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 66 U.S. common stocks for week ending October 21, 2011. 35 stocks were upgraded and 31 stocks were downgraded by our stock model.

Rating Change #10

Hess Corp ( HES) 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 and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • HESS CORP 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, HESS CORP increased its bottom line by earning $6.50 versus $2.28 in the prior year. This year, the market expects an improvement in earnings ($6.65 versus $6.50).
  • 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 Oil, Gas & Consumable Fuels industry average. The net income increased by 61.9% when compared to the same quarter one year prior, rising from $375.00 million to $607.00 million.
  • Although HES's debt-to-equity ratio of 0.30 is very low, it is currently higher than that of the industry average. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.98 is somewhat weak and could be cause for future problems.
  • HES has underperformed the S&P 500 Index, declining 10.99% 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 HESS CORP is rather low; currently it is at 24.10%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 6.20% trails that of the industry average.

Hess Corporation and its subsidiaries operate as an integrated energy company. It operates in two segments, Exploration and Production (E&P) and Marketing and Refining (M&R). The E&P segment explores for, develops, produces, purchases, transports, and sells crude oil and natural gas. The company has a P/E ratio of seven, equal to the average energy industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Hess has a market cap of $19.5 billion and is part of the basic materials sector and energy industry. Shares are down 25.8% year to date as of the close of trading on Tuesday.

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

Rating Change #9

Kinross Gold Corporation ( KGC) 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 a generally disappointing performance in the stock itself and disappointing return on equity.

Highlights from the ratings report include:
  • KINROSS GOLD CORP has improved earnings per share by 46.7% 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, KINROSS GOLD CORP increased its bottom line by earning $0.93 versus $0.45 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 Metals & Mining industry. The net income increased by 138.3% when compared to the same quarter one year prior, rising from $103.80 million to $247.40 million.
  • The gross profit margin for KINROSS GOLD CORP is rather high; currently it is at 58.20%. 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 25.00% trails the industry average.
  • KGC has underperformed the S&P 500 Index, declining 23.62% 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.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Metals & Mining industry and the overall market, KINROSS GOLD CORP's return on equity is below that of both the industry average and the S&P 500.

Kinross Gold Corporation, together with its subsidiaries, engages in mining and processing gold ores. It also involves in the exploration and acquisition of gold bearing properties. The company has a P/E ratio of 15.3, above the average metals & mining industry P/E ratio of 15 and below the S&P 500 P/E ratio of 17.7. Kinross has a market cap of $16.6 billion and is part of the basic materials sector and metals & mining industry. Shares are down 23.1% year to date as of the close of trading on Thursday.

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

Rating Change #8

Consol Energy ( CNX) 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, growth in earnings per share and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including generally poor debt management, poor profit margins and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • CNX's revenue growth trails the industry average of 37.3%. Since the same quarter one year prior, revenues rose by 23.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • CONSOL ENERGY INC has improved earnings per share by 17.2% 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, CONSOL ENERGY INC reported lower earnings of $1.62 versus $2.95 in the prior year. This year, the market expects an improvement in earnings ($2.92 versus $1.62).
  • The gross profit margin for CONSOL ENERGY INC is rather low; currently it is at 22.80%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 5.00% trails that of the industry average.
  • The debt-to-equity ratio of 1.10 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 0.39, which clearly demonstrates the inability to cover short-term cash needs.

CONSOL Energy Inc. engages in the production of multi-fuel energy and provision of energy services primarily to the electric power generation industry in the United States. The company has a P/E ratio of 21, above the average metals & mining industry P/E ratio of 20.9 and above the S&P 500 P/E ratio of 17.7. Consol Energy has a market cap of $9.4 billion and is part of the basic materials sector and metals & mining industry. Shares are down 15% year to date as of the close of trading on Tuesday.

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

Rating Change #7

Ingersoll-Rand ( IR) has been downgraded by TheStreet Ratings from buy to hold. Among the primary strengths of the company is its revenue growth. At the same time, however, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and poor profit margins.

Highlights from the ratings report include:
  • The revenue growth significantly trails the industry average of 40.6%. Since the same quarter one year prior, revenues slightly increased by 5.3%. 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.
  • INGERSOLL-RAND PLC has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, INGERSOLL-RAND PLC increased its bottom line by earning $2.24 versus $1.47 in the prior year. This year, the market expects an improvement in earnings ($2.73 versus $2.24).
  • The gross profit margin for INGERSOLL-RAND PLC is currently lower than what is desirable, coming in at 29.40%. Regardless of IR'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 2.20% trails 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 Machinery industry. The net income has significantly decreased by 62.9% when compared to the same quarter one year ago, falling from $232.20 million to $86.20 million.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 28.76%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 65.00% compared to the year-earlier quarter. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.

Ingersoll-Rand Plc engages in the design, manufacture, sale, and service of a portfolio of industrial and commercial products in the United States and internationally. The company has a P/E ratio of 11.1, below the average industrial industry P/E ratio of 22.2 and below the S&P 500 P/E ratio of 17.7. Ingersoll-Rand has a market cap of $9.8 billion and is part of the industrial goods sector and industrial industry. Shares are down 41.9% year to date as of the close of trading on Friday.

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

Rating Change #6

Beam Inc ( BEAM) 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, 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 a generally disappointing performance in the stock itself, disappointing return on equity and weak operating cash flow.

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 Beverages industry. The net income increased by 44.5% when compared to the same quarter one year prior, rising from $227.40 million to $328.60 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 14.5%. Since the same quarter one year prior, revenues slightly increased by 5.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The debt-to-equity ratio is somewhat low, currently at 0.62, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Despite the fact that BEAM's debt-to-equity ratio is low, the quick ratio, which is currently 0.59, displays a potential problem in covering short-term cash needs.
  • Net operating cash flow has decreased to $212.80 million or 22.10% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Beverages industry and the overall market, BEAM INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.

Beam Inc. engages in producing and selling premium spirits worldwide. Beam has a market cap of $7.5 billion and is part of the consumer goods sector and consumer durables industry.

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

Rating Change #5

CA Inc ( CA) 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, attractive valuation levels, good cash flow from operations 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:
  • CA's revenue growth has slightly outpaced the industry average of 2.4%. Since the same quarter one year prior, revenues slightly increased by 8.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Although CA's debt-to-equity ratio of 0.23 is very low, it is currently higher than that of the industry average. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.03, which illustrates the ability to avoid short-term cash problems.
  • Net operating cash flow has increased to $131.00 million or 11.96% when compared to the same quarter last year. In addition, CA INC has also modestly surpassed the industry average cash flow growth rate of 10.10%.
  • CA INC's earnings per share improvement from the most recent quarter was slightly positive. 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, CA INC increased its bottom line by earning $1.60 versus $1.44 in the prior year. This year, the market expects an improvement in earnings ($2.18 versus $1.60).

CA Technologies, together with its subsidiaries, designs, develops, markets, delivers, licenses, and supports information technology (IT) management software products that operate on a range of hardware platforms and operating systems. The company has a P/E ratio of 13.4, above the average computer software & services industry P/E ratio of 13.1 and below the S&P 500 P/E ratio of 17.7. CA has a market cap of $11 billion and is part of the technology sector and computer software & services industry. Shares are down 11% year to date as of the close of trading on Tuesday.

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

Rating Change #4

Alliance Data Systems ( ADS) 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, good cash flow from operations and solid stock price performance. 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:
  • The revenue growth came in higher than the industry average of 7.4%. Since the same quarter one year prior, revenues rose by 20.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • ALLIANCE DATA SYSTEMS CORP 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, ALLIANCE DATA SYSTEMS CORP increased its bottom line by earning $3.51 versus $3.08 in the prior year. This year, the market expects an improvement in earnings ($7.31 versus $3.51).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the IT Services industry. The net income increased by 77.2% when compared to the same quarter one year prior, rising from $53.06 million to $94.00 million.
  • Net operating cash flow has increased to $355.56 million or 43.94% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 3.24%.
  • Powered by its strong earnings growth of 66.66% and other important driving factors, this stock has surged by 51.22% over the past year, outperforming the rise in the S&P 500 Index during the same period. 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.

Alliance Data Systems Corporation, together with its subsidiaries, provides data-driven and transaction-based marketing, and customer loyalty solutions primarily in the United States and Canada. The company operates in three segments: LoyaltyOne, Epsilon, and Private Label Services and Credit. The company has a P/E ratio of 20.3, equal to the average diversified services industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Alliance Data Systems has a market cap of $4.7 billion and is part of the services sector and diversified services industry. Shares are up 30.9% year to date as of the close of trading on Friday.

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

Rating Change #3

Spectra Energy Partners ( SEP) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, expanding profit margins, largely solid financial position with reasonable debt levels by most measures and increase in net income. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • Net operating cash flow has increased to $61.50 million or 46.77% when compared to the same quarter last year. In addition, SPECTRA ENERGY PARTNERS LP has also modestly surpassed the industry average cash flow growth rate of 38.61%.
  • The gross profit margin for SPECTRA ENERGY PARTNERS LP is rather high; currently it is at 52.80%. Regardless of SEP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SEP's net profit margin of 87.40% significantly outperformed against the industry.
  • Despite currently having a low debt-to-equity ratio of 0.42, 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 7.20 is very high and demonstrates very strong liquidity.
  • SPECTRA ENERGY PARTNERS LP's earnings per share declined by 5.3% in the most recent quarter compared to the same quarter a year ago. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. We anticipate these figures will begin to experience more growth in the coming year. During the past fiscal year, SPECTRA ENERGY PARTNERS LP reported lower earnings of $1.69 versus $1.70 in the prior year. This year, the market expects an improvement in earnings ($1.73 versus $1.69).
  • The revenue fell significantly faster than the industry average of 37.3%. Since the same quarter one year prior, revenues slightly dropped by 9.3%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.

Spectra Energy Partners, LP operates as an investment arm of Spectra Energy Corp. The company has a P/E ratio of 17.5, equal to the average energy industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Spectra Energy has a market cap of $2.9 billion and is part of the basic materials sector and energy industry. Shares are down 9.5% year to date as of the close of trading on Tuesday.

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

Rating Change #2

Mercury General Corporation ( MCY) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Insurance industry. The net income increased by 221.3% when compared to the same quarter one year prior, rising from $17.82 million to $57.25 million.
  • MCY's revenue growth trails the industry average of 20.7%. Since the same quarter one year prior, revenues slightly increased by 8.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • MCY's debt-to-equity ratio is very low at 0.14 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
  • Net operating cash flow has significantly increased by 199.96% to $57.48 million when compared to the same quarter last year. In addition, MERCURY GENERAL CORP has also vastly surpassed the industry average cash flow growth rate of 82.67%.

Mercury General Corporation, together with its subsidiaries, engages in writing private passenger and commercial automobile insurance in the United States. The company also writes homeowners, mechanical breakdown, fire, umbrella, and commercial automobile and property insurance. The company has a P/E ratio of 11.7, equal to the average insurance industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Mercury General has a market cap of $2.2 billion and is part of the financial sector and insurance industry. Shares are down 6.1% year to date as of the close of trading on Friday.

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

Rating Change #1

Rambus ( RMBS) 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, increase in net income and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, disappointing return on equity and premium valuation.

Highlights from the ratings report include:
  • RMBS's very impressive revenue growth greatly exceeded the industry average of 14.9%. Since the same quarter one year prior, revenues leaped by 215.8%. 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 Semiconductors & Semiconductor Equipment industry. The net income increased by 102.3% when compared to the same quarter one year prior, rising from -$20.58 million to $0.48 million.
  • Despite currently having a low debt-to-equity ratio of 0.37, 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 4.43 is very high and demonstrates very strong liquidity.
  • 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 Semiconductors & Semiconductor Equipment industry and the overall market, RAMBUS INC's return on equity significantly trails that of both the industry average and the S&P 500.

Rambus Inc. engages in the creation, design, development, and licensing of patented innovations, technologies, and architectures to digital electronics products and systems. Rambus has a market cap of $1.9 billion and is part of the technology sector and electronics industry. Shares are down 20.9% year to date as of the close of trading on Friday.

You can view the full Rambus 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.