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, June 5.

We've upgraded AmerisourceBergen ( ABC) from hold to buy, driven by its growth in earnings per share, increase in net income, 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.

Earnings per share improved by 17.3% in the most recent quarter compared with the same quarter last year, and we feel that the company's two-year trend of EPS growth should continue. Net income increased by 7.1% compared with the year-ago quarter, from $133.9 million to $143.4 million. Net operating cash flow increased by 74.2% to $336.8 million, exceeding the industry average cash flow growth rate of 53.4%. AmerisourceBergen's debt-to-equity ratio of 0.4 is below the industry average, though the quick ratio of 0.5 implies a potential problem covering short-term cash needs. Return on equity improved compared with the year-ago quarter.

We've downgraded Gushan Environmental Energy ( GU) from hold to sell, driven by its unimpressive growth in net income, poor profit margins, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Net income fell to -$340,000 from $15.9 million compared with the year-ago quarter. Gushan's gross profit margin of 19% has decreased significantly from the year-ago quarter, and net profit margin of -0.8% trails the industry average. EPS declined from the year-ago quarter, and we fell the company is likely to report a decline in earnings in the coming year. Revenue fell by 15.9% since the year-ago quarter.

Shares have tumbled by 80.3% over the past year, underperforming the S&P 500 . The fact that the stock has come down in price over the past year 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 upgraded Kraft Foods ( KFT) from hold to buy, driven by its increase in net income, expanding profit margins, good cash flow from operations, growth in earnings per share and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Net income increased by 10.2% compared with the year-ago quarter, from $599 million to $660 million. Kraft's gross profit margin of 37% has increased from the year-ago quarter, and its net profit margin of 7% is above the industry average. Net operating cash flow increased by 94.93% to $423 million compared with the same quarter last year, and ROE also improved. EPS are up 28.6%, and we feel the company is poised for EPS growth in the coming year.

We've upgraded P.F. Chang's China Bistro ( PFCB) from hold to buy, driven by its solid stock price performance, growth in earnings per share, increase in net income, revenue growth and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows low profit margins.

EPS are up 36.6% compared with the year-ago quarter, and we feel that the company's two-year trend of positive EPS growth should continue. Net income increased by 38.3% compared with the same quarter a year ago, rising from $9.7 million to $13.4 million. Revenue increased by 1.3% since the same quarter last year. The company's debt-to-equity ratio of 0.2 is below the industry average.

The stock has surged 28% over the past year, outperforming the S&P 500. Although almost any stock can fall in a broad market decline, P.F. Chang's should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.

We've upgraded Wabtec ( WAB) from hold to buy, driven by its increase in net income, largely solid financial position with reasonable debt levels by most measures, notable return on equity, good cash flow from operations and growth in earnings per share. We feel these strengths outweigh the fact that the company shows low profit margins.

Net income increased by 0.5% compared with the same quarter last year, from $32.5 million to $32.7 million. Wabtec's debt-to-equity ratio of 0.6 is below the industry average, and it maintains a quick ratio of 1.2. ROE improved slightly compared with the year-ago quarter, and net operating cash flow rose significantly to -$5.7 million. Revenue dropped by 1.4% but still outperformed the industry average.

All ratings changes from June 5 are listed below.

Stock Model Rating Change Approval
Ticker
Company
Current
Change
Previous
ABC
AmerisourceBergen
BUY
Upgrade
HOLD
ADVNA
Advanta
SELL
Downgrade
HOLD
ADVNB
Advanta
SELL
Downgrade
HOLD
CHEV
Cheviot Financial
BUY
Upgrade
HOLD
DCP
Dyncorp
BUY
Upgrade
HOLD
DELL
Dell
HOLD
Upgrade
SELL
ECOL
American Ecology
BUY
Upgrade
HOLD
FL
Foot Locker
HOLD
Upgrade
SELL
GU
Gushan
SELL
Downgrade
HOLD
HCN
Health Care REIT
BUY
Upgrade
HOLD
KFT
Kraft Foods
BUY
Upgrade
HOLD
LKAI
LKA International
SELL
Downgrade
HOLD
MRM
Merrimac
HOLD
Upgrade
SELL
MRX
Medicis
HOLD
Upgrade
SELL
NCR
NCR
HOLD
Upgrade
SELL
NOVL
Novell
HOLD
Upgrade
SELL
PFCB
P.F. Chang's
BUY
Upgrade
HOLD
PSS
Collective Brands
HOLD
Upgrade
SELL
STST
Argon ST
BUY
Upgrade
HOLD
TITN
Titan Machinery
HOLD
Upgrade
SELL
TWLL
Techwell
HOLD
Upgrade
SELL
USOO
US 1 ndustries
SELL
Downgrade
HOLD
VITA
Orthovita
HOLD
Upgrade
SELL
WAB
Wabtec
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!