The following ratings changes were generated on Wednesday, Feb. 18.

We've upgraded Barrick Gold ( ABX), which engages in the acquisition, exploration and development of gold properties, from hold to buy, driven by revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Revenue rose by 11.5% since the same quarter last year, trailing the industry average of 53.1% growth. The growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share. Return on equity also grew from the year-ago quarter, a sign of strength within the company. Barrick's gross profit margin of 41.4% is strong, though it has decreased from the same period last year. The company's net profit margin of 13.5% trails the industry average. Its debt-to-equity ratio is very low at 0.3, and its 1.4 quick ratio illustrates its ability to avoid short-term cash problems. Net operating cash flow has decreased by 12.1% to $508 million compared with the year-ago quarter, though it did not decrease as much as the industry average.

We've upgraded American States Water ( AWR), which engages in water and electric service utility operations, from hold to buy, driven by its revenue growth, good cash flow from operations, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had generally poor debt management on most measures that we evaluated.

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