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 41 U.S. common stocks for week ending June 24, 2011. 16 stocks were upgraded and 25 stocks were downgraded by our stock model.

Rating Change #10

Boston Properties ( BXP) 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, good cash flow from operations and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

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 Real Estate Investment Trusts (REITs) industry. The net income has decreased by 22.6% when compared to the same quarter one year ago, dropping from $52.72 million to $40.81 million.
  • BOSTON PROPERTIES INC's earnings per share declined by 23.7% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, BOSTON PROPERTIES INC reported lower earnings of $1.14 versus $1.75 in the prior year. This year, the market expects an improvement in earnings ($1.27 versus $1.14).
  • Compared to its closing price of one year ago, BXP's share price has jumped by 39.81%, exceeding the performance of the broader market during that same time frame. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • Net operating cash flow has significantly increased by 120.12% to $132.28 million when compared to the same quarter last year. In addition, BOSTON PROPERTIES INC has also vastly surpassed the industry average cash flow growth rate of 19.29%.
  • BXP's revenue growth has slightly outpaced the industry average of 7.0%. Since the same quarter one year prior, revenues rose by 10.1%. 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.

Boston Properties, Inc., a real estate investment trust (REIT), together with its subsidiaries, engages in the ownership and development of office properties. The company has a P/E ratio of 101.6, equal to the average real estate industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Boston has a market cap of $15.5 billion and is part of the financial sector and real estate industry. Shares are up 24% year to date as of the close of trading on Thursday.

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

Rating Change #9

Activision Blizzard ( ATVI) 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, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income and attractive valuation levels. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • The net income growth from the same quarter one year ago has significantly exceeded that of the Software industry average, but is less than that of the S&P 500. The net income increased by 32.0% when compared to the same quarter one year prior, rising from $381.00 million to $503.00 million.
  • ACTIVISION BLIZZARD INC has improved earnings per share by 40.0% 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, ACTIVISION BLIZZARD INC increased its bottom line by earning $0.31 versus $0.07 in the prior year. This year, the market expects an improvement in earnings ($0.75 versus $0.31).
  • ATVI 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. To add to this, ATVI has a quick ratio of 1.83, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The revenue growth came in higher than the industry average of 1.4%. Since the same quarter one year prior, revenues rose by 10.8%. Growth in the company's revenue appears to have helped boost the earnings per share.

Activision Blizzard, Inc., through its subsidiaries, publishes online, personal computer (PC), console, and handheld games worldwide. The company develops and publishes PC-based computer games and maintains its proprietary online-game related service, Battle.net. The company has a P/E ratio of 24.4, below the average computer software & services industry P/E ratio of 25 and above the S&P 500 P/E ratio of 17.7. Activision Blizzard has a market cap of $12.6 billion and is part of the technology sector and computer software & services industry. Shares are down 10% year to date as of the close of trading on Wednesday.

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

Rating Change #8

Owens Corning Incorporated ( OC) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its notable return on equity, largely solid financial position with reasonable debt levels by most measures and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • OWENS CORNING's earnings per share declined by 50.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, OWENS CORNING increased its bottom line by earning $7.28 versus $0.49 in the prior year. For the next year, the market is expecting a contraction of 69.6% in earnings ($2.21 versus $7.28).
  • OC, with its decline in revenue, slightly underperformed the industry average of 0.3%. Since the same quarter one year prior, revenues slightly dropped by 2.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The current debt-to-equity ratio, 0.52, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.81 is somewhat weak and could be cause for future problems.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. 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.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Building Products industry and the overall market, OWENS CORNING's return on equity significantly exceeds that of both the industry average and the S&P 500.

Owens Corning, through its subsidiaries, provides composite and building materials systems worldwide. It operates in two segments, Composites and Building Materials. The company has a P/E ratio of 5.1, equal to the average materials & construction industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Owens Corning has a market cap of $4.6 billion and is part of the industrial goods sector and materials & construction industry. Shares are up 19.1% year to date as of the close of trading on Tuesday.

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

Rating Change #7

Petrobras Argentina ( PZE) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.

Highlights from the ratings report include:
  • The gross profit margin for PETROBRAS ARGENTINA SA is rather low; currently it is at 24.30%. It has decreased significantly from the same period last year. Regardless of the weak results of the gross profit margin, the net profit margin of 16.80% is above that of the industry average.
  • In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, PETROBRAS ARGENTINA SA's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • PETROBRAS ARGENTINA SA 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, PETROBRAS ARGENTINA SA increased its bottom line by earning $1.48 versus $0.39 in the prior year. This year, the market expects an improvement in earnings ($2.18 versus $1.48).
  • 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. Looking ahead, our view is that this company's fundamentals will not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.

Petrobras Argentina S.A. operates in the oil industry worldwide. The company has a P/E ratio of 12.2, equal to the average energy industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Petrobras Argentina has a market cap of $1.9 billion and is part of the basic materials sector and energy industry. Shares are down 29% year to date as of the close of trading on Friday.

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

Rating Change #6

Bachoco Industries ( IBA) 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, revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

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 Food Products industry and the overall market on the basis of return on equity, INDUSTRIAS BACHOCO SAB DE CV has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • IBA's debt-to-equity ratio is very low at 0.04 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 3.22, which clearly demonstrates the ability to cover short-term cash needs.
  • The revenue growth significantly trails the industry average of 135.8%. Since the same quarter one year prior, revenues slightly increased by 5.1%. 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.
  • Compared to its closing price of one year ago, IBA's share price has jumped by 28.87%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, IBA should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.

Industrias Bachoco, S.A.B. de C.V., through its subsidiaries, operates as a poultry producer in Mexico. It engages in breeding, processing, and marketing of poultry products, such as chicken and table eggs; and balanced animal feed comprising swine and other products. The company has a P/E ratio of 7.5, below the average food & beverage industry P/E ratio of 8.1 and below the S&P 500 P/E ratio of 17.7. Bachoco has a market cap of $1.2 billion and is part of the consumer goods sector and food & beverage industry. Shares are up 1.5% year to date as of the close of trading on Thursday.

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

Rating Change #5

Frontier Communications Corporation-Shs Ser ( FTR) 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, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, generally poor debt management and disappointing return on equity.

Highlights from the ratings report include:
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Diversified Telecommunication Services industry and the overall market, FRONTIER COMMUNICATIONS CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Currently the debt-to-equity ratio of 1.63 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. To add to this, FTR has a quick ratio of 0.61, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
  • 45.70% is the gross profit margin for FRONTIER COMMUNICATIONS CORP which we consider to be strong. Regardless of FTR's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 4.10% trails the industry average.
  • Net operating cash flow has significantly increased by 317.46% to $514.11 million when compared to the same quarter last year. In addition, FRONTIER COMMUNICATIONS CORP has also vastly surpassed the industry average cash flow growth rate of -3.90%.
  • FTR's very impressive revenue growth greatly exceeded the industry average of 13.1%. Since the same quarter one year prior, revenues leaped by 159.1%. 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.

Frontier Communications Corporation, a communications company, provides regulated and unregulated voice, data, and video services to residential, business, and wholesale customers in the United States. The company has a P/E ratio of 56.2, above the average telecommunications industry P/E ratio of 32.8 and above the S&P 500 P/E ratio of 17.7. Frontier Communications Corporation-Shs Ser has a market cap of $7.8 billion and is part of the technology sector and telecommunications industry. Shares are down 18.5% year to date as of the close of trading on Tuesday.

You can view the full Frontier Communications Corporation-Shs Ser Ratings Report or get investment ideas from our investment research center.

Rating Change #4

UTi Worldwide ( UTIW) 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, 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, poor profit margins and weak operating cash flow.

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 Air Freight & Logistics industry. The net income has decreased by 13.2% when compared to the same quarter one year ago, dropping from $10.07 million to $8.74 million.
  • Net operating cash flow has significantly decreased to -$43.63 million or 53.20% 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.
  • Compared to its closing price of one year ago, UTIW's share price has jumped by 32.50%, 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.
  • The current debt-to-equity ratio, 0.38, is low and is below the industry average, implying that there has been successful management of debt levels. 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.
  • UTIW's revenue growth has slightly outpaced the industry average of 6.3%. Since the same quarter one year prior, revenues rose by 13.6%. 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.

UTi Worldwide Inc., through its subsidiaries, operates as a supply chain services and solutions company. The company has a P/E ratio of 29.1, above the average transportation industry P/E ratio of 28.7 and above the S&P 500 P/E ratio of 17.7. UTi Worldwide has a market cap of $2 billion and is part of the services sector and transportation industry. Shares are down 9.1% year to date as of the close of trading on Tuesday.

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

Rating Change #3

EMCOR Group ( EME) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and poor profit margins.

Highlights from the ratings report include:
  • The gross profit margin for EMCOR GROUP INC is currently extremely low, coming in at 13.30%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 1.90% trails that of the industry average.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Construction & Engineering industry and the overall market, EMCOR GROUP INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • EMCOR GROUP INC has improved earnings per share by 12.5% 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, EMCOR GROUP INC swung to a loss, reporting -$1.33 versus $2.39 in the prior year. This year, the market expects an improvement in earnings ($1.80 versus -$1.33).
  • EME's debt-to-equity ratio is very low at 0.13 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.46, which illustrates the ability to avoid short-term cash problems.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 9.3%. Since the same quarter one year prior, revenues slightly increased by 8.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.

EMCOR Group, Inc., together with its subsidiaries, provides electrical and mechanical construction and facilities services worldwide. EMCOR Group has a market cap of $1.9 billion and is part of the industrial goods sector and materials & construction industry. Shares are down 0.9% year to date as of the close of trading on Friday.

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

Rating Change #2

ViroPharma ( VPHM) 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 find that the growth in the company's earnings per share has not been good.

Highlights from the ratings report include:
  • VIROPHARMA INC 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. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, VIROPHARMA INC turned its bottom line around by earning $1.48 versus -$0.18 in the prior year. For the next year, the market is expecting a contraction of 20.9% in earnings ($1.17 versus $1.48).
  • 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 Pharmaceuticals industry and the overall market on the basis of return on equity, VIROPHARMA INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • VPHM's debt-to-equity ratio is very low at 0.17 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 5.76, which clearly demonstrates the ability to cover short-term cash needs.
  • The revenue growth greatly exceeded the industry average of 0.4%. Since the same quarter one year prior, revenues rose by 40.1%. Growth in the company's revenue appears to have helped boost the earnings per share.

ViroPharma Incorporated, a biopharmaceutical company, engages in the development and commercialization of products that address serious diseases with a focus on products used by physician specialists or in hospital settings in the United States and internationally. The company has a P/E ratio of 11.2, above the average drugs industry P/E ratio of 11.1 and below the S&P 500 P/E ratio of 17.7. ViroPharma has a market cap of $1.4 billion and is part of the health care sector and drugs industry. Shares are up 3.4% year to date as of the close of trading on Thursday.

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

Rating Change #1

Asiainfo-Linkage ( ASIA) 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 reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. When compared to other companies in the Software industry and the overall market, ASIAINFO-LINKAGE INC's return on equity is below that of both the industry average and the S&P 500.
  • ASIA's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 37.21%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, 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.
  • ASIAINFO-LINKAGE INC's earnings per share improvement from the most recent quarter was slightly positive. 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, ASIAINFO-LINKAGE INC increased its bottom line by earning $0.92 versus $0.77 in the prior year. This year, the market expects an improvement in earnings ($1.66 versus $0.92).
  • ASIA 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. To add to this, ASIA has a quick ratio of 2.14, which demonstrates the ability of the company to cover short-term liquidity needs.
  • ASIA's very impressive revenue growth greatly exceeded the industry average of 2.8%. Since the same quarter one year prior, revenues leaped by 93.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.

AsiaInfo-Linkage, Inc. provides telecommunications software solutions, and information technology (IT) security products and services for telecommunications service providers, as well as to other enterprises in China. The company has a P/E ratio of 15.7, above the average computer software & services industry P/E ratio of 14.9 and below the S&P 500 P/E ratio of 17.7. Asiainfo-Linkage has a market cap of $1 billion and is part of the technology sector and computer software & services industry. Shares are down 12.3% year to date as of the close of trading on Friday.

You can view the full Asiainfo-Linkage 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.

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