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 28 U.S. common stocks for week ending July 8, 2011. 14 stocks were upgraded and 14 stocks were downgraded by our stock model.

Rating Change #10

Haynes International ( HAYN) has been upgraded by TheStreet Ratings from hold to buy. 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, robust revenue growth, 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 shows weak operating cash flow.

Highlights from the ratings report include:
  • Powered by its strong earnings growth of 537.50% and other important driving factors, this stock has surged by 122.80% over the past year, outperforming the rise in the S&P 500 Index during the same period. 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.
  • HAYN's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, HAYN has a quick ratio of 1.70, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 49.5%. Since the same quarter one year prior, revenues rose by 47.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 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 550.2% when compared to the same quarter one year prior, rising from $0.96 million to $6.22 million.
  • HAYNES INTERNATIONAL 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 year. We feel that this trend should continue. During the past fiscal year, HAYNES INTERNATIONAL INC turned its bottom line around by earning $0.72 versus -$4.36 in the prior year. This year, the market expects an improvement in earnings ($2.36 versus $0.72).

Haynes International Inc. develops, manufactures, markets, and distributes high-performance nickel-and cobalt-based alloys in sheet, coil, and plate forms for use in the various industries worldwide. The company has a P/E ratio of 36.5, equal to the average metals & mining industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Haynes International has a market cap of $757.1 million and is part of the basic materials sector and metals & mining industry. Shares are up 52.1% year to date as of the close of trading on Friday.

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

Rating Change #9

Cousins Properties ( CUZ) 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, 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 weak operating cash flow.

Highlights from the ratings report include:
  • Net operating cash flow has significantly decreased to $9.18 million or 71.36% 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 gross profit margin for COUSINS PROPERTIES INC is currently extremely low, coming in at 7.20%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -9.00% is significantly below that of the industry average.
  • The revenue fell significantly faster than the industry average of 7.0%. Since the same quarter one year prior, revenues fell by 26.6%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • Compared to its closing price of one year ago, CUZ's share price has jumped by 41.21%, exceeding the performance of the broader market during that same time frame. 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.
  • The debt-to-equity ratio is somewhat low, currently at 0.66, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels.

Cousins Properties Incorporated, a real estate investment trust (REIT), owns, develops, and manages real estate portfolio, as well as performs certain real estate-related services in the United States. Cousins has a market cap of $902.6 million and is part of the financial sector and real estate industry. Shares are up 6% year to date as of the close of trading on Wednesday.

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

Rating Change #8

Penn National Gaming ( PENN) 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, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and good cash flow from operations. 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:
  • Net operating cash flow has slightly increased to $102.29 million or 9.12% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -4.15%.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Hotels, Restaurants & Leisure industry average. The net income increased by 42.5% when compared to the same quarter one year prior, rising from $36.16 million to $51.53 million.
  • PENN NATIONAL GAMING INC has improved earnings per share by 41.2% 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, PENN NATIONAL GAMING INC continued to lose money by earning -$1.08 versus -$3.69 in the prior year. This year, the market expects an improvement in earnings ($1.71 versus -$1.08).
  • Powered by its strong earnings growth of 41.17% and other important driving factors, this stock has surged by 83.55% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, PENN should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • The revenue growth came in higher than the industry average of 0.7%. Since the same quarter one year prior, revenues rose by 12.6%. Growth in the company's revenue appears to have helped boost the earnings per share.

Penn National Gaming, Inc. and its subsidiaries own and manage gaming and pari-mutuel properties in the United States. Penn National Gaming has a market cap of $3.2 billion and is part of the services sector and leisure industry. Shares are up 18.1% year to date as of the close of trading on Wednesday.

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

Rating Change #7

Garmin ( GRMN) 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, increase in net income, good cash flow from operations and expanding profit margins. 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:
  • 49.70% is the gross profit margin for GARMIN LTD which we consider to be strong. Regardless of GRMN's high profit margin, it has managed to decrease from the same period last year.
  • Net operating cash flow has slightly increased to $207.60 million or 3.73% when compared to the same quarter last year. In addition, GARMIN LTD has also vastly surpassed the industry average cash flow growth rate of -53.39%.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Household Durables industry. The net income increased by 155.8% when compared to the same quarter one year prior, rising from $37.33 million to $95.48 million.
  • GRMN 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 3.59, which clearly demonstrates the ability to cover short-term cash needs.
  • The revenue growth greatly exceeded the industry average of 14.0%. Since the same quarter one year prior, revenues rose by 17.8%. Growth in the company's revenue appears to have helped boost the earnings per share.

Garmin Ltd. operates as a holding company and through its subsidiaries, designs, develops, manufactures, and markets global positioning system (GPS) enabled products and other navigation, communication, and information products worldwide. The company has a P/E ratio of 10.3, equal to the average electronics industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Garmin has a market cap of $7 billion and is part of the technology sector and electronics industry. Shares are up 7.3% year to date as of the close of trading on Wednesday.

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

Rating Change #6

Loews Corporation ( L) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, good cash flow from operations, increase in stock price during the past year 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.

Highlights from the ratings report include:
  • L, with its decline in revenue, slightly underperformed the industry average of 8.6%. Since the same quarter one year prior, revenues slightly dropped by 1.2%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • LOEWS CORP's earnings per share declined by 7.1% 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, LOEWS CORP increased its bottom line by earning $3.11 versus $1.31 in the prior year. This year, the market expects an improvement in earnings ($3.21 versus $3.11).
  • 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. 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.
  • Net operating cash flow has significantly increased by 284.01% to $1,129.00 million when compared to the same quarter last year. In addition, LOEWS CORP has also vastly surpassed the industry average cash flow growth rate of 5.69%.

Loews Corporation, through its subsidiaries, operates primarily as a commercial property and casualty insurance company in the United States. The company has a P/E ratio of 13.9, below the average insurance industry P/E ratio of 14.1 and below the S&P 500 P/E ratio of 17.7. Loews has a market cap of $17.2 billion and is part of the financial sector and insurance industry. Shares are up 9.5% year to date as of the close of trading on Friday.

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

Rating Change #5

Rush ( RUSHB) 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, 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 generally poor debt management, poor profit margins and weak operating cash flow.

Highlights from the ratings report include:
  • The debt-to-equity ratio of 1.20 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with this, the company manages to maintain a quick ratio of 0.34, which clearly demonstrates the inability to cover short-term cash needs.
  • Net operating cash flow has decreased to -$17.33 million or 48.36% 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.
  • Powered by its strong earnings growth of 216.66% and other important driving factors, this stock has surged by 50.27% over the past year, outperforming the rise in the S&P 500 Index during the same period. 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.
  • RUSH ENTERPRISES 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 year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, RUSH ENTERPRISES INC increased its bottom line by earning $0.65 versus $0.14 in the prior year. This year, the market expects an improvement in earnings ($1.27 versus $0.65).
  • The revenue growth greatly exceeded the industry average of 10.8%. Since the same quarter one year prior, revenues rose by 49.0%. Growth in the company's revenue appears to have helped boost the earnings per share.

Rush Enterprises, Inc. owns and operates a network of commercial vehicle dealerships in North America. It operates a regional network of Rush Truck Centers that primarily sell commercial vehicles to owner operators, regional and national truck fleets, corporations, and local governments. The company has a P/E ratio of 20.3, above the S&P 500 P/E ratio of 17.7. Rush has a market cap of $169.9 million and is part of the services sector and specialty retail industry. Shares are down 10.7% year to date as of the close of trading on Friday.

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

Rating Change #4

KB Home ( KBH) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, poor profit margins, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Highlights from the ratings report include:
  • The change in net income from the same quarter one year ago has significantly exceeded that of the Household Durables industry average, but is less than that of the S&P 500. The net income has significantly decreased by 123.1% when compared to the same quarter one year ago, falling from -$30.71 million to -$68.50 million.
  • KB HOME 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. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, KB HOME continued to lose money by earning -$0.90 versus -$1.34 in the prior year. For the next year, the market is expecting a contraction of 177.2% in earnings (-$2.50 versus -$0.90).
  • The share price of KB HOME has not done very well: it is down 6.14% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • The gross profit margin for KB HOME is currently extremely low, coming in at 7.90%. It has decreased significantly from the same period last year.
  • 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 Household Durables industry and the overall market, KB HOME's return on equity significantly trails that of both the industry average and the S&P 500.

KB Home operates as a homebuilding and financial services company in the United States. It constructs and sells various types of homes, including attached and detached single-family homes, townhomes, and condominiums primarily for first-time, move-up, and active adult homebuyers. KB Home has a market cap of $782.8 million and is part of the industrial goods sector and materials & construction industry. Shares are down 26.3% year to date as of the close of trading on Wednesday.

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

Rating Change #3

RightNow Technologies ( RNOW) 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, notable return on equity and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and generally poor debt management.

Highlights from the ratings report include:
  • Net operating cash flow has declined marginally to $3.50 million or 0.37% 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.
  • Currently the debt-to-equity ratio of 1.92 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Regardless of the company's weak debt-to-equity ratio, RNOW has managed to keep a strong quick ratio of 2.39, which demonstrates the ability to cover short-term cash needs.
  • Powered by its strong earnings growth of 100.00% and other important driving factors, this stock has surged by 112.34% over the past year, outperforming the rise in the S&P 500 Index during the same period. 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 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 Internet Software & Services industry and the overall market, RIGHTNOW TECHNOLOGIES INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • RNOW's revenue growth has slightly outpaced the industry average of 20.2%. Since the same quarter one year prior, revenues rose by 24.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.

Rightnow Technologies, Inc. provides cloud-based customer experience software products and services. The company primarily offers RightNow CX, a customer experience suite for consumer-centric organizations to enable interactions across Web, social, and contact center touch points. The company has a P/E ratio of 37.3, equal to the average computer software & services industry P/E ratio and above the S&P 500 P/E ratio of 17.7. RightNow has a market cap of $1 billion and is part of the technology sector and computer software & services industry. Shares are up 32.2% year to date as of the close of trading on Wednesday.

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

Rating Change #2

Basic Sanitation Company of the State of Sa ( SBS) 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, robust 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 unimpressive growth in net income, weak operating cash flow and feeble growth in the company's earnings per share.

Highlights from the ratings report include:
  • Net operating cash flow has declined marginally to $315.15 million or 3.85% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, CIA SANEAMENTO BASICO ESTADO has marginally lower results.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Water Utilities industry. The net income has significantly decreased by 33.1% when compared to the same quarter one year ago, falling from $167.81 million to $112.23 million.
  • 38.60% is the gross profit margin for CIA SANEAMENTO BASICO ESTADO which we consider to be strong. Regardless of SBS'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 8.00% trails the industry average.
  • The debt-to-equity ratio is somewhat low, currently at 0.86, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.10, which illustrates the ability to avoid short-term cash problems.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 24.6%. Since the same quarter one year prior, revenues rose by 16.1%. 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.

Companhia de Saneamento Basico do Estado de Sao Paulo provides basic and environmental sanitation services and sewage treatment services, as well as supplies treated water in the state of Sao Paulo. The company has a P/E ratio of 13.3, above the average utilities industry P/E ratio of 7.6 and below the S&P 500 P/E ratio of 17.7. Basic Sanitation Company of the State of Sa has a market cap of $7 billion and is part of the utilities sector and utilities industry. Shares are up 17.4% year to date as of the close of trading on Wednesday.

You can view the full Basic Sanitation Company of the State of Sa Ratings Report or get investment ideas from our investment research center.

Rating Change #1

Denbury Resources ( DNR) 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, expanding profit margins and good cash flow from operations. However, as a counter to these strengths, we find that the growth in the company's net income has been quite unimpressive.

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 114.6% when compared to the same quarter one year ago, falling from $96.89 million to -$14.19 million.
  • 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. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, DENBURY RESOURCES INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • Net operating cash flow has increased to $124.83 million or 10.30% when compared to the same quarter last year. Despite an increase in cash flow, DENBURY RESOURCES INC's cash flow growth rate is still lower than the industry average growth rate of 25.34%.
  • The gross profit margin for DENBURY RESOURCES INC is rather high; currently it is at 59.70%. 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 -2.80% is in-line with the industry average.
  • DNR's very impressive revenue growth exceeded the industry average of 23.7%. Since the same quarter one year prior, revenues leaped by 52.4%. 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.

Denbury Resources Inc. engages in the acquisition, exploitation, drilling, and extraction of oil and natural gas properties in the Gulf Coast region located in Mississippi, Texas, Louisiana, and Alabama. The company has a P/E ratio of 56.2, above the average energy industry P/E ratio of 53.2 and above the S&P 500 P/E ratio of 17.7. Denbury has a market cap of $8.1 billion and is part of the basic materials sector and energy industry. Shares are up 4.1% year to date as of the close of trading on Thursday.

You can view the full Denbury 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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