The following ratings changes were generated on Tuesday, Feb. 24.

We've downgraded Adaptec ( ADPT), which provides storage solutions to move, manage and protect data and digital content, from hold to sell. This rating is driven by the company's decline in the stock price during the past year, unimpressive growth in net income, weak operating cash flow and feeble growth in its earnings per share.

Net income feel to -$1.3 million in the most recent quarter from $1.1 million in the year-ago quarter, significantly underperforming the S&P 500 and the computers and peripherals industry. Net operating cash flow decreased to -$4.2 million, though return on equity improved slightly, which can be construed as a modest strength. EPS declined steeply, but the consensus estimate suggests that the company's two-year trend of declining EPS should reverse in the coming year.

Shares are down 18.2% over the past year, in part reflecting the market's overall decline, which was actually deeper. We do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.

We've downgraded biopharmaceutical company Celgene ( CELG) from hold to sell, driven by its deteriorating net income, disappointing return on equity, weak operating cash flow and feeble growth in its earnings per share.

Net income fell from $75.3 million in the year-ago quarter to -$149.3 million in the most recent quarter, significantly underperforming the S&P 500 and the biotechnology industry. ROE also great decreased, a signal of major weakness within the corporation. Net operating cash flow fell to -$294.2 million. EPS declined steeply, though the consensus estimate suggest that the company's two-year trend of declining EPS should reverse in the coming year.

Share price has not changed very much compared with a year ago but has come down somewhat, which should not necessarily be interpreted as a negative. Its decline 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 upgraded shopping-mall-based specialty retailer Hot Topic ( HOTT) from hold to buy, driven by its revenue growth, growth in earnings per share, increase in net income, expanding profit margins and good cash flow from operations. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Revenue increased by 4.7% since the same quarter last year, and EPS improved by 13.3%. The company has demonstrated a pattern of positive earnings per share growth over the past year, which feel that this trend should continue. Net income increased by 11.4% since the year-ago quarter, from $6.7 million to $7.4 million, significantly outperforming the S&P 500 and the specialty retail industry. Hot Topic's 42.4% gross profit margin is strong, having increased from the same quarter last year, and its net profit margin of 3.8% is above the industry average. Net operating cash flow increased by 48% to $14.2 million compared with the year-ago quarter.

We've initiated coverage of Shinhan Financial Group ( SHG), which offers various financial products and services to corporations, governments, institutions and individuals, at sell. This rating is driven by the generally disappointing historical performance in the stock itself.

Net income decreased by 12.7% since the year-ago quarter, from $184.9 million to $161.3 million. ROE slightly decreased, implying a minor weakness in the organization. EPS improved by 15.5% year over year, and though the company has reported volatile earnings recently, we feel it is poised for EPS growth in the coming year.

Shares are down 71.2% over the past 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.

Other ratings changes included Forest Oil ( FST), downgraded from hold to sell; FBL Financial Group ( FFG), downgraded from hold to sell; and Cephalon ( CEPH), downgraded from buy to hold.

All ratings changes generated on Feb. 24 are listed below.

Ticker
Company
Current
Change
Previous
ADG
Allied Defense Group
HOLD
Upgrade
SELL
ADPT
Adaptec
SELL
Downgrade
HOLD
AHC
A. H. Belo
SELL
Initiated
AVSO
Avatech Solutions
SELL
Downgrade
HOLD
CELG
Celgene
SELL
Downgrade
HOLD
CEPH
Cephalon
HOLD
Downgrade
BUY
DDR
Developers Diversified Realty
SELL
Downgrade
HOLD
EBSB
Meridian Interstate Bancorp
SELL
Initiated
FFG
FBL Financial Group
SELL
Downgrade
HOLD
FMER
FirstMerit
HOLD
Downgrade
BUY
FST
Forest Oil
SELL
Downgrade
HOLD
HOTT
Hot Topic
BUY
Upgrade
HOLD
HS
HealthSpring
HOLD
Downgrade
BUY
LQDT
Liquidity Services
HOLD
Upgrade
SELL
PNFP
Pinnacle Financial Partners
HOLD
Downgrade
BUY
SDTH
Shengdatech
SELL
Downgrade
HOLD
SHG
Shinhan Financial Group
SELL
Initiated
VIV
Vivo Participacoes
HOLD
Upgrade
SELL
WEYS
Weyco Group
HOLD
Downgrade
BUY

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