TheStreet Ratings Top 10 Rating Changes

BOSTON ( 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 53 U.S. common stocks for week ending September 23, 2011. 16 stocks were upgraded and 37 stocks were downgraded by our stock model.

Rating Change #10

Rightnow Technologies ( RNOW) 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, notable return on equity, expanding profit margins, 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:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 26.2%. Since the same quarter one year prior, revenues rose by 26.1%. 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.
  • 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. When compared to other companies in the Internet Software & Services industry and the overall market, RIGHTNOW TECHNOLOGIES INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • The gross profit margin for RIGHTNOW TECHNOLOGIES INC is currently very high, coming in at 74.80%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, RNOW's net profit margin of 0.40% significantly trails the industry average.
  • Net operating cash flow has significantly increased by 59.95% to $6.42 million when compared to the same quarter last year. Despite an increase in cash flow, RIGHTNOW TECHNOLOGIES INC's average is still marginally south of the industry average growth rate of 60.18%.
  • Compared to its closing price of one year ago, RNOW's share price has jumped by 80.42%, 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.

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 42.2, above the average computer software & services industry P/E ratio of 41.7 and above the S&P 500 P/E ratio of 17.7. RightNow has a market cap of $1.1 billion and is part of the technology sector and computer software & services industry. Shares are up 42.2% 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 #9

Celestica ( CLS) 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, impressive record of earnings per share growth, compelling growth in net income, good cash flow from operations 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:
  • CLS's revenue growth has slightly outpaced the industry average of 15.1%. Since the same quarter one year prior, revenues rose by 15.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • CELESTICA 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. During the past fiscal year, CELESTICA INC increased its bottom line by earning $0.34 versus $0.23 in the prior year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Electronic Equipment, Instruments & Components industry. The net income increased by 849.2% when compared to the same quarter one year prior, rising from -$6.10 million to $45.70 million.
  • Net operating cash flow has significantly increased by 223.25% to $5.30 million when compared to the same quarter last year. In addition, CELESTICA INC has also vastly surpassed the industry average cash flow growth rate of -49.44%.
  • CLS's debt-to-equity ratio is very low at 0.03 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.95 is somewhat weak and could be cause for future problems.

Celestica Inc. provides electronics manufacturing services and solutions to original equipment manufacturers (OEMs) in the consumer, communications, enterprise computing, industrial, aerospace and defense, healthcare, and green technology sectors in Asia, the Americas, and Europe. The company has a P/E ratio of 16.2, above the average electronics industry P/E ratio of 13.5 and below the S&P 500 P/E ratio of 17.7. Celestica has a market cap of $1.8 billion and is part of the technology sector and electronics industry. Shares are down 15.1% year to date as of the close of trading on Wednesday.

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

Rating Change #8

HSN Inc ( HSNI) 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, growth in earnings per share, increase in net income, revenue growth and reasonable valuation levels. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • 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. Although other factors naturally played a role, the company's strong earnings growth was key. 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.
  • HSN INC has improved earnings per share by 26.2% 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, HSN INC increased its bottom line by earning $1.66 versus $1.26 in the prior year. This year, the market expects an improvement in earnings ($1.99 versus $1.66).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Internet & Catalog Retail industry average. The net income increased by 29.4% when compared to the same quarter one year prior, rising from $24.71 million to $31.97 million.
  • HSNI's revenue growth trails the industry average of 32.8%. Since the same quarter one year prior, revenues slightly increased by 8.3%. Growth in the company's revenue appears to have helped boost the earnings per share.

HSN, Inc. markets and sells a range of third party and private label merchandise primarily in the United States. The company has a P/E ratio of 19.3, above the average specialty retail industry P/E ratio of 19.1 and above the S&P 500 P/E ratio of 17.7. HSN has a market cap of $2 billion and is part of the services sector and specialty retail industry. Shares are up 13.5% year to date as of the close of trading on Monday.

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

Rating Change #7

Brigham Exploration Company ( BEXP) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, compelling growth in net income, expanding profit margins and good cash flow from operations. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:
  • BEXP's very impressive revenue growth greatly exceeded the industry average of 38.6%. Since the same quarter one year prior, revenues leaped by 185.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • BRIGHAM EXPLORATION CO reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, BRIGHAM EXPLORATION CO turned its bottom line around by earning $0.38 versus -$2.68 in the prior year. This year, the market expects an improvement in earnings ($1.39 versus $0.38).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 283.4% when compared to the same quarter one year prior, rising from $18.47 million to $70.84 million.
  • The gross profit margin for BRIGHAM EXPLORATION CO is currently very high, coming in at 85.40%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 55.30% significantly outperformed against the industry average.
  • Net operating cash flow has significantly increased by 130.12% to $94.23 million when compared to the same quarter last year. In addition, BRIGHAM EXPLORATION CO has also vastly surpassed the industry average cash flow growth rate of 38.26%.

Brigham Exploration Company engages in the exploration, development, and production of onshore oil and natural gas reserves in the Rocky Mountains, the Gulf Coast, the Anadarko Basin, and west Texas. The company has a P/E ratio of 42.5, equal to the average energy industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Brigham has a market cap of $3.6 billion and is part of the basic materials sector and energy industry. Shares are up 12.2% year to date as of the close of trading on Tuesday.

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

Rating Change #6

Constellation Energy Group ( CEG) 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, increase in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • 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 Independent Power Producers & Energy Traders industry average. The net income increased by 29.0% when compared to the same quarter one year prior, rising from $83.80 million to $108.10 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 6.8%. Since the same quarter one year prior, revenues slightly increased by 1.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The current debt-to-equity ratio, 0.55, 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.
  • 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. Although other factors naturally played a role, the company's strong earnings growth was key. 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.
  • CONSTELLATION ENERGY GRP INC has improved earnings per share by 36.1% 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, CONSTELLATION ENERGY GRP INC swung to a loss, reporting -$4.89 versus $22.07 in the prior year. This year, the market expects an improvement in earnings ($3.18 versus -$4.89).

Constellation Energy Group, Inc. operates as an energy company in the United States and Canada. The company develops, owns, operates, and maintains fossil and renewable generating facilities. Constellation Energy Group has a market cap of $7.8 billion and is part of the utilities sector and utilities industry. Shares are up 23.6% year to date as of the close of trading on Friday.

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

Rating Change #5

Robert Half International ( RHI) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and robust revenue growth. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

Highlights from the ratings report include:
  • ROBERT HALF INTL 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, ROBERT HALF INTL INC increased its bottom line by earning $0.44 versus $0.24 in the prior year. This year, the market expects an improvement in earnings ($1.01 versus $0.44).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Professional Services industry. The net income increased by 199.0% when compared to the same quarter one year prior, rising from $12.18 million to $36.43 million.
  • 41.10% is the gross profit margin for ROBERT HALF INTL INC which we consider to be strong. 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 3.90% trails 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 Professional Services industry and the overall market on the basis of return on equity, ROBERT HALF INTL INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • RHI has underperformed the S&P 500 Index, declining 18.89% 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.

Robert Half International Inc. provides staffing and risk consulting services in North America, South America, Europe, Asia, and Australia. Its Accountemps division offers temporary staffing in the fields of accounting, tax, and finance. The company has a P/E ratio of 28.3, equal to the average diversified services industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Robert Half International has a market cap of $3 billion and is part of the services sector and diversified services industry. Shares are down 34.4% year to date as of the close of trading on Friday.

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

Rating Change #4

CGG Veritas ( CGV) 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 generally disappointing historical performance in the stock itself.

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 Energy Equipment & Services industry. The net income has significantly decreased by 1552.1% when compared to the same quarter one year ago, falling from $2.90 million to -$42.11 million.
  • The gross profit margin for CGG VERITAS is currently lower than what is desirable, coming in at 34.40%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -5.50% is significantly below that of the industry average.
  • The share price of CGG VERITAS has not done very well: it is down 14.18% 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.
  • 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 Energy Equipment & Services industry and the overall market, CGG VERITAS's return on equity significantly trails that of both the industry average and the S&P 500.
  • Despite currently having a low debt-to-equity ratio of 0.53, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.22 is sturdy.

Compagnie Generale de Geophysique-Veritas S.A., together with its subsidiaries, provides geophysical services and equipment to the oil and gas exploration and production industries in France and internationally. The company has a P/E ratio of 183.5, above the S&P 500 P/E ratio of 17.7. CGG Veritas has a market cap of $2.8 billion and is part of the basic materials sector and energy industry. Shares are down 41.2% year to date as of the close of trading on Monday.

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

Rating Change #3

Keycorp ( KEY) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and attractive 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:
  • KEYCORP 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, KEYCORP turned its bottom line around by earning $0.47 versus -$2.51 in the prior year. This year, the market expects an improvement in earnings ($0.86 versus $0.47).
  • 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 242.8% when compared to the same quarter one year prior, rising from $70.00 million to $240.00 million.
  • Net operating cash flow has increased to $1,042.00 million or 46.76% when compared to the same quarter last year. Despite an increase in cash flow, KEYCORP's average is still marginally south of the industry average growth rate of 46.96%.
  • The revenue fell significantly faster than the industry average of 20.1%. Since the same quarter one year prior, revenues fell by 12.8%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • KEY has underperformed the S&P 500 Index, declining 23.21% 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.

KeyCorp operates as a holding company for KeyBank National Association that provides various banking services in the United States. The company has a P/E ratio of 6.7, equal to the average banking industry P/E ratio and below the S&P 500 P/E ratio of 17.7. KeyCorp has a market cap of $6.2 billion and is part of the financial sector and banking industry. Shares are down 28.6% year to date as of the close of trading on Tuesday.

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

Rating Change #2

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

Highlights from the ratings report include:
  • PRINCIPAL FINANCIAL GRP 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. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, PRINCIPAL FINANCIAL GRP INC increased its bottom line by earning $2.07 versus $1.96 in the prior year. This year, the market expects an improvement in earnings ($2.96 versus $2.07).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Insurance industry average. The net income increased by 87.1% when compared to the same quarter one year prior, rising from $142.30 million to $266.30 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. Compared to other companies in the Insurance industry and the overall market on the basis of return on equity, PRINCIPAL FINANCIAL GRP INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • PFG has underperformed the S&P 500 Index, declining 6.20% 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.
  • Net operating cash flow has decreased to $590.00 million or 29.00% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

Principal Financial Group, Inc. provides retirement savings, investment, and insurance products and services worldwide. The company has a P/E ratio of 10, equal to the average financial services industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Principal Financial Group has a market cap of $7.7 billion and is part of the financial sector and financial services industry. Shares are down 24.7% year to date as of the close of trading on Wednesday.

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

Rating Change #1

ABB Ltd ( ABB) 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, increase in net income and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and poor profit margins.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 13.7%. Since the same quarter one year prior, revenues rose by 27.8%. 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 Electrical Equipment industry. The net income increased by 43.3% when compared to the same quarter one year prior, rising from $623.00 million to $893.00 million.
  • ABB's debt-to-equity ratio is very low at 0.23 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.89 is somewhat weak and could be cause for future problems.
  • The gross profit margin for ABB LTD is currently lower than what is desirable, coming in at 33.70%. Regardless of ABB's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 9.20% trails the industry average.
  • ABB has underperformed the S&P 500 Index, declining 16.15% 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.

ABB Ltd. provides power and automation technologies for utility and industrial customers worldwide. The company's Power Products division manufactures and sells high- and medium-voltage switchgear and apparatus, circuit breakers, power and distribution transformers, and sensors. The company has a P/E ratio of 16.3, above the average industrial industry P/E ratio of 13.7 and below the S&P 500 P/E ratio of 17.7. ABB has a market cap of $41.4 billion and is part of the industrial goods sector and industrial industry. Shares are down 19.6% year to date as of the close of trading on Thursday.

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

-- Reported by Chris Stuart, CFA in Boston, MA.

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.
Equity research manager Chris Stuart, CFA, joined TheStreet Ratings after working as a senior investment analyst with Merrill Lynch covering small-cap equity and alternative investment strategies. Prior to that, Stuart worked for One Beacon Insurance as an actuarial analyst and at H&R Block as a financial adviser.

Stuart earned his bachelor's degree in finance from the University of Massachusetts, Amherst. He holds a Chartered Financial Analyst (CFA) designation and is a member of the Boston Security Analysts Society (BSAS) and the CFA Institute.

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