TheStreet Ratings Top 10 Rating Changes

NEW YORK ( TheStreet Ratings) -- Every trading day TheStreet Ratings' stock model reviews the investment ratings on around 4,900 U.S. traded stocks for potential upgrades or downgrades based on the latest available financial results and trading activity.

TheStreet Ratings released rating changes on 68 U.S. common stocks for week ending June 17, 2011. 26 stocks were upgraded and 42 stocks were downgraded by our stock model.

Rating Change #10

Ryanair Holdings ( RYAAY) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and increase in stock price during the past year. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Airlines industry and the overall market, RYANAIR HOLDINGS PLC's return on equity is below that of both the industry average and the S&P 500.
  • Even though the current debt-to-equity ratio is 1.24, it is still below the industry average, suggesting that this level of debt is acceptable within the Airlines industry. Despite the fact that RYAAY's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.64 is high and demonstrates strong liquidity.
  • Net operating cash flow has increased to $820.42 million or 38.50% when compared to the same quarter last year. Despite an increase in cash flow, RYANAIR HOLDINGS PLC's average is still marginally south of the industry average growth rate of 42.10%.
  • RYANAIR HOLDINGS PLC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, RYANAIR HOLDINGS PLC increased its bottom line by earning $1.78 versus $1.39 in the prior year. This year, the market expects an improvement in earnings ($2.12 versus $1.78).
  • RYAAY's very impressive revenue growth greatly exceeded the industry average of 39.2%. Since the same quarter one year prior, revenues leaped by 76.6%. Growth in the company's revenue appears to have helped boost the earnings per share.

Ryanair Holdings plc, together with its subsidiaries, operates a low-fares scheduled passenger airline in Ireland. The company has a P/E ratio of 21.5, above the average transportation industry P/E ratio of 16.7 and above the S&P 500 P/E ratio of 17.7. Ryanair has a market cap of $8.9 billion and is part of the services sector and transportation industry. Shares are down 2.7% year to date as of the close of trading on Tuesday.

You can view the full Ryanair Ratings Report or get investment ideas from our investment research center.

Rating Change #9

Hanesbrands ( HBI) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, attractive valuation levels, impressive record of earnings per share growth and compelling growth in net income. We feel these strengths outweigh the fact that the company has had generally poor debt management on most measures that we evaluated.

Highlights from the ratings report include:
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Textiles, Apparel & Luxury Goods industry and the overall market, HANESBRANDS INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the Textiles, Apparel & Luxury Goods industry average, but is less than that of the S&P 500. The net income increased by 31.8% when compared to the same quarter one year prior, rising from $36.51 million to $48.11 million.
  • HANESBRANDS INC has improved earnings per share by 32.4% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, HANESBRANDS INC increased its bottom line by earning $2.16 versus $0.54 in the prior year. This year, the market expects an improvement in earnings ($2.84 versus $2.16).
  • HBI's revenue growth has slightly outpaced the industry average of 3.4%. Since the same quarter one year prior, revenues rose by 11.7%. Growth in the company's revenue appears to have helped boost the earnings per share.

Hanesbrands Inc., a consumer goods company, engages in the design, manufacture, sourcing, and sale of apparel essentials in the United States and internationally. The company has a P/E ratio of 11.9, equal to the average consumer non-durables industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Hanesbrands has a market cap of $2.6 billion and is part of the consumer goods sector and consumer non-durables industry. Shares are up 6.9% year to date as of the close of trading on Tuesday.

You can view the full Hanesbrands Ratings Report or get investment ideas from our investment research center.

Rating Change #8

CVR Energy ( CVI) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, compelling growth in net income, solid stock price performance, impressive record of earnings per share growth 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.

Highlights from the ratings report include:
  • CVI's debt-to-equity ratio of 0.63 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.77 is weak.
  • CVR ENERGY INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, CVR ENERGY INC reported lower earnings of $0.17 versus $0.80 in the prior year. This year, the market expects an improvement in earnings ($2.57 versus $0.17).
  • Powered by its strong earnings growth of 471.42% and other important driving factors, this stock has surged by 185.67% over the past year, outperforming the rise in the S&P 500 Index during the same period. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 470.4% when compared to the same quarter one year prior, rising from -$12.36 million to $45.79 million.
  • CVI's revenue growth has slightly outpaced the industry average of 23.6%. Since the same quarter one year prior, revenues rose by 30.5%. Growth in the company's revenue appears to have helped boost the earnings per share.

CVR Energy, Inc., together with its subsidiaries, refines and markets transportation fuels in the United States. The company also produces and markets nitrogen fertilizer products. It operates through two segments, Petroleum and Nitrogen Fertilizer. The company has a P/E ratio of 25.5, below the average energy industry P/E ratio of 26.2 and above the S&P 500 P/E ratio of 17.7. CVR Energy has a market cap of $1.9 billion and is part of the basic materials sector and energy industry. Shares are up 49.8% year to date as of the close of trading on Wednesday.

You can view the full CVR Energy Ratings Report or get investment ideas from our investment research center.

Rating Change #7

Actuant Corporation ( ATU) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, robust revenue growth, attractive valuation levels and good cash flow from operations. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:
  • Net operating cash flow has increased to $74.80 million or 44.71% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 2.65%.
  • ATU's revenue growth trails the industry average of 50.0%. Since the same quarter one year prior, revenues rose by 38.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • ACTUANT CORP has improved earnings per share by 30.8% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, ACTUANT CORP increased its bottom line by earning $0.98 versus $0.40 in the prior year. This year, the market expects an improvement in earnings ($1.58 versus $0.98).
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.

Actuant Corporation manufactures industrial products and systems worldwide. Its Industrial segment involves in the design, manufacture, and distribution of hydraulic and mechanical tools to the maintenance, industrial, infrastructure, and production automation markets. The company has a P/E ratio of 17.2, above the average industrial industry P/E ratio of 16.8 and below the S&P 500 P/E ratio of 17.7. Actuant has a market cap of $1.6 billion and is part of the industrial goods sector and industrial industry. Shares are down 9.6% year to date as of the close of trading on Friday.

You can view the full Actuant Ratings Report or get investment ideas from our investment research center.

Rating Change #6

Brunswick Corporation ( BC) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow, generally poor debt management and poor profit margins.

Highlights from the ratings report include:
  • Net operating cash flow has significantly decreased to -$83.10 million or 395.72% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The debt-to-equity ratio is very high at 6.58 and currently higher than the industry average, implying that there is very poor management of debt levels within the company. Even though the debt-to-equity ratio is weak, BC's quick ratio is somewhat strong at 1.01, demonstrating the ability to handle short-term liquidity needs.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • BRUNSWICK CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, BRUNSWICK CORP continued to lose money by earning -$1.25 versus -$6.62 in the prior year. This year, the market expects an improvement in earnings ($0.45 versus -$1.25).
  • The revenue growth came in higher than the industry average of 6.6%. Since the same quarter one year prior, revenues rose by 16.8%. Growth in the company's revenue appears to have helped boost the earnings per share.

Brunswick Corporation provides recreation products worldwide. Brunswick has a market cap of $1.5 billion and is part of the consumer goods sector and consumer durables industry. Shares are down 8.5% year to date as of the close of trading on Tuesday.

You can view the full Brunswick Ratings Report or get investment ideas from our investment research center.

Rating Change #5

Toyota Motor Corporation ( TM) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, poor profit margins and feeble growth in the company's earnings per share.

Highlights from the ratings report include:
  • The gross profit margin for TOYOTA MOTOR CORP is rather low; currently it is at 18.30%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 0.50% trails that of the industry average.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Automobiles industry. The net income has significantly decreased by 79.5% when compared to the same quarter one year ago, falling from $1,198.00 million to $245.00 million.
  • Even though the current debt-to-equity ratio is 1.20, it is still below the industry average, suggesting that this level of debt is acceptable within the Automobiles industry. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.87 is weak.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 6.8%. Since the same quarter one year prior, revenues slightly dropped by 4.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Net operating cash flow has increased to $6,888.00 million or 28.62% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -1.93%.

Toyota Motor Corporation engages in the design, manufacture, and sale of sedans, minivans, compact cars, sport-utility vehicles, trucks, and related parts and accessories primarily in North America, Europe, and Asia. The company has a P/E ratio of 56, above the average automotive industry P/E ratio of 25.7 and above the S&P 500 P/E ratio of 17.7. Toyota has a market cap of $126.5 billion and is part of the consumer goods sector and automotive industry. Shares are up 1.4% year to date as of the close of trading on Tuesday.

You can view the full Toyota Ratings Report or get investment ideas from our investment research center.

Rating Change #4

Nucor Corp ( NUE) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and robust revenue growth. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and poor profit margins.

Highlights from the ratings report include:
  • NUE has underperformed the S&P 500 Index, declining 7.44% from its price level of one year ago. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
  • The gross profit margin for NUCOR CORP is currently extremely low, coming in at 12.10%. Regardless of NUE's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, NUE's net profit margin of 3.30% is significantly lower than the same period one year prior.
  • Despite currently having a low debt-to-equity ratio of 0.59, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that NUE's debt-to-equity ratio is mixed in its results, the company's quick ratio of 2.24 is high and demonstrates strong liquidity.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Metals & Mining industry. The net income increased by 416.2% when compared to the same quarter one year prior, rising from $30.96 million to $159.84 million.
  • NUCOR CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, NUCOR CORP turned its bottom line around by earning $0.42 versus -$0.95 in the prior year. This year, the market expects an improvement in earnings ($2.80 versus $0.42).

Nucor Corporation, together with its subsidiaries, engages in the manufacture and sale of steel and steel products in North America and internationally. It operates through three segments: Steel Mills, Steel Products, and Raw Materials. The company has a P/E ratio of 48.8, equal to the average metals & mining industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Nucor has a market cap of $12.6 billion and is part of the basic materials sector and metals & mining industry. Shares are down 9.9% year to date as of the close of trading on Tuesday.

You can view the full Nucor Ratings Report or get investment ideas from our investment research center.

Rating Change #3

Baytex Energy ( BTE) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and generally poor debt management.

Highlights from the ratings report include:
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 98.2% when compared to the same quarter one year ago, falling from $51.95 million to $0.95 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, BAYTEX ENERGY CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • Compared to its closing price of one year ago, BTE's share price has jumped by 61.83%, exceeding the performance of the broader market during that same time frame. Setting our sights on the months ahead, however, we feel that the stock's sharp appreciation over the last year has driven it to a price level which is now relatively expensive compared to the rest of its industry. The implication is that its reduced upside potential is not good enough to warrant further investment at this time.
  • Net operating cash flow has increased to $119.90 million or 27.35% when compared to the same quarter last year. In addition, BAYTEX ENERGY CORP has also modestly surpassed the industry average cash flow growth rate of 25.47%.
  • BTE's revenue growth trails the industry average of 23.6%. Since the same quarter one year prior, revenues slightly increased by 9.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.

Baytex Energy Corp., through its subsidiaries, engages in the acquisition, exploration, development, and production of petroleum and natural gas in the Western Canadian Sedimentary Basin and the United States. The company has a P/E ratio of 38.5, below the average energy industry P/E ratio of 46.5 and above the S&P 500 P/E ratio of 17.7. Baytex Energy has a market cap of $5.9 billion and is part of the basic materials sector and energy industry. Shares are up 7.3% year to date as of the close of trading on Tuesday.

You can view the full Baytex Energy Ratings Report or get investment ideas from our investment research center.

Rating Change #2

Ariba ( ARBA) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, disappointing return on equity and weak operating cash flow.

Highlights from the ratings report include:
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Software industry and the overall market, ARIBA INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Software industry. The net income has significantly decreased by 100.0% when compared to the same quarter one year ago, falling from $5.75 million to $0.00 million.
  • Compared to its closing price of one year ago, ARBA's share price has jumped by 92.87%, exceeding the performance of the broader market during that same time frame. Setting our sights on the months ahead, however, we feel that the stock's sharp appreciation over the last year has driven it to a price level which is now relatively expensive compared to the rest of its industry. The implication is that its reduced upside potential is not good enough to warrant further investment at this time.
  • ARBA has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.12, which illustrates the ability to avoid short-term cash problems.
  • The revenue growth greatly exceeded the industry average of 1.1%. Since the same quarter one year prior, revenues rose by 40.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.

Ariba, Inc., together with its subsidiaries, provides collaborative business commerce solutions for buying and selling goods and services. The company has a P/E ratio of 167.1, above the average internet industry P/E ratio of 55.7 and above the S&P 500 P/E ratio of 17.7. Ariba has a market cap of $2.9 billion and is part of the technology sector and internet industry. Shares are up 27.8% year to date as of the close of trading on Tuesday.

You can view the full Ariba Ratings Report or get investment ideas from our investment research center.

Rating Change #1

Validus Holdings ( VR) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, weak operating cash flow and deteriorating net income.

Highlights from the ratings report include:
  • VALIDUS HOLDINGS LTD has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, VALIDUS HOLDINGS LTD reported lower earnings of $3.49 versus $9.38 in the prior year. For the next year, the market is expecting a contraction of 49.9% in earnings ($1.75 versus $3.49).
  • Net operating cash flow has declined marginally to $168.56 million or 8.37% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • VR's debt-to-equity ratio is very low at 0.16 and is currently below that of the industry average, implying that there has been very successful management of debt levels.

Validus Holdings, Ltd., through its subsidiaries, provides reinsurance and insurance coverage in the property, marine, and specialty lines markets worldwide. The company has a P/E ratio of 11.5, above the average insurance industry P/E ratio of 11.2 and below the S&P 500 P/E ratio of 17.7. Validus has a market cap of $2.9 billion and is part of the financial sector and insurance industry. Shares are down 2.6% year to date as of the close of trading on Friday.

You can view the full Validus Ratings Report or get investment ideas from our investment research center.

-- Reported by Kevin Baker in Jupiter, Fla.

For additional Investment Research check out our Ratings Research Center.

For all other upgrades and downgrades made by TheStreet Ratings Model today check out our upgrades and downgrades list.
Kevin Baker became the senior financial analyst for TheStreet Ratings upon the August 2006 acquisition of Weiss Ratings by TheStreet.com, covering equity and mutual fund ratings. He joined the Weiss Group in 1997 as a banking and brokerage analyst. In 1999, he created the Weiss Group's first ratings to gauge the level of risk in U.S. equities. Baker received a B.S. degree in management from Rensselaer Polytechnic Institute and an M.B.A. with a finance specialization from Nova Southeastern University.