The following ratings changes were generated on Monday, Dec. 29.

We've downgraded Research In Motion ( RIMM), which engages in the design, manufacture and marketing of wireless solutions for the mobile communications market worldwide, from buy to hold. The primary factors that have impacted our rating are mixed. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures 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.

Research In Motion's very impressive revenue growth greatly exceeded the industry average of 17.6%. Since the same quarter one year prior, revenues leaped by 66.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.

RIMM's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, RIMM has a quick ratio of 1.63, which demonstrates the ability of the company to cover short-term liquidity needs.

45.60% is the gross profit margin for Research In Motion which we consider to be strong. Regardless of Research In Motion's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 14.20% trails the industry average.

Research In Motion'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 65.66%, which is also worse that the performance of the S&P 500 Index. 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.

We've downgraded CSX Corp. ( CSX), which provides rail-based transportation services in North America, from buy to hold. The primary factors that have impacted our rating are mixed. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and poor profit margins.

Despite its growing revenue, the company underperformed as compared with the industry average of 21.6%. Since the same quarter one year prior, revenues rose by 18.4%. Growth in the company's revenue appears to have helped boost the earnings per share.

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 Road & Rail industry and the overall market, CSX's return on equity exceeds that of both the industry average and the S&P 500.

Net operating cash flow has increased to $848.00 million or 14.13% when compared to the same quarter last year. Despite an increase in cash flow, CSX's cash flow growth rate is still lower than the industry average growth rate of 62.89%.

The gross profit margin for CSX is currently lower than what is desirable, coming in at 32.40%. Regardless of CSX's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 12.90% trails the industry average.

The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed compared to the Road & Rail industry average, but is greater than that of the S&P 500. The net income has decreased by 6.1% when compared to the same quarter one year ago, dropping from $407.00 million to $382.00 million.

We've downgraded Cohen & Steers ( CNS), which together with its subsidiaries, manages high-income equity portfolios in the United States, from buy to hold. The primary factors that have impacted our rating are mixed . Among the primary strengths of the company is its respectable return on equity which we feel is likely to continue. At the same time, however, we also find weaknesses including a generally disappointing performance in the stock itself, poor profit margins and weak operating cash flow.

Despite the weak revenue results, C&S has significantly outperformed against the industry average of 64.6%. Since the same quarter one year prior, revenues fell by 29.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.

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 Capital Markets industry and the overall market, C&S's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.

The gross profit margin for C&S is currently lower than what is desirable, coming in at 27.70%. It has decreased from the same quarter the previous year.

Net operating cash flow has significantly decreased to $12.77 million or 59.60% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

We've downgraded Synaptics ( SYNA), which develops and supplies custom-designed interface solutions that enable people to interact with various electronic devices, from buy to a hold. The primary factors that have impacted our rating are mixed.The company's strengths can be seen in multiple areas, such as its robust revenue growth, growth in earnings per share and increase in net income. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and weak operating cash flow.

The revenue growth came in higher than the industry average of 17.4%. Since the same quarter one year prior, revenues rose by 33.6%. Growth in the company's revenue appears to have helped boost the earnings per share.

Synaptics has improved earnings per share by 42.7% 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, Synaptics increased its bottom line by earning $0.76 versus $0.63 in the prior year. This year, the market expects an improvement in earnings ($1.74 versus $0.76).

Synaptics' debt-to-equity ratio of 0.91 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. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 4.50 is very high and demonstrates very strong liquidity.

Net operating cash flow has decreased to $2.57 million or 48.99% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

Synaptics' 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 48.41%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, Synaptics is still more expensive than most of the other companies in its industry.

We've upgraded Tower Group ( TWGP), which through its subsidiaries, provides a range of specialized property and casualty insurance products and services to small to mid-sized businesses and individuals in the northeast United States, from hold to buy.

The revenue growth came in higher than the industry average of 6.6%. Since the same quarter one year prior, revenues rose by 16.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.

Tower has improved earnings per share by 16.1% 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. During the past fiscal year, TOWER GROUP INC increased its bottom line by earning $1.92 versus $1.81 in the prior year. This year, the market expects an improvement in earnings ($2.87 versus $1.92).

The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Insurance industry. The net income increased by 16.2% when compared to the same quarter one year prior, going from $14.38 million to $16.72 million.

Net operating cash flow has increased to $23.13 million or 26.40% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -12.27%.

Despite currently having a low debt-to-equity ratio of 0.32, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further.

Other ratings changes include:

  • Blackrock Kelso Capital Corp. (BKCC): Upgraded from sell to hold.
  • Harte-Hanks (HHS): Downgraded from hold to sell.
  • Southern First Bankshares (SFST): Downgraded from hold to sell.
  • 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.

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