care Investment Trust SELL Downgrade HOLD
CRLI Circuit Research Labs HOLD Upgrade SELL
CRYP CryptoLogic SELL Downgrade HOLD
CYNO Cynosure HOLD Upgrade SELL
EESV Environmental Energy SELL Initiated
GAS Nicor HOLD Downgrade BUY
GBCS Global Casinos SELL Downgrade HOLD
GVA Granite Construction BUY Upgrade HOLD
HABC Habersham Bancorp SELL Downgrade HOLD
HEMA HemaCare HOLD Upgrade SELL
NSEC National SEC Group SELL Downgrade HOLD
PNRG PrimeEnergy HOLD Downgrade BUY
PSBH PSB Holdings SELL Downgrade HOLD
PTG Paragon Technologies SELL Downgrade HOLD
PTSX Point.360 SELL Initiated
RODM Rodman & Renshaw Capital SELL Initiated
SKIL SkillSoft HOLD Downgrade BUY
TNP Tsakos Energy Navigation HOLD Downgrade BUY

Each business day, 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.