TheStreet Ratings Top 10 Rating Changes

NEW YORK ( TheStreet Ratings) -- Every trading day TheStreet Ratings' stock model reviews the investment ratings on around 4,800 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 91 U.S. common stocks for week ending September 2, 2011. 12 stocks were upgraded and 79 stocks were downgraded by our stock model.

Rating Change #10

Urban Outfitters ( URBN) 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 expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 7.5%. Since the same quarter one year prior, revenues rose by 10.3%. 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.
  • Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.48 is sturdy.
  • 37.90% is the gross profit margin for URBAN OUTFITTERS INC which we consider to be strong. Regardless of URBN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, URBN's net profit margin of 9.30% compares favorably to 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 Specialty Retail industry. The net income has decreased by 20.9% when compared to the same quarter one year ago, dropping from $71.66 million to $56.69 million.
  • Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, URBN has underperformed the S&P 500 Index, declining 13.68% from its price level of one year ago. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.

Urban Outfitters, Inc. operates lifestyle specialty retail stores under the Urban Outfitters, Anthropologie, Free People, Terrain, Leifsdottir, and BHLDN brands. It also engages in wholesale business under the Free People and Leifsdottir brands. The company has a P/E ratio of 17.5, below the average retail industry P/E ratio of 17.7 and below the S&P 500 P/E ratio of 17.7. Urban Outfitters has a market cap of $4.1 billion and is part of the services sector and retail industry. Shares are down 26.9% year to date as of the close of trading on Thursday.

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

Rating Change #9

Ternium ( TX) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, robust revenue growth and attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including poor profit margins, weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • TERNIUM SA -ADR has improved earnings per share by 7.4% 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. This trend suggests that the performance of the business is improving. During the past fiscal year, TERNIUM SA -ADR increased its bottom line by earning $3.11 versus $1.44 in the prior year. This year, the market expects an improvement in earnings ($3.25 versus $3.11).
  • TX's revenue growth trails the industry average of 48.7%. Since the same quarter one year prior, revenues rose by 21.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Despite currently having a low debt-to-equity ratio of 0.33, 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 TX's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.61 is high and demonstrates strong liquidity.
  • The gross profit margin for TERNIUM SA -ADR is currently lower than what is desirable, coming in at 28.30%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 8.40% significantly trails the industry average.
  • Net operating cash flow has significantly decreased to -$179.33 million or 181.83% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

Ternium S.A. engages in manufacturing and processing a range of flat and long steel products for construction, home appliances, capital goods, container, food, energy, and automotive industries. The company has a P/E ratio of 8.5, above the average metals & mining industry P/E ratio of 7.8 and below the S&P 500 P/E ratio of 17.7. Ternium has a market cap of $5 billion and is part of the basic materials sector and metals & mining industry. Shares are down 40.2% year to date as of the close of trading on Thursday.

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

Rating Change #8

LG.Display Company ( LPL) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, poor profit margins and feeble growth in its earnings per share.

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 Electronic Equipment, Instruments & Components industry. The net income has significantly decreased by 123.9% when compared to the same quarter one year ago, falling from $954.48 million to -$228.40 million.
  • The gross profit margin for LG DISPLAY CO LTD is rather low; currently it is at 18.40%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -3.90% trails that of the industry average.
  • LG DISPLAY CO 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. 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, LG DISPLAY CO LTD increased its bottom line by earning $1.39 versus $1.32 in the prior year. For the next year, the market is expecting a contraction of 104.7% in earnings (-$0.07 versus $1.39).
  • LPL, with its very weak revenue results, has greatly underperformed against the industry average of 15.6%. Since the same quarter one year prior, revenues plummeted by 65.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The current debt-to-equity ratio, 0.42, 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 0.74 is somewhat weak and could be cause for future problems.

LG Display Co., Ltd. engages in the manufacture and supply of thin film transistor liquid crystal displays (TFT-LCD) to original equipment manufacturers and multinational corporations primarily in Asia, the United States, and Europe. The company has a P/E ratio of seven, below the average electronics industry P/E ratio of 24.1 and below the S&P 500 P/E ratio of 17.7. LG.Display has a market cap of $7 billion and is part of the technology sector and electronics industry. Shares are down 44.1% year to date as of the close of trading on Thursday.

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

Rating Change #7

Fifth Third Bancorp ( FITB) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, expanding profit margins and good cash flow from operations. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

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 Commercial Banks industry. The net income increased by 75.5% when compared to the same quarter one year prior, rising from $192.00 million to $337.00 million.
  • The gross profit margin for FIFTH THIRD BANCORP is currently very high, coming in at 82.70%. It has increased significantly from the same period last year. Along with this, the net profit margin of 19.80% is above that of the industry average.
  • 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 Commercial Banks industry and the overall market on the basis of return on equity, FIFTH THIRD BANCORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • In its most recent trading session, FITB 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, 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.

Fifth Third Bancorp operates as a diversified financial services holding company in the United States. The company's Commercial Banking segment offers banking, cash management, and financial services to large and middle-market businesses, and government and professional customers. The company has a P/E ratio of 10.3, below the average banking industry P/E ratio of 10.4 and below the S&P 500 P/E ratio of 17.7. Fifth Third has a market cap of $9.6 billion and is part of the financial sector and banking industry. Shares are down 27.7% year to date as of the close of trading on Thursday.

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

Rating Change #6

Tenaris ( TS) 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 find that the stock has had a generally disappointing performance in the past year.

Highlights from the ratings report include:
  • TS's revenue growth trails the industry average of 48.3%. Since the same quarter one year prior, revenues rose by 21.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • TS's debt-to-equity ratio is very low at 0.12 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 1.17, which illustrates the ability to avoid short-term cash problems.
  • 40.00% is the gross profit margin for TENARIS SA which we consider to be strong. Regardless of TS'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 12.00% trails the industry average.
  • 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 Energy Equipment & Services industry and the overall market, TENARIS SA's return on equity is below that of both the industry average and the S&P 500.
  • TS has underperformed the S&P 500 Index, declining 6.56% from its price level of one year ago. 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.

Tenaris S.A., through its subsidiaries, engages in the manufacture and sale of steel pipe products. The company has a P/E ratio of 16.7, above the average metals & mining industry P/E ratio of 15.2 and below the S&P 500 P/E ratio of 17.7. Tenaris has a market cap of $18.7 billion and is part of the basic materials sector and metals & mining industry. Shares are down 34.4% year to date as of the close of trading on Tuesday.

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

Rating Change #5

1-800 Flowers.com ( FLWS) 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, compelling growth in net income and revenue growth. However, as a counter to these strengths, we find that the company has not been very careful in the management of its balance sheet.

Highlights from the ratings report include:
  • Powered by its strong earnings growth of 100.00% and other important driving factors, this stock has surged by 66.25% 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.
  • 1-800-FLOWERS.COM 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, 1-800-FLOWERS.COM turned its bottom line around by earning $0.09 versus -$0.03 in the prior year. This year, the market expects an improvement in earnings ($0.15 versus $0.09).
  • Net operating cash flow has increased to $18.96 million or 39.87% when compared to the same quarter last year. Despite an increase in cash flow, 1-800-FLOWERS.COM's average is still marginally south of the industry average growth rate of 47.66%.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. In comparison to the other companies in the Internet & Catalog Retail industry and the overall market, 1-800-FLOWERS.COM's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • Despite currently having a low debt-to-equity ratio of 0.32, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 0.44 is very low and demonstrates very weak liquidity.

1-800-FLOWERS.COM, Inc., together with its subsidiaries, operates as a gift retailer in the United States. The company provides a range of products, including fresh-cut flowers, floral arrangements and plants, gifts, popcorn, gourmet foods, cookies, chocolates, and wines. The company has a P/E ratio of 68.5, below the average specialty retail industry P/E ratio of 137 and above the S&P 500 P/E ratio of 17.7. 1-800 Flowers.com has a market cap of $74.4 million and is part of the services sector and specialty retail industry. Shares are down 1.1% year to date as of the close of trading on Wednesday.

You can view the full 1-800 Flowers.com Ratings Report or get investment ideas from our investment research center.

Rating Change #4

Spark Networks ( LOV) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, revenue growth, expanding profit margins 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:
  • Despite the fact that LOV's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.69 is high and demonstrates strong liquidity.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 25.7%. Since the same quarter one year prior, revenues rose by 16.6%. 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.
  • SPARK NETWORKS 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 not demonstrated a clear trend in earnings over the past two years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, SPARK NETWORKS INC turned its bottom line around by earning $0.18 versus -$0.31 in the prior year.
  • 38.80% is the gross profit margin for SPARK NETWORKS INC which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, LOV's net profit margin of -0.70% significantly underperformed when compared to the industry average.
  • 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. In comparison to the other companies in the Internet Software & Services industry and the overall market, SPARK NETWORKS INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.

Spark Networks, Inc. provides online personals services in the United States and internationally. Its Web sites enable adults to meet online, participate in a community, and form relationships. The company has a P/E ratio of 41.1, equal to the average diversified services industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Spark has a market cap of $67.8 million and is part of the services sector and diversified services industry. Shares are up 6.1% year to date as of the close of trading on Wednesday.

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

Rating Change #3

Ambient Corporation ( AMBT) 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, largely solid financial position with reasonable debt levels by most measures and notable return on equity. 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:
  • AMBT's very impressive revenue growth greatly exceeded the industry average of 8.9%. Since the same quarter one year prior, revenues leaped by 249.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • AMBT'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, AMBT has a quick ratio of 2.35, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Compared to its price level of one year ago, AMBT is down 1.12% to its most recent closing price of 7.12. Looking ahead, our view is that this company's fundamentals will not have much impact either way, allowing the stock to generally move up or down based on the push and pull of the broad market.
  • AMBIENT CORP has shown no change in earnings for its most recently reported quarter when compared with the same quarter a year earlier. This company has not demonstrated a clear trend in earnings over the past two years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, AMBIENT CORP turned its bottom line around by earning $0.00 versus -$2.00 in the prior year.
  • 43.40% is the gross profit margin for AMBIENT CORP which we consider to be strong. Regardless of AMBT'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 15.30% trails the industry average.

Ambient Corporation, a smart grid communications platforms integrator, develops high-speed Internet protocols-based data communications networks for the medium and low-voltage distribution grids in North America. Ambient has a market cap of $128 million and is part of the technology sector and telecommunications industry.

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

Rating Change #2

Arctic Cat ( ACAT) 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 compelling growth in net income. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • ACAT's revenue growth has slightly outpaced the industry average of 15.5%. Since the same quarter one year prior, revenues rose by 18.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • ACAT 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 1.32, which illustrates the ability to avoid short-term cash problems.
  • Powered by its strong earnings growth of 48.00% and other important driving factors, this stock has surged by 105.49% over the past year, outperforming the rise in the S&P 500 Index during the same period. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
  • ARCTIC CAT INC has improved earnings per share by 48.0% 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, ARCTIC CAT INC increased its bottom line by earning $0.70 versus $0.10 in the prior year. This year, the market expects an improvement in earnings ($1.00 versus $0.70).
  • The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Leisure Equipment & Products industry average. The net income increased by 48.1% when compared to the same quarter one year prior, rising from -$4.48 million to -$2.32 million.

Arctic Cat Inc. designs, engineers, manufactures, and markets snowmobiles and all-terrain vehicles (ATVs) under the Arctic Cat brand name in the United States and internationally. It also offers related parts, garments, and accessories. The company has a P/E ratio of 18.9, below the average automotive industry P/E ratio of 19.1 and above the S&P 500 P/E ratio of 17.7. Arctic Cat has a market cap of $189.4 million and is part of the consumer goods sector and automotive industry. Shares are up 7.4% year to date as of the close of trading on Friday.

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

Rating Change #1

FirstEnergy ( FE) 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 revenue growth came in higher than the industry average of 12.8%. Since the same quarter one year prior, revenues rose by 30.8%. 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.
  • Net operating cash flow has significantly increased by 53.40% to $540.00 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 35.58%.
  • FIRSTENERGY CORP 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. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, FIRSTENERGY CORP reported lower earnings of $2.58 versus $3.30 in the prior year. This year, the market expects an improvement in earnings ($3.34 versus $2.58).
  • 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. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • 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 Electric Utilities industry. The net income has significantly decreased by 31.7% when compared to the same quarter one year ago, falling from $265.00 million to $181.00 million.

Firstenergy Corp. operates as a diversified energy company. The company, through its subsidiaries and affiliates, involves in the generation, transmission, and distribution of electricity, as well as energy management and other energy-related services. The company has a P/E ratio of 23.5, below the average utilities industry P/E ratio of 23.9 and above the S&P 500 P/E ratio of 17.7. FirstEnergy has a market cap of $17.8 billion and is part of the utilities sector and utilities industry. Shares are up 17.7% year to date as of the close of trading on Tuesday.

You can view the full FirstEnergy 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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