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 31 U.S. common stocks for week ending July 1, 2011. 16 stocks were upgraded and 15 stocks were downgraded by our stock model.

Rating Change #10

CNinsure ( CISG) 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, largely solid financial position with reasonable debt levels by most measures, 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 lackluster performance in the stock itself.

Highlights from the ratings report include:
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Insurance industry. The net income increased by 272.8% when compared to the same quarter one year prior, rising from $9.87 million to $36.78 million.
  • CNINSURE INC -ADS has improved earnings per share by 31.6% 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, CNINSURE INC -ADS increased its bottom line by earning $1.27 versus $0.95 in the prior year. This year, the market expects an improvement in earnings ($1.51 versus $1.27).
  • CISG 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 this, the company maintains a quick ratio of 12.37, which clearly demonstrates the ability to cover short-term cash needs.
  • The revenue growth came in higher than the industry average of 8.6%. Since the same quarter one year prior, revenues rose by 33.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.

CNinsure Inc., together with its subsidiaries, provides insurance brokerage and agency services, and insurance claims adjusting services in the People's Republic of China. The company has a P/E ratio of 12.2, above the average insurance industry P/E ratio of 8.8 and below the S&P 500 P/E ratio of 17.7. CNinsure has a market cap of $792.6 million and is part of the financial sector and insurance industry. Shares are down 9.8% year to date as of the close of trading on Tuesday.

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

Rating Change #9

American Greetings Corporation ( AM) 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, attractive valuation levels, expanding profit margins, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • 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 current debt-to-equity ratio, 0.31, 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 0.99 is somewhat weak and could be cause for future problems.
  • The gross profit margin for AMERICAN GREETINGS is rather high; currently it is at 60.70%. It has increased from the same quarter the previous year.
  • The revenue growth came in higher than the industry average of 13.9%. Since the same quarter one year prior, revenues slightly increased by 0.6%. 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.

American Greetings Corporation, together with its subsidiaries, engages in the design, manufacture, and sale of greeting cards and other social expression products worldwide. The company has a P/E ratio of 11.2, equal to the average diversified services industry P/E ratio and below the S&P 500 P/E ratio of 17.7. American Greetings has a market cap of $888.4 million and is part of the services sector and diversified services industry. Shares are up 10.8% year to date as of the close of trading on Tuesday.

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

Rating Change #8

LogMeIn ( LOGM) 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, largely solid financial position with reasonable debt levels by most measures, expanding profit margins, good cash flow from operations 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:
  • 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. Compared to other companies in the Internet Software & Services industry and the overall market on the basis of return on equity, LOGMEIN INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • Net operating cash flow has increased to $8.39 million or 13.70% when compared to the same quarter last year. Despite an increase in cash flow, LOGMEIN INC's average is still marginally south of the industry average growth rate of 16.50%.
  • The gross profit margin for LOGMEIN INC is currently very high, coming in at 94.00%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -0.20% is in-line with the industry average.
  • LOGM 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 this, the company maintains a quick ratio of 2.99, which clearly demonstrates the ability to cover short-term cash needs.
  • LOGM's revenue growth has slightly outpaced the industry average of 20.2%. Since the same quarter one year prior, revenues rose by 26.8%. 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.

LogMeIn, Inc. provides on-demand, remote-connectivity solutions to small and medium-sized businesses, information technology (IT) service providers, and consumers in the United States and internationally. LogMeIn has a market cap of $908.9 million and is part of the technology sector and computer software & services industry. Shares are down 13% year to date as of the close of trading on Friday.

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

Rating Change #7

Ariba ( ARBA) 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, largely solid financial position with reasonable debt levels by most measures, solid stock price performance and expanding profit margins. 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 gross profit margin for ARIBA INC is rather high; currently it is at 68.40%. Regardless of ARBA's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ARBA's net profit margin of 0.00% is significantly lower than the same period one year prior.
  • ARIBA INC 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. 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, ARIBA INC increased its bottom line by earning $0.17 versus $0.09 in the prior year. This year, the market expects an improvement in earnings ($0.80 versus $0.17).
  • Compared to its closing price of one year ago, ARBA's share price has jumped by 87.65%, exceeding the performance of the broader market during that same time frame. 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.
  • 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 3.1%. 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 184, above the average internet industry P/E ratio of 61.3 and above the S&P 500 P/E ratio of 17.7. Ariba has a market cap of $3.2 billion and is part of the technology sector and internet industry. Shares are up 41.7% 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 #6

FedEx Corporation ( FDX) 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, solid stock price performance, impressive record of earnings per share growth and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • Net operating cash flow has increased to $1,584.00 million or 28.78% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -2.80%.
  • FEDEX CORP has improved earnings per share by 31.6% 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, FEDEX CORP increased its bottom line by earning $4.57 versus $3.77 in the prior year. This year, the market expects an improvement in earnings ($6.60 versus $4.57).
  • 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.
  • FDX's debt-to-equity ratio is very low at 0.11 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 1.42, which illustrates the ability to avoid short-term cash problems.
  • FDX's revenue growth has slightly outpaced the industry average of 6.7%. Since the same quarter one year prior, revenues rose by 11.9%. Growth in the company's revenue appears to have helped boost the earnings per share.

FedEx Corporation provides transportation, e-commerce, and business services in the United States and internationally. It operates in four segments: FedEx Express, FedEx Ground, FedEx Freight, and FedEx Services. The company has a P/E ratio of 18.7, below the average transportation industry P/E ratio of 20.1 and above the S&P 500 P/E ratio of 17.7. FedEx has a market cap of $29 billion and is part of the services sector and transportation industry. Shares are down 0.2% year to date as of the close of trading on Tuesday.

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

Rating Change #5

Spreadtrum Communications ( SPRD) 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, solid stock price performance and impressive record of earnings per share growth. 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:
  • 42.20% is the gross profit margin for SPREADTRUM COMMUNICATNS -ADR which we consider to be strong. Regardless of SPRD'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 20.10% trails the industry average.
  • Although SPRD's debt-to-equity ratio of 0.20 is very low, it is currently higher than that of the industry average. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.79 is somewhat weak and could be cause for future problems.
  • Powered by its strong earnings growth of 284.61% and other important driving factors, this stock has surged by 68.00% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • SPRD's very impressive revenue growth greatly exceeded the industry average of 0.2%. Since the same quarter one year prior, revenues leaped by 163.0%. Growth in the company's revenue appears to have helped boost the earnings per share.

Spreadtrum Communications, Inc., a fabless semiconductor company, designs, develops, and markets baseband processors, radio frequency (RF) transceivers, and turnkey solutions for the wireless communications and mobile television markets. The company has a P/E ratio of 7.6, above the average electronics industry P/E ratio of 4.7 and below the S&P 500 P/E ratio of 17.7. Spreadtrum has a market cap of $602.9 million and is part of the technology sector and electronics industry. Shares are down 25.1% year to date as of the close of trading on Thursday.

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

Rating Change #4

Partner Communications Company ( PTNR) 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, notable return on equity and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, generally poor debt management and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • The debt-to-equity ratio is very high at 8.27 and currently higher than the industry average, implying that there is very poor management of debt levels within the company. To add to this, PTNR has a quick ratio of 0.61, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
  • 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 Wireless Telecommunication Services industry. The net income has decreased by 20.6% when compared to the same quarter one year ago, dropping from $91.02 million to $72.31 million.
  • PARTNER COMMUNICATIONS CO's earnings per share declined by 20.7% 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, PARTNER COMMUNICATIONS CO increased its bottom line by earning $2.24 versus $1.95 in the prior year. This year, the market expects an improvement in earnings ($6.61 versus $2.24).
  • 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 Wireless Telecommunication Services industry and the overall market, PARTNER COMMUNICATIONS CO's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The revenue growth significantly trails the industry average of 84.5%. Since the same quarter one year prior, revenues rose by 17.6%. 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.

Partner Communications Company Ltd. provides various telecommunications services in Israel. It offers cellular telephony services on GSM/GPRS and UMTS/HSDPA networks. The company has a P/E ratio of 6.7, below the average telecommunications industry P/E ratio of 7.2 and below the S&P 500 P/E ratio of 17.7. Partner has a market cap of $2.3 billion and is part of the technology sector and telecommunications industry. Shares are down 27.4% year to date as of the close of trading on Wednesday.

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

Rating Change #3

Allied Nevada Gold ( ANV) 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 premium valuation.

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. When compared to other companies in the Metals & Mining industry and the overall market, ALLIED NEVADA GOLD CORP's return on equity is below that of both the industry average and the S&P 500.
  • Compared to its closing price of one year ago, ANV's share price has jumped by 48.48%, 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.
  • ANV's debt-to-equity ratio is very low at 0.05 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 14.18, which clearly demonstrates the ability to cover short-term cash needs.
  • ANV's revenue growth trails the industry average of 49.8%. Since the same quarter one year prior, revenues rose by 36.1%. 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.

Allied Nevada Gold Corp., together with its subsidiaries, engages in the evaluation, acquisition, exploration, and advancement of gold exploration and development projects in the State of Nevada. The company has a P/E ratio of 92.5, above the average metals & mining industry P/E ratio of 90 and above the S&P 500 P/E ratio of 17.7. Allied Nevada has a market cap of $3 billion and is part of the basic materials sector and metals & mining industry. Shares are up 26.3% year to date as of the close of trading on Tuesday.

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

Rating Change #2

Axis Capital Holdings ( AXS) 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 reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow.

Highlights from the ratings report include:
  • Net operating cash flow has decreased to $277.69 million or 17.22% 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.
  • 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. When compared to other companies in the Insurance industry and the overall market, AXIS CAPITAL HOLDINGS LTD's return on equity is below that of both the industry average and the S&P 500.
  • AXS's debt-to-equity ratio is very low at 0.19 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
  • AXS's revenue growth has slightly outpaced the industry average of 8.6%. Since the same quarter one year prior, revenues rose by 13.7%. 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.

AXIS Capital Holdings Limited, through its subsidiaries, provides various insurance and reinsurance products to insureds and reinsureds worldwide. It operates in two segments, Insurance and Reinsurance. The company has a P/E ratio of 16.8, above the average insurance industry P/E ratio of 16.4 and below the S&P 500 P/E ratio of 17.7. Axis has a market cap of $4 billion and is part of the financial sector and insurance industry. Shares are down 12.7% year to date as of the close of trading on Thursday.

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

Rating Change #1

Southwest Airlines Company ( LUV) 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 good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, relatively poor performance when compared with the S&P 500 during the past year and poor profit margins.

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 Airlines industry. The net income has significantly decreased by 54.5% when compared to the same quarter one year ago, falling from $11.00 million to $5.00 million.
  • In its most recent trading session, LUV has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry, implying reduced upside potential.
  • SOUTHWEST AIRLINES reported flat earnings per share in the most recent quarter. 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, SOUTHWEST AIRLINES increased its bottom line by earning $0.61 versus $0.14 in the prior year. This year, the market expects an improvement in earnings ($0.67 versus $0.61).
  • The current debt-to-equity ratio, 0.51, 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 1.09, which illustrates the ability to avoid short-term cash problems.
  • LUV's revenue growth trails the industry average of 40.3%. Since the same quarter one year prior, revenues rose by 18.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.

Southwest Airlines Co. operates as a passenger airline that provides scheduled air transportation in the United States. As of December 31, 2010, the company operated 548 Boeing 737 aircraft and provided service to 69 cities in 35 states. The company has a P/E ratio of 18.7, below the average transportation industry P/E ratio of 19 and above the S&P 500 P/E ratio of 17.7. Southwest Airlines has a market cap of $8.5 billion and is part of the services sector and transportation industry. Shares are down 11.9% year to date as of the close of trading on Friday.

You can view the full Southwest Airlines 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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