The following ratings changes were generated on Wednesday, Feb. 25.

We've downgraded Advanced Energy Industries ( AEIS - Get Report) from hold to sell. Advanced Energy Industries develops and produces components and products to plasma-based manufacturing processes, which are used by manufacturers of semiconductors and in industrial thin-film manufacturing processes. Our rating change is driven by the company's deteriorating net income, disappointing return on equity, poor profit margins, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Net income decreased from $4.2 million in the year-ago quarter to -$19 million in the most recent quarter, significantly underperforming the S&P 500 and the semiconductors and semiconductor equipment industry. Return on equity also decreased, a clear sign of weakness within the company. Earnings per share declined 600% compared with the year-earlier quarter, but the consensus estimate suggests that the company's two-year trend of declining EPS should reverse in the coming year. Advanced Energy Industries' gross profit margin of 26.9% is lower than desirable, having decreased significantly from the same period last year, and its net profit margin of -28.1% is significantly below the industry average.

Shares have tumbled by 48.9% 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.

We've upgraded online retailer Amazon.com ( AMZN - Get Report) from hold to by, driven by its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, increase in net income, good cash flow from operations and growth in earnings per share. 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 18.2% since the year-ago quarter, outpacing the industry average of 14.6% growth and boosting EPS by 8.3%. The company has demonstrated a two-year pattern of positive EPS growth, though we anticipate underperformance relative to this pattern in the coming year. Net income increased by 8.7% compared with the same quarter last year, from $207 million to $225 million, significantly outperforming the S&P 500 and the Internet and catalog retail industry. Net operating cash flow decreased by 36.8% to $1.6 billion. Amazon's 0.3 debt-to-equity ratio is very low, implying very successful management of debt levels.

We've downgraded electronic payment services provider Euronet Worldwide ( EEFT - Get Report) from hold to sell, driven by its deteriorating net income, disappointing return on equity, poor profit margins, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Net income decreased to -$201.8 million from $19.6 million in the year-ago quarter, significantly underperforming the S&P 500 and the IT services industry. ROE also greatly decreased, also underperforming the industry average and the S&P 500. Euronet's gross profit margin of 22.2% is rather low, though it has managed to increase since the year-ago period. The -78.9% net profit margin significantly underperformed the industry average. EPS have declined 1,194.6% compared with the year-earlier quarter, but the consensus estimate suggests that the company's two-year trend of declining EPS should reverse in the coming year.

Shares have tumbled by about 55.5% over the year, underperforming the S&P 500 during the same time period. The stock's decline 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 real estate investment trust LaSalle Hotel Properties ( LHO) from hold to sell, driven by its generally disappointing historical performance in the stock itself, feeble growth in its earnings per share, deteriorating net income, disappointing return on equity and poor profit margins.

EPS declined by 218.8% since the year-ago quarter, and we anticipate that the company's two-year trend of declining EPS should continue in the coming year. For the next year, the market is expecting a contraction of 426% in earnings. Net income fell by 116.7% since the same quarter last year, significantly underperforming the S&P 500 and the REITs industry. ROE slightly decreased, implying a minor weakness. LaSalle's gross profit margin of 5.9% is extremely low, having decreased from the year-ago quarter, and its 1.3% net profit margin is significantly below the industry average.

Shares have tumbled by 80.3% over the past year, underperforming the S&P 500, but the stock is still more expensive (when compared to its current earnings) than most other companies in its industry.

We've downgraded TRW Automotive Holdings ( TRW), which designs, manufactures, and sells automotive systems, modules and components, from hold to sell. This rating change is driven by the company's deteriorating net income, generally weak debt management, disappointing return on equity, poor profit margins and weak operating cash flow.

Net income fell to -$964 million in the most recent quarter from $56 million in the year-ago quarter, significantly underperforming the S&P 500 and the auto components industry. TRW's debt-to-equity ratio of 2.6 is very high and currently higher than the industry average, implying very poor management of debt levels within the company. TRW also maintains a poor quick ratio of 0.7, which illustrates its inability to avoid short-term cash problems. ROE has great decreased since the year-ago quarter, a signal of major weakness. TRW's 7.9% gross profit margin is extremely low, having decreased since the same quarter last year. Net operating cash flow has decline marginally to $769 million, or by 6.9%.

Other ratings changes included Dycom Industries ( DY - Get Report)and Winmark ( WINA - Get Report), both downgraded from hold to sell.

All ratings changes generated on Feb. 25 are listed below.

  
Ticker
Company
Current
Change
Previous
AEIS
Advanced Energy
SELL
Downgrade
HOLD
AMZN
Amazon.com
BUY
Upgrade
HOLD
BMS
Bemis
HOLD
Downgrade
BUY
CATM
Cardtronics
SELL
Initiated
CISG
CNinsure
SELL
Initiated
DY
Dycom Industries
SELL
Downgrade
HOLD
EEFT
Euronet Worldwide
SELL
Downgrade
HOLD
LHO
LaSalle Hotel Properties
SELL
Downgrade
HOLD
MFA
MFA Financial
HOLD
Upgrade
SELL
PHX
Panhandle Oil & Gas
HOLD
Downgrade
BUY
RDK
Ruddick
HOLD
Downgrade
BUY
TRW
TRW Automotive Hodlings
SELL
Downgrade
HOLD
VIT
Vanceinfo Technologies
SELL
Initiated
WINA
Winmark
SELL
Downgrade
HOLD

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