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 Monday, April 27.

We've upgraded Amphenol ( APH), which engages in the design, manufacture and marketing of electrical, electronic and fiber optic connectors, from hold to buy. This rating is driven by the good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company shows low profit margins.

Net operating cash flow increased 30.2% to $142.8 million compared with the same quarter last year. Revenue fell 14.4%, and EPS are also down. Amphenol's debt-to-equity ratio of 0.6 is somewhat low overall but high compared with the industry average. Its 1.3 quick ratio is sturdy. Return on equity has decreased from the year-ago quarter, implying a minor weakness ni the organization. Net income fell 23.6% compared with the year-ago quarter, from $97.5 million to $74.4 million.

We've upgraded Mexican food restaurant operator Chipotle Mexican Grill ( CMG) from hold to buy, driven by its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, increase in net income and good cash flow from operations. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Revenue rose by 16.1% since the year-ago quarter, and EPS are also up. We feel that the company's two-year trend of EPS growth should continue. Chipotle's debt-to-equity ratio of 0.01 is very low and below the industry average, implying successful management of debt levels. Its 2.4 quick ratio demonstrates its ability to cover short-term liquidity needs. Net income increased by 46.9% compared with the year-ago quarter, from $17.3 million to $25.4 million. Net operating cash flow is up 30.6% to $63 million.

We've upgraded specialty retailing company Gap ( GPS) from hold to buy, driven by its notable return on equity, largely solid financial position with reasonable debt levels by most measures, expanding profit margins and attractive valuation levels. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Return on equity has improved compared with the year-ago quarter, which can be construed as a modest strength. Gap's debt-to-equity ratio of 0.01 is very low, though it's above the industry average. Its quick ratio of 0.8 could be cause for future problems. The 38.1% gross profit margin is strong, though it has decreased from the year-ago period. The 6% net profit margin compares favorably with the industry average. EPS are down slightly compared with the year-earlier quarter, and we feel the company is likely to report a decline in earnings in the coming year.

We've upgraded real estate investment trust National Retail Properties ( NNN) from hold to buy, driven by its revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, expanding profit margins and notable return on equity. 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 9.5% since the year-ago quarter, and EPS are also up. The 0.7 debt-to-equity ratio is somewhat low and below the industry average, implying a successful effort in debt-level management. Net operating cash flow increased 141.4% to $26.5 million compared with the year-earlier quarter. The 62.3% grow profit margin has managed to decreased from the year-ago period. The 49.7% net profit margin outperformed the industry average. ROE improved slightly compared with the year-ago quarter, which can be construed as a modest strength in the organization.

We've upgraded Qualcomm ( QCOM), which designs, manufactures and markets digital wireless telecommunications products and services, from hold to buy. This rating is driven by the company's revenue growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins and good cash flow from operations. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.

Revenue rose 3.1% since the same quarter last year, though EPS declined. Qualcomm has no debt to speak of and maintains a quick ratio of 4.8, which demonstrates its ability to cover short-term cash needs. The 76% gross profit margin has increased from the same quarter last year, and the 13.5% net profit margin is above the industry average. Net operating cash flow increased 297.8% to $3.5 billion compared with the same quarter last year. Net income decreased by 55.5%, falling from $767 million to $341 million.

Other ratings changes include Steak n Shake ( SNS), upgraded from sell to hold, and J.B. Hunt Transport Services ( JBHT), upgraded from hold to buy.

All ratings changes from April 27 are listed below.

 
Ticker
Company
Current
Change
Previous
AE
Adams Resources & Energy
SELL
Downgrade
HOLD
AMWD
American Woodmark
HOLD
Upgrade
SELL
APH
Amphenol
BUY
Upgrade
HOLD
BMA
Banco Macro
HOLD
Upgrade
SELL
CATT
Catapult Communications
HOLD
Upgrade
SELL
CMG
Chipotle Mexican Grill
BUY
Upgrade
HOLD
CRN
Cornell Companies
BUY
Upgrade
HOLD
CSKI
China Sky One Medical
BUY
Upgrade
HOLD
CTCH
CommTouch Software
SELL
Downgrade
HOLD
DGICA
Donegal Group
HOLD
Downgrade
BUY
DGICB
Donegal Group
HOLD
Downgrade
BUY
EBF
Ennis
SELL
Downgrade
HOLD
EDAC
Edac Technologies
HOLD
Upgrade
SELL
EPAY
Bottomline Technologies
HOLD
Upgrade
SELL
ESE
Esco Technologies
BUY
Upgrade
HOLD
EXTR
Extreme Networks
SELL
Downgrade
HOLD
FCAP
First Capital
BUY
Upgrade
HOLD
GIII
G-III Apparel Group
HOLD
Upgrade
SELL
GPS
Gap
BUY
Upgrade
HOLD
IIN
Intricon
SELL
Downgrade
HOLD
JBHT
J.B. Hunt Transport Services
BUY
Upgrade
HOLD
MBRG
Middleburg Financial
HOLD
Upgrade
SELL
NNN
National Retail Properties
BUY
Upgrade
HOLD
PGI
Premiere Global Services
BUY
Upgrade
HOLD
QCOM
Qualcomm
BUY
Upgrade
HOLD
SLT
Sterlite Industries
HOLD
Upgrade
SELL
SNS
Steak n Shake
HOLD
Upgrade
SELL
TUNE
Microtune
SELL
Downgrade
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!

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