TSC Ratings provides exclusive stock, ETF and mutual fund ratings and commentary based on award-winning, proprietary tools. Its "safety first" approach to investing aims to reduce risk while seeking solid outperformance on a total return basis.

The following ratings changes were generated on Friday, April 3.

We've downgraded AngioDynamics ( ANGO), which designs, develops, manufactures and markets various therapeutic and diagnostic devices that enable physicians to treat peripheral vascular disease, tumors and other noncoronary diseases, from hold to sell. This rating is driven by the company's deteriorating net income, disappointing return on equity and weak operating cash flow.

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Net income decreased by 60.9% compared with the year-ago quarter, from $4.9 million to $1.9 million. Return on equity also decreased. Net operating cash flow fell 29.5% to $6.9 million. Gross profit margin of 62.6% has managed to decreased from the same period last year. Net profit margin od 3.9% is below what it was in the year-ago quarter.

We feel that the combination of AngioDynamics' price rise over the last year and its current price-to-earnings ratio relative to its industry tend to reduce its upside potential.

We've downgraded department store operator Macy's ( M) from hold to sell, driven by its deteriorating net income, generally weak debt management, disappointing return on equity, weakoperating cash flow and generally disappointing historical performance in the stock itself.

Net income fell to -$4.8 billion from $750 million in the year-ago quarter. The debt-to-equity ratio of 2.1 is above the industry average. The quick ratio or 0.3 implies difficulty covering short-term cash needs. ROE has decreased from the same quarter a year ago. Net operating cash flow fell 19.7% to $1.6 billion compared with the year-ago quarter.

Shares have tumbled 58.7% over the past year, underperforming the S&P 500, and earnings per share are also down. 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 Noble Energy ( NOBL), which engages in the acquisition, exploration, development, production and marketing of crude oil, natural gas and natural gas liquids, from hold to buy. This rating is driven by the company's increase in net income, notable return on equity and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Net income increased by 1.6% compared with the year-ago quarter, from $300.3 million to $305 million. ROE also improved. Revenue fell by 34.5% since the year-ago quarter. Noble has a debt-to-equity ratio of 0.5, which is higher than the industry average. The 1.3 quick ratio is sturdy. The company reported flat earnings per share in the most recent quarter, and we feel it is likely to report a decline in earnings in the coming year.

We've upgraded Taiwan Semiconductor Manufacturing ( TSM), which engages in the manufacturing, selling, packaging, testing and computer-aided designing various integrated circuits and other semiconductor devices, from hold to buy. This rating is driven by the company's largely solid financial position with reasonable debt levels by most measures, expanding profit margins, relatively strong performance when compared with the S&P 500 during the past year and notable return on equity. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.

TSM's debt-to-equity ratio of 0.03 is very low, but it is still higher than the industry average. Its 4.1 quick ratio implies an ability to cover short-term cash needs. The 62.6% gross profit margin has managed to decreased from the year-ago quarter. The 15.4% net profit margin outperformed the industry average. Revenue fell by 49.5% since the year-ago quarter, and EPS decreased. ROE also fell from the same quarter last year.

Share price has not changed much over the past year. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.

We've downgraded TTM Technologies ( TTMI), which manufactures printed circuit boards and backplane assemblies, from hold to sell. This rating 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 $11.8 million in the year-ago quarter to -$68.5 million. ROE also decreased. TTM's gross profit margin is 21.8%, a decrease from the same quarter last year. EPS declined in the most recent quarter compared with the year-ago quarter, though the consensus estimate suggests that the company's two-year trend of declining EPS should reverse in the coming year.

Shares have tumbled by 44.7% 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 include Cheesecake Factory ( CAKE), upgraded from sell to hold, and GSV ( GSVI), downgraded from hold to sell.

All ratings changes from April 3 are listed below.

 
Ticker
Company
Current
Change
Previous
ANGO AngioDynamics SELL Downgrade HOLD
BFNB Beach First NationalBancshares SELL Downgrade HOLD
CAKE Cheesecake Factory HOLD Upgrade SELL
CASB Cascade Financial SELL Downgrade HOLD
FCZA First Citizens Banc SELL Downgrade HOLD
FNRN First NorthernCommunity Bancorp SELL Downgrade HOLD
GSVI GSV SELL Downgrade HOLD
HWBK Hawthorn Bancshares SELL Downgrade HOLD
LDL Lydall SELL Downgrade HOLD
LKQX LKQ BUY Upgrade HOLD
M Macy's SELL Downgrade HOLD
NBL Noble Energy BUY Upgrade HOLD
TSM Taiwan Semiconductor BUY Upgrade HOLD
TTMI TTM Technologies SELL Downgrade HOLD
WRES Warren Resources SELL Downgrade HOLD
WSBC WesBanco HOLD Downgrade BUY
 

Note: Our quantitative model makes stock recommendations based on GAAP figures that may differ materially from data as reported by the companies themselves. As a result, rating changes are occasionally driven by so-called nonrecurring items. As always, we urge readers to use TSC Ratings' reports in conjunction with additional information to construct their opinions on the value that should be placed on any given stock.

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