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 24.

We rate Quest Diagnostics ( DGX) a buy. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performanceopportunity than most stocks we cover.

The company's strengths can be seen in multiple areas, such as itsrevenue growth, growth in earnings per share, compelling growth in net income, expanding profit marginsand good cash flow from operations. Although the company may harbor some minor weaknesses, we feelthey are unlikely to have a significant impact on results.

Revenue growth has slightly outpaced the industry average of 0.4%. Since the same quarter one yearprior, revenues slightly increased by 1.3%. Growth in the company's revenue appears to have helped boostthe earnings per share.

Quest has improved earnings per share by 23.6% in the most recent quarter compared tothe same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growthover the past two years. We feel that this trend should continue. During the past fiscal year, Quest increased its bottom line by earning $3.23 versus $2.84 in the prior year. This year, the market expects an improvement in earnings ($3.70 versus $3.23).

The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500and the Health Care Providers & Services industry. The net income increased by 19.7% when compared to thesame quarter one year prior, going from $139.61 million to $167.10 million. 44.80% is the gross profit margin for Quest, which we consider to be strong. It hasincreased from the same quarter the previous year. Along with this, the net profit margin of 9.20% is abovethat of the industry average.

Net operating cash flow has significantly increased by 72.75% to $272.80 million when compared to the samequarter last year. Despite an increase in cash flow, Quest's cash flow growth rate is stilllower than the industry average growth rate of 117.40%.

We rate Logitech International ( LOGI) a sell. This is driven by a few notable weaknesses, which webelieve should have a greater impact than any strengths, and could make it more difficult for investors toachieve positive results compared to most of the stocks we cover.

The company's weaknesses can be seenin multiple areas, such as its generally disappointing historical performance in the stock itself, deterioratingnet income, poor profit margins, weak operating cash flow and disappointing return on equity.

Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over thelast year: it has tumbled by 63.86%, worse than the S&P 500's performance. Consistent with the plunge in thestock price, the company's earnings per share are down 162.50% compared to the year-earlier quarter.Despite the heavy decline in its share price, this stock is still more expensive (when compared to its currentearnings) than most other companies in its industry.

The company, on the basis of change in net income from the same quarter one year ago, has significantlyunderperformed compared to the Computers & Peripherals industry average, but is greater than that of theS&P 500. The net income has significantly decreased by 158.1% when compared to the same quarter one yearago, falling from $60.34 million to a loss of $35.08 million.

The gross profit margin for Logitech is currently lower than what is desirable, comingin at 28.30%. It has decreased from the same quarter the previous year. Along with this, the net profit marginof negative 8.60% is significantly below that of the industry average.

Net operating cash flow has significantly decreased to $25.62 million or 75.16% when compared to the samequarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. Thisis a signal of major weakness within the corporation.

Compared to other companies in the Computers &Peripherals industry and the overall market on the basis of return on equity, Logitechhas underperformed in comparison with the industry average, but has exceeded that of the S&P 500.

We rate Philip Morris International ( PM). This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achievepositive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share and generally weak debt management.

Earnings per share declined by 6.3% in the most recent quarter comparedto the same quarter a year ago. For the next year, the market is expecting a contraction of 9.5% in earnings($3 versus $3.31).

The debt-to-equity ratio is very high at 2.38 and currently higher than the industry average, implying that thereis very poor management of debt levels within the company. The company, on the basis of change in net income from the same quarter one year ago, has significantlyoutperformed against the S&P 500 and exceeded that of the Tobacco industry average. The net income hasdecreased by 11.8% when compared to the same quarter one year ago, dropping from $1,673.00 million to $1,476.00 million.

Regardless of the drop in revenue, the company managed to outperform against the industry average of 6.9%.Since the same quarter one year prior, revenues slightly dropped by 5.5%. The declining revenue appears tohave seeped down to the company's bottom line, decreasing earnings per share.

The share price has plunged 28.85% over the past year. The probable causes include at least two: First, thebroader market, which declined even more sharply than PM. And second, the company reported weakearnings per share results.

We rate Bank of Marin Bancorp ( BMRC) a buy. This is driven by multiple strengths, which we believeshould have a greater impact than any weaknesses, and should give investors a better performanceopportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as itsexpanding profit margins and notable return on equity. We feel these strengths outweigh the fact that thecompany has had lackluster performance in the stock itself.

The gross profit margin for Bank of Marin is currently very high, coming in at 81.30%. It hasincreased from the same quarter the previous year.Weakness in the company's revenue seemsto have hurt the bottom line, decreasing earnings per share.The company's current return on equity has slightly decreased from the same quarter one year prior. Thisimplies a minor weakness in the organization. Compared to other companies in the Commercial Banksindustry and the overall market, Bank of Marin's return on equity exceeds that of both theindustry average and the S&P 500.

The change in net income from the same quarter one year ago has significantly exceeded that of the S&P 500and the Commercial Banks industry. The net income has decreased by 1.4% when compared to the samequarter one year ago, dropping from $3.28 million to $3.23 million.

Earnings per share declined by 41.3% in the most recent quarter compared tothe same quarter a year ago. Stable earnings per share over the past year indicate the company has soundmanagement over its earnings and share float. Despite the past stability of earnings, the consensus estimateanticipates a weakening in earnings. During the past fiscal year, Bank of Marin increased itsbottom line by earning $2.32 versus $2.31 in the prior year. For the next year, the market is expecting acontraction of 7.3% in earnings ($2.15 versus $2.32).

We rate Staples ( SPLS) a buy. The company's strengths can be seen in multiple areas, such as its robust revenuegrowth, good cash flow from operations, attractive valuation levels and notable return on equity. We feelthese strengths outweigh the fact that the company shows low profit margins.

The revenue growth came in higher than the industry average of 12.8%. Since the same quarter one yearprior, revenues rose by 15.9%. This growth in revenue does not appear to have trickled down to thecompany's bottom line, displayed by a decline in earnings per share.

Net operating cash flow has slightly increased to $520.72 million or 1.61% when compared to the samequarter last year. In addition, Staples has also vastly surpassed the industry average cash flow growthrate of negative 49.26%.

Staples' earnings per share declined by 14.9% in the most recent quarter compared to the samequarter a year ago. The company has suffered a declining pattern of earnings per share over the past twoyears. However, we anticipate this trend to reverse over the coming year. During the past fiscal year,Staples reported lower earnings of $1.13 versus $1.39 in the prior year. This year, the market expects animprovement in earnings ($1.14 versus $1.13).

The company's current return on equity has slightly decreased from the same quarter one year prior. Thisimplies a minor weakness in the organization. When compared to other companies in the Specialty Retailindustry and the overall market, Staples return on equity exceeds that of the industry average andsignificantly exceeds that of the S&P 500.

All ratings changes from April 24 are listed below:

 
Ticker
Company
Current
Change
Previous
AVCT AVOCENT CORP SELL Downgrade HOLD
BJRI BJ'S RESTAURANTS INC BUY Upgrade HOLD
BMRC BANK OF MARIN BANCORP BUY Upgrade HOLD
CNW CON-WAY INC FROZEN HOLD
COLB COLUMBIA BANKING SYSTEM INC SELL Downgrade HOLD
CZFC CITIZENS FIRST CORP FROZEN HOLD
DGX QUEST DIAGNOSTICS INC BUY Upgrade HOLD
DLA DELTA APPAREL INC HOLD Upgrade SELL
DXR DAXOR CORP HOLD Downgrade BUY
ES ENERGYSOLUTIONS INC HOLD Upgrade SELL
FCTY 1ST CENTURY BANCSHARES INC SELL Initiated  
FIC FAIR ISAAC CORP HOLD Upgrade SELL
FSGI FIRST SECURITY GROUP INC SELL Downgrade HOLD
GHL GREENHILL & CO INC FROZEN BUY
GILT GILAT SATELLITE NETWORKS LTD SELL Downgrade HOLD
III INFORMATION SERVICES GROUP SELL Initiated
KVHI KVH INDUSTRIES INC SELL Downgrade HOLD
LOGI LOGITECH INTERNATIONAL SA SELL Downgrade HOLD
MGI MONEYGRAM INTERNATIONAL INC SELL Downgrade HOLD
NPD CHINA NEPSTAR CHAIN DRUG-ADS HOLD Upgrade SELL
OFLX OMEGA FLEX INC FROZEN BUY
OMNI OMNI ENERGY SERVICES CORP SELL Downgrade HOLD
OSP OSG AMERICA LP HOLD Upgrade SELL
OXY OCCIDENTAL PETROLEUM CORP FROZEN HOLD
PM PHILIP MORRIS INTERNATIONAL SELL Initiated
PTIX PERFORMANCE TECHNOLOGIES INC SELL Downgrade HOLD
SCVL SHOE CARNIVAL INC HOLD Upgrade SELL
SPLS STAPLES INC BUY Upgrade HOLD
SPSS SPSS INC BUY Upgrade HOLD
SR STANDARD REGISTER CO SELL Downgrade HOLD
STI SUNTRUST BANKS INC SELL Downgrade HOLD
STON STONEMOR PARTNERS LP HOLD Upgrade SELL
SWKS SKYWORKS SOLUTIONS INC BUY Upgrade HOLD
TCLP TC PIPELINES LP BUY Upgrade HOLD
USLM U S LIME & MINERALS BUY Upgrade HOLD

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.

TheStreet.com Ratings, recently cited for Best Stock Selection from October 2007 through February 2009 , is an independent research provider that combines fundamental and technical analysis to offer investors tremendous value in volatile times. To see how your portfolio can use this research, click here now!

This article was written by a staff member of TheStreet.com.

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