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 54 U.S. common stocks for week ending September 30, 2011. 11 stocks were upgraded and 43 stocks were downgraded by our stock model.

Rating Change #10

Applied Materials ( AMAT) 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 impressive record of earnings per share 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:
  • AMAT's revenue growth has slightly outpaced the industry average of 8.9%. Since the same quarter one year prior, revenues rose by 10.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Although AMAT's debt-to-equity ratio of 0.23 is very low, it is currently higher than that of the industry average. To add to this, AMAT has a quick ratio of 2.31, which demonstrates the ability of the company to cover short-term liquidity needs.
  • 44.60% is the gross profit margin for APPLIED MATERIALS 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 17.10% trails 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. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market on the basis of return on equity, APPLIED MATERIALS INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • AMAT has underperformed the S&P 500 Index, declining 9.08% from its price level of one year ago. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.

Applied Materials, Inc. provides manufacturing equipment, services, and software to the semiconductor, flat panel display, solar photovoltaic (PV), and related industries worldwide. The company has a P/E ratio of 7.3, equal to the average electronics industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Applied has a market cap of $14 billion and is part of the technology sector and electronics industry. Shares are down 24.4% year to date as of the close of trading on Friday.

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

Rating Change #9

Avon Products Inc ( AVP) 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, compelling growth in net income and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including generally poor debt management, weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • AVP's revenue growth has slightly outpaced the industry average of 6.0%. Since the same quarter one year prior, revenues slightly increased by 8.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Personal Products industry average. The net income increased by 23.0% when compared to the same quarter one year prior, going from $167.60 million to $206.20 million.
  • AVON PRODUCTS has improved earnings per share by 23.7% 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, AVON PRODUCTS reported lower earnings of $1.35 versus $1.44 in the prior year. This year, the market expects an improvement in earnings ($2.05 versus $1.35).
  • Currently the debt-to-equity ratio of 1.59 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. To add to this, AVP has a quick ratio of 0.64, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
  • Net operating cash flow has decreased to $119.80 million or 46.51% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

Avon Products Inc. engages in manufacturing and marketing beauty and related products in worldwide. The company has a P/E ratio of 11.5, equal to the average consumer non-durables industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Avon has a market cap of $8.4 billion and is part of the consumer goods sector and consumer non-durables industry. Shares are down 31.8% year to date as of the close of trading on Friday.

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

Rating Change #8

BP ( BP) 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, compelling growth in net income and attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including poor profit margins and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • BP's revenue growth has slightly outpaced the industry average of 37.4%. Since the same quarter one year prior, revenues rose by 37.5%. 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 Oil, Gas & Consumable Fuels industry. The net income increased by 132.8% when compared to the same quarter one year prior, rising from -$17,150.00 million to $5,620.00 million.
  • 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 Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, BP PLC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • BP has underperformed the S&P 500 Index, declining 7.48% 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.
  • The gross profit margin for BP PLC is currently extremely low, coming in at 13.80%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 5.50% trails that of the industry average.

BP p.l.c. provides fuel for transportation, energy for heat and light, retail services, and petrochemicals products. BP has a market cap of $115 billion and is part of the basic materials sector and energy industry. Shares are down 16.2% year to date as of the close of trading on Friday.

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

Rating Change #7

City Holding Company ( CHCO) has been downgraded by TheStreet Ratings from buy to hold. Among the primary strengths of the company is its expanding profit margins over time. At the same time, however, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and premium valuation.

Highlights from the ratings report include:
  • The gross profit margin for CITY HOLDING CO is currently very high, coming in at 84.20%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 21.90% is above that of the industry average.
  • CHCO, with its decline in revenue, underperformed when compared the industry average of 19.8%. Since the same quarter one year prior, revenues slightly dropped by 0.4%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • CITY HOLDING CO's earnings per share declined by 5.9% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, CITY HOLDING CO reported lower earnings of $2.48 versus $2.69 in the prior year. This year, the market expects an improvement in earnings ($2.56 versus $2.48).
  • Net operating cash flow has decreased to $9.06 million or 27.44% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, CHCO has underperformed the S&P 500 Index, declining 9.76% from its price level of one year ago. 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.

City Holding Company operates as the bank holding company for City National Bank of West Virginia that offers community banking services to consumers and local businesses. The company's deposit products comprise time, interest-bearing demand, savings, and non-interest bearing demand deposits. The company has a P/E ratio of 10.9, equal to the average banking industry P/E ratio and below the S&P 500 P/E ratio of 17.7. City Holding has a market cap of $407.3 million and is part of the financial sector and banking industry. Shares are down 25.5% year to date as of the close of trading on Tuesday.

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

Rating Change #6

Coherent ( COHR) 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, impressive record of earnings per share growth, compelling growth in net income 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:
  • COHR's revenue growth has slightly outpaced the industry average of 20.7%. Since the same quarter one year prior, revenues rose by 26.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • COHR'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, COHR has a quick ratio of 2.34, which demonstrates the ability of the company to cover short-term liquidity needs.
  • COHERENT INC has improved earnings per share by 29.8% 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, COHERENT INC turned its bottom line around by earning $1.47 versus -$1.46 in the prior year. This year, the market expects an improvement in earnings ($3.37 versus $1.47).
  • 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 Electronic Equipment, Instruments & Components industry average. The net income increased by 32.1% when compared to the same quarter one year prior, rising from $14.40 million to $19.02 million.
  • 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. 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. We feel, however, that the other strengths this company displays justify these higher price levels.

Coherent, Inc. provides photonics-based solutions for commercial and scientific research applications worldwide. It engages in the design, manufacture, servicing, and marketing of lasers, laser tools, precision optics, and related accessories. The company has a P/E ratio of 15.8, equal to the average electronics industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Coherent has a market cap of $1.1 billion and is part of the technology sector and electronics industry. Shares are down 1.9% year to date as of the close of trading on Wednesday.

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

Rating Change #5

Dow Chemical ( DOW) 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 poor profit margins, weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • DOW CHEMICAL 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, DOW CHEMICAL increased its bottom line by earning $1.73 versus $0.16 in the prior year. This year, the market expects an improvement in earnings ($2.85 versus $1.73).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Chemicals industry. The net income increased by 63.9% when compared to the same quarter one year prior, rising from $651.00 million to $1,067.00 million.
  • DOW's debt-to-equity ratio of 0.83 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.04 is sturdy.
  • The gross profit margin for DOW CHEMICAL is rather low; currently it is at 19.00%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 6.60% trails that of the industry average.
  • Net operating cash flow has decreased to $798.00 million or 40.58% 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 Dow Chemical Company manufactures and supplies products used as raw materials in the production of customer products and services worldwide. The company has a P/E ratio of 10.9, equal to the average chemicals industry P/E ratio and below the S&P 500 P/E ratio of 17.7. The Dow Chemical has a market cap of $28.1 billion and is part of the basic materials sector and chemicals industry. Shares are down 30.4% year to date as of the close of trading on Friday.

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

Rating Change #4

Kelly Services ( KELYA) 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 also find weaknesses including weak operating cash flow and poor profit margins.

Highlights from the ratings report include:
  • KELLY SERVICES 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, KELLY SERVICES INC turned its bottom line around by earning $0.70 versus -$3.01 in the prior year. This year, the market expects an improvement in earnings ($1.45 versus $0.70).
  • 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 382.1% when compared to the same quarter one year prior, rising from $3.90 million to $18.80 million.
  • 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 Professional Services industry and the overall market on the basis of return on equity, KELLY SERVICES INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • The gross profit margin for KELLY SERVICES INC is rather low; currently it is at 16.60%. Regardless of KELYA'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 1.30% trails the industry average.
  • Net operating cash flow has decreased to -$1.80 million or 28.57% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

Kelly Services, Inc., together with its subsidiaries, provides workforce solutions to various industries worldwide. The company has a P/E ratio of 9.2, below the average diversified services industry P/E ratio of 9.5 and below the S&P 500 P/E ratio of 17.7. Kelly Services has a market cap of $374.7 million and is part of the services sector and diversified services industry. Shares are down 40.3% year to date as of the close of trading on Friday.

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

Rating Change #3

Parkvale Financial Corporation ( PVSA) 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, increase in net income and expanding profit margins. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.

Highlights from the ratings report include:
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Thrifts & Mortgage Finance industry and the overall market, PARKVALE FINANCIAL CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • PARKVALE FINANCIAL CORP reported significant earnings per share improvement in the most recent quarter compared to 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, PARKVALE FINANCIAL CORP reported poor results of -$3.30 versus -$1.90 in the prior year.
  • Net operating cash flow has significantly increased by 191.24% to $5.72 million when compared to the same quarter last year. Despite an increase in cash flow of 191.24%, PARKVALE FINANCIAL CORP is still growing at a significantly lower rate than the industry average of 341.04%.
  • 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 Thrifts & Mortgage Finance industry average. The net income increased by 37.3% when compared to the same quarter one year prior, rising from $1.42 million to $1.95 million.
  • Powered by its strong earnings growth of 55.55% and other important driving factors, this stock has surged by 158.94% 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.

Parkvale Financial Corporation operates as a holding company for Parkvale Savings Bank that provides various consumer and commercial banking services to individuals, partnerships, and corporations in the Pittsburgh metropolitan area. Parkvale Financial has a market cap of $121.1 million and is part of the financial sector and banking industry. Shares are up 136.4% year to date as of the close of trading on Tuesday.

You can view the full Parkvale Financial 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 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, notable return on equity, attractive valuation levels 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:
  • SBS's very impressive revenue growth is slightly higher than the industry average of 52.2%. Since the same quarter one year prior, revenues leaped by 59.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The debt-to-equity ratio is somewhat low, currently at 0.79, 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 1.16, which illustrates the ability to avoid short-term cash problems.
  • 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 Water Utilities industry and the overall market, CIA SANEAMENTO BASICO ESTADO's return on equity exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly increased by 525.88% to $528.00 million when compared to the same quarter last year. In addition, CIA SANEAMENTO BASICO ESTADO has also vastly surpassed the industry average cash flow growth rate of 307.07%.

Companhia de Saneamento B sico do Estado de Sao Paulo - SABESP provides water and sewage services to residential, commercial, industrial, and governmental customers in the State of Sao Paulo. The company has a P/E ratio of 10.4, above the average utilities industry P/E ratio of 5.9 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 $5.4 billion and is part of the utilities sector and utilities industry. Shares are down 9.6% year to date as of the close of trading on Tuesday.

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

WSI Industries ( WSCI) 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, compelling growth in net income 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:
  • WSCI's revenue growth has slightly outpaced the industry average of 36.3%. Since the same quarter one year prior, revenues rose by 40.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The current debt-to-equity ratio, 0.47, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, WSCI has a quick ratio of 1.75, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Powered by its strong earnings growth of 133.33% and other important driving factors, this stock has surged by 43.82% 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, WSCI should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Machinery industry. The net income increased by 151.3% when compared to the same quarter one year prior, rising from $0.16 million to $0.40 million.
  • Net operating cash flow has significantly increased by 848.36% to $1.15 million when compared to the same quarter last year. In addition, WSI INDUSTRIES INC has also vastly surpassed the industry average cash flow growth rate of 87.54%.

WSI Industries, Inc. engages in precision contract metal machining business in the United States. The company offers metal components in medium to high volumes requiring tolerances in accordance with customer specifications. The company has a P/E ratio of 18.4, above the average industrial industry P/E ratio of 17.9 and above the S&P 500 P/E ratio of 17.7. WSI has a market cap of $17 million and is part of the industrial goods sector and industrial industry. Shares are down 4.4% year to date as of the close of trading on Tuesday.

You can view the full WSI 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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