The following ratings changes were generated on Thursday, Feb. 5.

We've downgraded Devon Energy ( DVN - Get Report), which engages in oil and gas exploration, development and production, from hold to sell. Our rating is driven by its deteriorating net income, disappointing return on equity, weak operating cash flow, generally weak debt management and decline in the stock price during the past year.

Net income decreased from $1,316 million to -$6,816 million since the same quarter a year ago, significantly underperforming the S&P 500 and the oil, gas and consumable fuels industry. Return on equity has also greatly decreased, a sign of major weakness within the corporation. Net operating cash flow has decreased by 20.4% to $1,227 million. Devon has a low debt-to-equity ratio of 0.3, though it's higher than the industry average. The company's quick ratio of 0.7 is low, demonstrating weak liquidity.

Shares have sunk by 731% compared with the year-earlier quarter, though the broader market's performance is worse. 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 Harman International Industries ( HAR), which engages in the development, manufacture and marketing of audio products and electronic systems worldwide, from hold to sell. This rating is driven by the company's feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, poor profit margins and generally disappointing historical performance in the stock itself.

Net income decreased by 839% compared with the same quarter last year, significantly underperforming the S&P 500 and the household durables industry. ROE also greatly decreased, a signal of major weakness. Harman has experienced a steep decline in EPS of 895.6% in the most recent quarter compared with the year-ago quarter. We expect the company's two-year pattern of declining EPS to continue in the coming year. Its gross profit margin of 23.7% is rather low, having decreased from the year-ago quarter.

Shares tumbled 68.5% over the year, underperforming the S&P 500. 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 Investors Bancorp ( ISBC - Get Report), the holding company for Investors Savings Bank, from hold to sell. Our rating is driven by the company's feeble growth in its earnings per share, deteriorating net income, disappointing return on equity and decline in the stock price during the past year.

EPS have plummeted 2,100% compared with the year-ago quarter. We anticipate that the trend of declining EPS over the past year should continue in the coming year. Net income fell from $4 million to -$83 million compared with the year-ago quarter, significantly underperforming the S&P 500 and the commercial banks industry. ROE also greatly decreased, a signal of major weakness. Revenue fell 172%, greatly underperforming the industry average.

Shares have plunged 34.1% 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 Kraft Foods ( KFT) from buy to hold. Strengths include its revenue growth and largely solid financial position with reasonable debt levels by most measures. However, we also find weaknesses including a decline in the stock price during the past year, unimpressive growth in net income and disappointing return on equity.

Revenue slightly increased since the year-ago quarter, rising by 6.2%, vs. the industry average of 35.6% growth. Net income fell 72.1%, significantly underperforming the food products industry and the S&P 500, and ROE decreased slightly. Kraft's deb-to-equity ratio of 0.9 is somewhat low and is below the industry average, implying a relatively successful effort in the management of debt levels. EPS have declined steeply in the most recent quarter compared with the year-ago quarter. The company has reported a trend of declining earnings per share over the past two years, but the consensus estimate suggests that this trend should reverse in the coming year.

We've downgraded media and entertainment company Time Warner ( TWX) from hold to sell, driven by 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 is down 1,655% since the year-ago quarter, significantly underperforming the S&P 500 and the media industry. ROE has also greatly decreased, a signal of major weakness, and net operating cash flow decline marginally, by 3.5%, to $2,238 million. Time Warner has experienced a steep decline in EPS of 1,696.4% compared with the year-ago quarter, but consensus estimate suggests that the company's two-year pattern of declining EPS to reverse in the coming year.

Shares are down 40.5% on the year, in part reflecting the overall decline in the broad market. 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.

Other ratings changes include Panasonic ( PC), upgraded from sell to hold, and Mercer Insurance ( MIGP), upgraded from hold to buy.

All ratings changes generated on Feb. 5 are listed below.

 
Ticker
Company
Current
Change
Previous
ALVR Alvarion SELL Downgrade HOLD
DVN Devon Energy SELL Downgrade HOLD
HAR Harman International SELL Downgrade HOLD
HNNA Hennessy Advisors SELL Initiated  
ISBC Investors Bancorp SELL Downgrade HOLD
KFT Kraft Foods HOLD Downgrade BUY
LFUS LittelFuse SELL Downgrade HOLD
LTUS Lotus Pharmaceuticals SELL Initiated  
MIGP Mercer Insurance Group BUY Upgrade HOLD
NETL NetLogic Microsystems HOLD Upgrade SELL
PC Panasonic HOLD Upgrade SELL
SURW SureWest Communications SELL Downgrade HOLD
TCBK Trico Bancshares HOLD Downgrade BUY
TPLM Triangle Petroleum SELL Initiated  
TWX Time Warner SELL Downgrade 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.

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