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 97 U.S. common stocks for week ending November 18, 2011. 69 stocks were upgraded and 28 stocks were downgraded by our stock model.

Rating Change #10

Tam SA ( TAM) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally weak debt management, disappointing return on equity, weak operating cash flow 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 Airlines industry. The net income has significantly decreased by 183.5% when compared to the same quarter one year ago, falling from $424.30 million to -$354.23 million.
  • The debt-to-equity ratio is very high at 4.59 and currently higher than the industry average, implying that there is very poor management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, TAM maintains a poor quick ratio of 0.88, which illustrates the inability to avoid short-term cash problems.
  • 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 Airlines industry and the overall market, TAM SA's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to $31.80 million or 87.53% 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 share price of TAM SA has not done very well: it is down 19.23% 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. 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.

TAM S.A., through its subsidiaries, provides passenger and cargo air transportation services in Brazil and internationally. The company also engages in aircraft sub-leasing, as well as aircraft acquisition, financing, and debt issuance activities. The company has a P/E ratio of 12.4, below the S&P 500 P/E ratio of 17.7. Tam has a market cap of $3.1 billion and is part of the services sector and transportation industry. Shares are down 19.3% year to date as of the close of trading on Friday.

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

Rating Change #9

NCR Corporation ( NCR) 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, good cash flow from operations and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, generally poor debt management and disappointing return on equity.

Highlights from the ratings report include:
  • NCR's revenue growth trails the industry average of 38.3%. Since the same quarter one year prior, revenues rose by 16.2%. 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.
  • NCR 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. 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, NCR CORP increased its bottom line by earning $0.68 versus $0.35 in the prior year. This year, the market expects an improvement in earnings ($1.83 versus $0.68).
  • The debt-to-equity ratio of 1.04 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with the unfavorable debt-to-equity ratio, NCR maintains a poor quick ratio of 0.90, which illustrates the inability to avoid short-term cash problems.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. In comparison to the other companies in the Computers & Peripherals industry and the overall market, NCR CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.

NCR Corporation provides technologies and services that enable businesses to connect, interact, and transact with their customers in the financial industry worldwide. The company has a P/E ratio of 32.6, below the average computer software & services industry P/E ratio of 37.9 and above the S&P 500 P/E ratio of 17.7. NCR has a market cap of $3 billion and is part of the technology sector and computer software & services industry. Shares are up 23.2% year to date as of the close of trading on Thursday.

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

Rating Change #8

Ivanhoe Mines Ltd ( IVN) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow, poor profit margins and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • Net operating cash flow has significantly decreased to -$124.46 million or 191.91% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The gross profit margin for IVANHOE MINES LTD is currently lower than what is desirable, coming in at 32.20%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, IVN's net profit margin of 12.10% is significantly lower than the same period one year prior.
  • IVN has underperformed the S&P 500 Index, declining 10.92% 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.
  • 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 Metals & Mining industry and the overall market, IVANHOE MINES LTD's return on equity significantly trails that of both the industry average and the S&P 500.
  • IVN's debt-to-equity ratio is very low at 0.04 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 2.94, which clearly demonstrates the ability to cover short-term cash needs.

Ivanhoe Mines Ltd. operates as an exploration and development company. The company's principal mineral resource property is Oyu Tolgoi copper-gold-silver project located in southern Mongolia. Ivanhoe Mines has a market cap of $15.2 billion and is part of the basic materials sector and metals & mining industry. Shares are down 7.7% year to date as of the close of trading on Wednesday.

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

Rating Change #7

Lowe's Companies ( LOW) 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, solid stock price performance and notable return on equity. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, poor profit margins and weak operating cash flow.

Highlights from the ratings report include:
  • LOW's revenue growth has slightly outpaced the industry average of 5.1%. Since the same quarter one year prior, revenues slightly increased by 2.3%. 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.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Looking ahead, our view is that this company's fundamentals will not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.
  • The gross profit margin for LOWE'S COMPANIES INC is currently lower than what is desirable, coming in at 34.10%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 1.90% trails that of the industry average.
  • Net operating cash flow has decreased to $599.00 million or 43.00% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

Lowe's Companies, Inc., together with its subsidiaries, operates as a home improvement retailer. The company offers a range of products for maintenance, repair, remodeling, home decorating, and property maintenance. The company has a P/E ratio of 15.6, equal to the average retail industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Lowe's Companies has a market cap of $29.1 billion and is part of the services sector and retail industry. Shares are down 6.3% year to date as of the close of trading on Tuesday.

You can view the full Lowe's Companies Ratings Report or get investment ideas from our investment research center.

Rating Change #6

Telefonica SA ( TEF) has been downgraded by TheStreet Ratings from buy to hold. Among the primary strengths of the company is its respectable return on equity which we feel is likely to continue. At the same time, however, we also find weaknesses including deteriorating net income, generally poor debt management and poor profit margins.

Highlights from the ratings report include:
  • The revenue fell significantly faster than the industry average of 4.2%. Since the same quarter one year prior, revenues fell by 26.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • 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 Diversified Telecommunication Services industry and the overall market, TELEFONICA SA's return on equity exceeds that of both the industry average and the S&P 500.
  • TELEFONICA SA 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, TELEFONICA SA increased its bottom line by earning $2.98 versus $2.45 in the prior year. For the next year, the market is expecting a contraction of 22.6% in earnings ($2.31 versus $2.98).
  • 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 Diversified Telecommunication Services industry. The net income has significantly decreased by 112.4% when compared to the same quarter one year ago, falling from $7,376.63 million to -$916.56 million.
  • The debt-to-equity ratio is very high at 3.41 and currently higher than the industry average, implying that there is very poor management of debt levels within the company. To add to this, TEF has a quick ratio of 0.58, this demonstrates the lack of ability of the company to cover short-term liquidity needs.

Telefonica, S.A. provides fixed and mobile telephony services primarily in Spain, rest of Europe, and Latin America. The company has a P/E ratio of 57.4, above the average telecommunications industry P/E ratio of 22.4 and above the S&P 500 P/E ratio of 17.7. Telefonica has a market cap of $88.6 billion and is part of the technology sector and telecommunications industry. Shares are down 17.2% year to date as of the close of trading on Wednesday.

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

Rating Change #5

Diamond Offshore Drilling Inc ( DO) 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, expanding profit margins 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 exceeded that of the S&P 500 and greatly outperformed compared to the Energy Equipment & Services industry average. The net income increased by 29.4% when compared to the same quarter one year prior, rising from $198.52 million to $256.85 million.
  • The revenue growth significantly trails the industry average of 39.8%. Since the same quarter one year prior, revenues slightly increased by 9.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The current debt-to-equity ratio, 0.35, is low and is below the industry average, implying that there has been successful management of debt levels. Along with this, the company maintains a quick ratio of 4.75, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for DIAMOND OFFSHRE DRILLING INC is rather high; currently it is at 53.60%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 29.20% significantly outperformed against the industry average.
  • Net operating cash flow has increased to $355.50 million or 39.09% when compared to the same quarter last year. Despite an increase in cash flow, DIAMOND OFFSHRE DRILLING INC's cash flow growth rate is still lower than the industry average growth rate of 65.69%.

Diamond Offshore Drilling, Inc., together with its subsidiaries, operates as an offshore oil and gas drilling contractor worldwide. The company has a P/E ratio of 8.8, equal to the average energy industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Shares are down 6.3% year to date as of the close of trading on Friday.

Rating Change #4

Best Buy Co Inc ( BBY) 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, attractive valuation levels, good cash flow from operations 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:
  • BBY's revenue growth has slightly outpaced the industry average of 6.6%. Since the same quarter one year prior, revenues slightly increased by 0.1%. 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.
  • Net operating cash flow has significantly increased by 350.58% to $213.00 million when compared to the same quarter last year. In addition, BEST BUY CO INC has also vastly surpassed the industry average cash flow growth rate of 11.40%.
  • BEST BUY CO INC's earnings per share declined by 21.7% 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, BEST BUY CO INC increased its bottom line by earning $3.12 versus $3.08 in the prior year. This year, the market expects an improvement in earnings ($3.40 versus $3.12).
  • 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. Compared to other companies in the Specialty Retail industry and the overall market, BEST BUY CO INC's return on equity exceeds that of both the industry average and the S&P 500.

Best Buy Co., Inc. operates as a retailer of consumer electronics, home office products, entertainment products, appliances, and related services primarily in the United States, Europe, Canada, and China. The company has a P/E ratio of 9.6, equal to the average retail industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Best Buy Co has a market cap of $10.3 billion and is part of the services sector and retail industry. Shares are down 19.7% year to date as of the close of trading on Friday.

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

Rating Change #3

Dollar General Corporation ( DG) 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, growth in earnings per share, increase in net income, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 3.9%. Since the same quarter one year prior, revenues rose by 11.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • DOLLAR GENERAL CORP'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 year. We feel that this trend should continue. During the past fiscal year, DOLLAR GENERAL CORP increased its bottom line by earning $1.81 versus $0.50 in the prior year. This year, the market expects an improvement in earnings ($2.30 versus $1.81).
  • The net income growth from the same quarter one year ago has exceeded that of the Multiline Retail industry average, but is less than that of the S&P 500. The net income increased by 3.4% when compared to the same quarter one year prior, going from $141.20 million to $146.04 million.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 36.87% over the past year, a rise that has exceeded that of the S&P 500 Index. 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.
  • The debt-to-equity ratio is somewhat low, currently at 0.63, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.10 is very weak and demonstrates a lack of ability to pay short-term obligations.

Dollar General Corporation operates as a discount retailer of general merchandise in the southern, southwestern, midwestern, and eastern United States. The company has a P/E ratio of 21, above the average retail industry P/E ratio of 20.7 and above the S&P 500 P/E ratio of 17.7. Dollar General has a market cap of $13.3 billion and is part of the services sector and retail industry. Shares are up 29.7% year to date as of the close of trading on Tuesday.

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

Rating Change #2

Raytheon Company ( RTN) 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, attractive valuation levels and good cash flow from operations. 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 current debt-to-equity ratio, 0.35, is low and is below the industry average, implying that there has been successful management of debt levels.
  • Net operating cash flow has significantly increased by 105.98% to $861.00 million when compared to the same quarter last year. In addition, RAYTHEON CO has also vastly surpassed the industry average cash flow growth rate of -27.55%.
  • RAYTHEON CO's earnings per share declined by 16.4% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, RAYTHEON CO reported lower earnings of $4.82 versus $4.90 in the prior year. This year, the market expects an improvement in earnings ($5.05 versus $4.82).
  • RTN, with its decline in revenue, slightly underperformed the industry average of 0.8%. Since the same quarter one year prior, revenues slightly dropped by 2.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.

Raytheon Company designs, develops, manufactures, integrates, and supports technological products, services, and solutions for governmental and commercial customers in the United States and internationally. The company has a P/E ratio of nine, below the average aerospace/defense industry P/E ratio of 9.1 and below the S&P 500 P/E ratio of 17.7. Raytheon has a market cap of $15.8 billion and is part of the industrial goods sector and aerospace/defense industry. Shares are down 2.6% year to date as of the close of trading on Wednesday.

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

Rating Change #1

Medtronic Inc ( MDT) 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, attractive valuation levels, good cash flow from operations, growth in earnings per share and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • MDT's revenue growth has slightly outpaced the industry average of 6.7%. Since the same quarter one year prior, revenues slightly increased by 7.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Net operating cash flow has increased to $1,115.00 million or 38.50% when compared to the same quarter last year. In addition, MEDTRONIC INC has also vastly surpassed the industry average cash flow growth rate of -16.53%.
  • MEDTRONIC 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, MEDTRONIC INC increased its bottom line by earning $2.86 versus $2.79 in the prior year. This year, the market expects an improvement in earnings ($3.44 versus $2.86).
  • After a year of stock price fluctuations, the net result is that MDT's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. 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.

Medtronic, Inc. manufactures and sells device-based medical therapies worldwide. The company has a P/E ratio of 12.2, equal to the average health services industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Medtronic has a market cap of $36.9 billion and is part of the health care sector and health services industry. Shares are down 5.7% year to date as of the close of trading on Thursday.

You can view the full Medtronic 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.

More from Investing

12 Stocks That Make Up the GLUM Index

12 Stocks That Make Up the GLUM Index

REPLAY: Jim Cramer on Tariff Worries, Oil, Alphabet and Centene

REPLAY: Jim Cramer on Tariff Worries, Oil, Alphabet and Centene

Worth a Stunning $6.6 Trillion, Tech Stocks Have Taken Over the Market

Worth a Stunning $6.6 Trillion, Tech Stocks Have Taken Over the Market

Video: Athens Stock Exchange CEO on What's Next for Greece's Debt Woes

Video: Athens Stock Exchange CEO on What's Next for Greece's Debt Woes

Here's Why Snap Shares Climbed Monday

Here's Why Snap Shares Climbed Monday