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 69 U.S. common stocks for week ending November 25, 2011. 34 stocks were upgraded and 35 stocks were downgraded by our stock model.

Rating Change #10

Alleghany Corp DEL ( Y) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:
  • Y's debt-to-equity ratio is very low at 0.11 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 remained constant at $77.22 million with no significant change when compared to the same quarter last year. Along with maintaining stable cash flow from operations, the firm exceeded the industry average cash flow growth rate of -13.96%.
  • 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 Insurance industry. The net income has significantly decreased by 47.7% when compared to the same quarter one year ago, falling from $36.63 million to $19.16 million.
  • 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. When compared to other companies in the Insurance industry and the overall market, ALLEGHANY CORP's return on equity is below that of both the industry average and the S&P 500.

Alleghany Corporation, through its subsidiaries, engages in the property and casualty, and surety insurance business in the United States. The company has a P/E ratio of 17.4, equal to the average insurance industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Alleghany Corp DEL has a market cap of $2.38 billion and is part of the financial sector and insurance industry. Shares are down 8.9% year to date as of the close of trading on Friday.

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

Rating Change #9

Lear Corporation ( LEA) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and 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:
  • LEA's revenue growth has slightly outpaced the industry average of 19.6%. Since the same quarter one year prior, revenues rose by 22.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • LEA's debt-to-equity ratio is very low at 0.26 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.16, which illustrates the ability to avoid short-term cash problems.
  • Net operating cash flow has increased to $155.60 million or 31.75% when compared to the same quarter last year. Despite an increase in cash flow of 31.75%, LEAR CORP is still growing at a significantly lower rate than the industry average of 327.56%.
  • LEA has underperformed the S&P 500 Index, declining 10.08% 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 LEAR CORP is currently extremely low, coming in at 10.00%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 2.90% trails that of the industry average.

Lear Corporation designs, manufactures, assembles, and supplies automotive seat systems, electrical distribution systems, and related components. The company operates in two segments, Seating and Electrical Power Management Systems (EPMS). The company has a P/E ratio of 7.9, below the average automotive industry P/E ratio of 8.4 and below the S&P 500 P/E ratio of 17.7. Lear has a market cap of $4.41 billion and is part of the consumer goods sector and automotive industry. Shares are down 19.7% year to date as of the close of trading on Tuesday.

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

Rating Change #8

Coca-Cola Enterprises Inc ( CCE) 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, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we find that the company has not been very careful in the management of its balance sheet.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 13.5%. Since the same quarter one year prior, revenues rose by 27.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • COCA-COLA ENTERPRISES INC has improved earnings per share by 44.3% 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, COCA-COLA ENTERPRISES INC increased its bottom line by earning $1.83 versus $1.70 in the prior year. This year, the market expects an improvement in earnings ($2.17 versus $1.83).
  • After a year of stock price fluctuations, the net result is that CCE'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. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • 41.50% is the gross profit margin for COCA-COLA ENTERPRISES INC which we consider to be strong. Regardless of CCE's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 13.30% trails the industry average.
  • CCE's debt-to-equity ratio of 0.97 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 1.29 is sturdy.

Coca-Cola Enterprises Inc. engages in the production, distribution, and marketing of non-alcoholic beverages of The Coca-Cola Company in western Europe. The company has a P/E ratio of 7.5, below the average food & beverage industry P/E ratio of 11 and below the S&P 500 P/E ratio of 17.7. Coca-Cola Enterprises has a market cap of $7.6 billion and is part of the consumer goods sector and food & beverage industry. Shares are down 2.7% year to date as of the close of trading on Friday.

You can view the full Coca-Cola Enterprises Ratings Report or get investment ideas from our investment research center.

Rating Change #7

Amgen Inc ( AMGN) 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, reasonable valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income and weak operating cash flow.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 6.8%. Since the same quarter one year prior, revenues slightly increased by 3.4%. 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.
  • AMGN's debt-to-equity ratio of 0.61 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. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 3.84 is very high and demonstrates very strong liquidity.
  • Net operating cash flow has decreased to $969.00 million or 25.57% 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, 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 Biotechnology industry. The net income has significantly decreased by 63.3% when compared to the same quarter one year ago, falling from $1,236.00 million to $454.00 million.

Amgen Inc., a biotechnology medicines company, discovers, develops, manufactures, and markets human therapeutics based on advances in cellular and molecular biology for grievous illnesses primarily in the United States, Europe, and Canada. The company has a P/E ratio of 13.8, equal to the average drugs industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Amgen has a market cap of $48.71 billion and is part of the health care sector and drugs industry. Shares are up 0.1% year to date as of the close of trading on Tuesday.

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

Rating Change #6

Berkshire Hathaway Inc ( BRK.B) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its attractive valuation levels and largely solid financial position with reasonable debt levels by most measures. 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:
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 7.0%. Since the same quarter one year prior, revenues slightly dropped by 7.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Despite currently having a low debt-to-equity ratio of 0.38, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further.
  • Net operating cash flow has decreased to $5,999.00 million or 13.94% when compared to the same quarter last year. Despite a decrease in cash flow of 13.94%, BERKSHIRE HATHAWAY is in line with the industry average cash flow growth rate of -13.96%.
  • The gross profit margin for BERKSHIRE HATHAWAY is rather low; currently it is at 15.20%. It has decreased from the same quarter the previous year. Regardless of the weak results of the gross profit margin, BRK.B's net profit margin of 6.80% is in-line with the industry average.

Berkshire Hathaway, Inc. is a publicly owned investment manager. Through its subsidiaries, the firm primarily engages in the insurance and reinsurance of property and casualty risks business. Berkshire Hathaway was founded in 1889 and is based in Omaha, Nebraska. The company has a P/E ratio of 15.5, above the average insurance industry P/E ratio of 15.1 and below the S&P 500 P/E ratio of 17.7. Berkshire Hathaway has a market cap of $79.36 billion and is part of the financial sector and insurance industry. Shares are down 9.2% year to date as of the close of trading on Friday.

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

Rating Change #5

Jack In The Box ( JACK) 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, attractive valuation levels, good cash flow from operations, notable return on equity and impressive record of earnings per share growth. 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 net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Hotels, Restaurants & Leisure industry. The net income increased by 460.7% when compared to the same quarter one year prior, rising from $4.04 million to $22.65 million.
  • Net operating cash flow has significantly increased by 99.56% to $32.24 million when compared to the same quarter last year. In addition, JACK IN THE BOX INC has also vastly surpassed the industry average cash flow growth rate of 10.67%.
  • 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 Hotels, Restaurants & Leisure industry and the overall market on the basis of return on equity, JACK IN THE BOX INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • JACK IN THE BOX 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. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, JACK IN THE BOX INC increased its bottom line by earning $1.61 versus $1.26 in the prior year. For the next year, the market is expecting a contraction of 4.3% in earnings ($1.54 versus $1.61).

Jack in the Box Inc. operates and franchises Jack in the Box quick-service restaurants and Qdoba Mexican Grill fast-casual dining restaurants. The company has a P/E ratio of 17.1, below the average leisure industry P/E ratio of 17.2 and below the S&P 500 P/E ratio of 17.7. Jack In The Box has a market cap of $957.9 million and is part of the services sector and leisure industry. Shares are down 4.8% year to date as of the close of trading on Tuesday.

You can view the full Jack In The Box Ratings Report or get investment ideas from our investment research center.

Rating Change #4

Brandywine Realty ( BDN) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth and good cash flow from operations. 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:
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income increased by 197.1% when compared to the same quarter one year prior, rising from -$6.44 million to $6.25 million.
  • BDN's revenue growth trails the industry average of 18.0%. Since the same quarter one year prior, revenues slightly increased by 2.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • BRANDYWINE REALTY TRUST 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, BRANDYWINE REALTY TRUST reported poor results of -$0.29 versus -$0.03 in the prior year.
  • BDN has underperformed the S&P 500 Index, declining 23.08% 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 BRANDYWINE REALTY TRUST is rather low; currently it is at 19.50%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 4.30% significantly trails the industry average.

Brandywine Realty Trust is a publicly owned real estate investment firm. The firm engages in the engaged in the ownership, management, leasing, acquisition, and development of office and industrial properties. It primarily manages Class-A, suburban and urban office portfolio. Brandywine has a market cap of $1.21 billion and is part of the financial sector and real estate industry. Shares are down 27% year to date as of the close of trading on Tuesday.

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

Rating Change #3

Bank of Hawaii Corporation ( BOH) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its expanding profit margins, good cash flow from operations, growth in earnings per share and notable return on equity. 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 gross profit margin for BANK OF HAWAII CORP is currently very high, coming in at 90.90%. 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 27.10% trails the industry average.
  • Net operating cash flow has significantly increased by 60.11% to $86.66 million when compared to the same quarter last year. Despite an increase in cash flow of 60.11%, BANK OF HAWAII CORP is still growing at a significantly lower rate than the industry average of 289.99%.
  • BANK OF HAWAII 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. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, BANK OF HAWAII CORP increased its bottom line by earning $3.80 versus $3.00 in the prior year. For the next year, the market is expecting a contraction of 11.3% in earnings ($3.37 versus $3.80).
  • BOH, with its decline in revenue, slightly underperformed the industry average of 2.6%. Since the same quarter one year prior, revenues slightly dropped by 9.4%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • 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 Commercial Banks industry and the overall market, BANK OF HAWAII CORP's return on equity exceeds that of both the industry average and the S&P 500.

Bank of Hawaii Corporation operates as the holding company for Bank of Hawaii that provides a range of financial services and products in Hawaii, Guam, and other Pacific Islands. The company operates in four segments: Retail Banking, Commercial Banking, Investment Services, and Treasury. The company has a P/E ratio of 11.7, equal to the average banking industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Bank of Hawaii has a market cap of $1.84 billion and is part of the financial sector and banking industry. Shares are down 16.2% year to date as of the close of trading on Friday.

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

Rating Change #2

Rosetta Resources ( ROSE) has been upgraded by TheStreet Ratings from hold to buy. 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, robust revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:
  • ROSETTA RESOURCES 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. During the past fiscal year, ROSETTA RESOURCES INC turned its bottom line around by earning $0.37 versus -$4.30 in the prior year. This year, the market expects an improvement in earnings ($1.96 versus $0.37).
  • 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 261.0% when compared to the same quarter one year prior, rising from $8.85 million to $31.95 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 35.6%. Since the same quarter one year prior, revenues rose by 26.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The current debt-to-equity ratio, 0.41, 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 1.04, which illustrates the ability to avoid short-term cash problems.
  • The gross profit margin for ROSETTA RESOURCES INC is currently very high, coming in at 79.00%. It has increased significantly from the same period last year. Along with this, the net profit margin of 31.60% significantly outperformed against the industry average.

Rosetta Resources Inc., an independent exploration and production company, engages in the exploration, development, production, and acquisition of onshore oil and gas resources in the United States. The company has a P/E ratio of 37.3, equal to the average energy industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Rosetta has a market cap of $2.53 billion and is part of the basic materials sector and energy industry. Shares are up 24.1% year to date as of the close of trading on Tuesday.

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

Rating Change #1

DIRECTV ( DTV) 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, impressive record of earnings per share growth, revenue growth, 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 shows weak operating cash flow.

Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 19.6%. Since the same quarter one year prior, revenues rose by 13.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.81 is weak.
  • 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, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • DIRECTV has improved earnings per share by 27.3% 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, DIRECTV increased its bottom line by earning $2.48 versus $0.94 in the prior year. This year, the market expects an improvement in earnings ($3.38 versus $2.48).
  • The net income growth from the same quarter one year ago has exceeded that of the Media industry average, but is less than that of the S&P 500. The net income increased by 7.7% when compared to the same quarter one year prior, going from $479.00 million to $516.00 million.

DIRECTV, Inc. provides digital television entertainment in the United States and Latin America. The company provides direct-to-home (DTH) digital television services, as well as multi-channel video programming distribution services in the United States. The company has a P/E ratio of 14, below the average media industry P/E ratio of 14.5 and below the S&P 500 P/E ratio of 17.7. DIRECTV has a market cap of $32.7 billion and is part of the services sector and media industry. Shares are up 12.2% year to date as of the close of trading on Friday.

You can view the full DIRECTV 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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