TheStreet Ratings Top 10 Rating Changes

NEW YORK ( TheStreet Ratings) -- Every trading day TheStreet Ratings' stock model reviews the investment ratings on around 4,700 U.S. traded stocks for potential upgrades or downgrades based on the latest available financial results and trading activity.

TheStreet Ratings released rating changes on 53 U.S. common stocks for week ending December 23, 2011. 39 stocks were upgraded and 14 stocks were downgraded by our stock model.

Rating Change #10

Grand Canyon Education Inc ( LOPE) 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, expanding profit margins 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, weak operating cash flow and disappointing return on equity.

Highlights from the ratings report include:
  • LOPE's revenue growth has slightly outpaced the industry average of 5.7%. Since the same quarter one year prior, revenues rose by 10.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The gross profit margin for GRAND CANYON EDUCATION INC is rather high; currently it is at 59.00%. 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 11.80% trails the industry average.
  • LOPE's debt-to-equity ratio is very low at 0.16 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.71 is somewhat weak and could be cause for future problems.
  • Net operating cash flow has decreased to $29.47 million or 41.54% 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.
  • LOPE has underperformed the S&P 500 Index, declining 18.93% 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.

Grand Canyon Education, Inc. provides postsecondary education services in the United States. The company focuses on graduate and undergraduate degree programs primarily in the disciplines of education, business, healthcare, and liberal arts. The company has a P/E ratio of 13.4, below the average diversified services industry P/E ratio of 14.1 and below the S&P 500 P/E ratio of 17.7. Grand Canyon has a market cap of $626.4 million and is part of the services sector and diversified services industry. Shares are down 22.8% year to date as of the close of trading on Tuesday.

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

Rating Change #9

Ship Finance International Ltd ( SFL) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, generally weak debt management, disappointing return on equity and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • SHIP FINANCE INTL LTD's earnings per share declined by 20.4% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, SHIP FINANCE INTL LTD reported lower earnings of $2.10 versus $2.55 in the prior year. For the next year, the market is expecting a contraction of 20.9% in earnings ($1.66 versus $2.10).
  • 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 Oil, Gas & Consumable Fuels industry. The net income has decreased by 20.7% when compared to the same quarter one year ago, dropping from $34.63 million to $27.45 million.
  • The debt-to-equity ratio is very high at 2.41 and currently higher than the industry average, implying that there is very poor management of debt levels within the company. To add to this, SFL has a quick ratio of 0.50, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
  • 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. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, SHIP FINANCE INTL LTD has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • Looking at the price performance of SFL's shares over the past 12 months, there is not much good news to report: the stock is down 57.69%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.

Ship Finance International Limited, through its subsidiaries, engages in the ownership and operation of vessels and offshore related assets in Bermuda, Cyprus, Malta, Liberia, Norway, the United States, Singapore, the United Kingdom, and the Marshall Islands. The company has a P/E ratio of 5.2, below the average transportation industry P/E ratio of 6.8 and below the S&P 500 P/E ratio of 17.7. Ship Finance International has a market cap of $685.2 million and is part of the services sector and transportation industry. Shares are down 57.3% year to date as of the close of trading on Wednesday.

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

Rating Change #8

Cheniere Energy Inc ( LNG) 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 and weak operating cash flow.

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 Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 32.9% when compared to the same quarter one year ago, falling from -$40.58 million to -$53.94 million.
  • Net operating cash flow has significantly decreased to -$10.39 million or 215.82% 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 CHENIERE ENERGY INC is currently very high, coming in at 80.50%. Regardless of LNG's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, LNG's net profit margin of -82.00% significantly underperformed when compared to the industry average.
  • The revenue fell significantly faster than the industry average of 35.8%. Since the same quarter one year prior, revenues slightly dropped by 3.6%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • CHENIERE ENERGY INC has improved earnings per share by 8.2% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, CHENIERE ENERGY INC continued to lose money by earning -$2.02 versus -$3.19 in the prior year. For the next year, the market is expecting a contraction of 11.4% in earnings (-$2.25 versus -$2.02).

Cheniere Energy, Inc., through its subsidiaries, engages in the ownership and operation of liquefied natural gas (LNG) receiving terminals and natural gas pipelines in the Gulf Coast of the United States. Cheniere Energy has a market cap of $690.1 million and is part of the basic materials sector and energy industry. Shares are up 51.8% year to date as of the close of trading on Thursday.

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

Rating Change #7

Ralcorp Holdings Incorporated ( RAH) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.

Highlights from the ratings report include:
  • RAH's revenue growth trails the industry average of 23.6%. Since the same quarter one year prior, revenues slightly increased by 8.3%. 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 its closing price of one year ago, RAH's share price has jumped by 32.28%, exceeding the performance of the broader market during that same time frame. 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.
  • The gross profit margin for RALCORP HOLDINGS INC is currently lower than what is desirable, coming in at 27.20%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -30.30% is significantly below that of 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 Food Products industry. The net income has significantly decreased by 983.3% when compared to the same quarter one year ago, falling from $41.90 million to -$370.10 million.

Ralcorp Holdings, Inc. engages in manufacturing, distributing, and marketing private-brand food products, ready-to-eat cereal products, and other regional and value-brand food products. Ralcorp has a market cap of $4.64 billion and is part of the consumer goods sector and food & beverage industry. Shares are up 32.3% year to date as of the close of trading on Thursday.

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

Rating Change #6

Delhaize Group SA ( DEG) 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 unimpressive growth in net income, disappointing return on equity and poor profit margins.

Highlights from the ratings report include:
  • The revenue fell significantly faster than the industry average of 5.2%. Since the same quarter one year prior, revenues fell by 29.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • 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 Food & Staples Retailing industry. The net income has significantly decreased by 31.3% when compared to the same quarter one year ago, falling from $222.38 million to $152.77 million.
  • 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 Food & Staples Retailing industry and the overall market, DELHAIZE GROUP - ETS DLHZ FR's return on equity is below that of both the industry average and the S&P 500.

Etablissements Delhaize Freres et Cie Le Lion (Groupe Delhaize) S.A., together with its subsidiaries, engages in the operations of food supermarkets in North America, Europe, and southeast Asia. The company has a P/E ratio of 6.8, below the average retail industry P/E ratio of 7.2 and below the S&P 500 P/E ratio of 17.7. Delhaize Group has a market cap of $5.53 billion and is part of the services sector and retail industry. Shares are down 25.7% year to date as of the close of trading on Tuesday.

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

Rating Change #5

Hancock Holding Company ( HBHC) 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, expanding profit margins 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:
  • HBHC's very impressive revenue growth greatly exceeded the industry average of 3.3%. Since the same quarter one year prior, revenues leaped by 117.8%. 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 gross profit margin for HANCOCK HOLDING CO is currently very high, coming in at 88.60%. It has increased significantly from the same period last year. Despite the strong results of the gross profit margin, HBHC's net profit margin of 11.60% significantly trails the industry average.
  • HANCOCK HOLDING CO's earnings per share declined by 10.0% 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 two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, HANCOCK HOLDING CO reported lower earnings of $1.40 versus $2.23 in the prior year. This year, the market expects an improvement in earnings ($2.00 versus $1.40).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Commercial Banks industry average, but is greater than that of the S&P 500. The net income increased by 104.5% when compared to the same quarter one year prior, rising from $14.85 million to $30.38 million.
  • 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 on the basis of return on equity, HANCOCK HOLDING CO underperformed against that of the industry average and is significantly less than that of the S&P 500.

Hancock Holding Company, a financial holding company, provides various banking and financial services in south Mississippi, Louisiana, South Alabama, and Florida. The company has a P/E ratio of 22.2, above the average banking industry P/E ratio of 21.9 and above the S&P 500 P/E ratio of 17.7. Hancock Holding has a market cap of $2.68 billion and is part of the financial sector and banking industry. Shares are down 7.4% year to date as of the close of trading on Friday.

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

Rating Change #4

Ingram Micro Inc ( IM) 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 largely solid financial position with reasonable debt levels by most measures. 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 revenue growth significantly trails the industry average of 45.3%. 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.
  • Net operating cash flow has increased to -$18.50 million or 48.64% when compared to the same quarter last year. In addition, INGRAM MICRO INC has also vastly surpassed the industry average cash flow growth rate of -56.81%.
  • IM's debt-to-equity ratio is very low at 0.13 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.95 is somewhat weak and could be cause for future problems.
  • After a year of stock price fluctuations, the net result is that IM'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. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.

Ingram Micro Inc. distributes information technology (IT) products and supply chain solutions worldwide. The company has a P/E ratio of 10.7, equal to the average wholesale industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Ingram Micro has a market cap of $2.58 billion and is part of the services sector and wholesale industry. Shares are down 7.6% year to date as of the close of trading on Wednesday.

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

Rating Change #3

Education Management Corporation ( EDMC) 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, revenue growth and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, weak operating cash flow and feeble growth in the company's earnings per share.

Highlights from the ratings report include:
  • Compared to its closing price of one year ago, EDMC's share price has jumped by 65.71%, exceeding the performance of the broader market during that same time frame. 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.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 5.6%. Since the same quarter one year prior, revenues slightly increased by 2.4%. 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.
  • 45.20% is the gross profit margin for EDUCATION MANAGEMENT CORP which we consider to be strong. Regardless of EDMC'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 4.00% 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 Diversified Consumer Services industry. The net income has significantly decreased by 26.0% when compared to the same quarter one year ago, falling from $36.45 million to $26.95 million.
  • Net operating cash flow has declined marginally to $221.31 million or 4.19% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, EDUCATION MANAGEMENT CORP has marginally lower results.

Education Management Corporation provides post-secondary education in North America. The company has a P/E ratio of 15.4, above the average diversified services industry P/E ratio of 14.2 and below the S&P 500 P/E ratio of 17.7. Education Management has a market cap of $2.93 billion and is part of the services sector and diversified services industry. Shares are up 40.7% year to date as of the close of trading on Friday.

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

Rating Change #2

TELUS Corp ( TU) 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, solid stock price performance, notable return on equity, compelling growth in net income and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • TU's revenue growth has slightly outpaced the industry average of 4.0%. Since the same quarter one year prior, revenues slightly increased by 6.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 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.
  • 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 Diversified Telecommunication Services industry and the overall market, TELUS CORP's return on equity exceeds that of both the industry average and the S&P 500.
  • 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 Diversified Telecommunication Services industry average. The net income increased by 32.1% when compared to the same quarter one year prior, rising from $246.00 million to $325.00 million.
  • TELUS CORP has improved earnings per share by 31.6% 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. During the past fiscal year, TELUS CORP increased its bottom line by earning $3.22 versus $3.14 in the prior year.

TELUS Corporation provides telecommunications products and services primarily in Canada. The company operates through two segments, Wireless and Wireline. The Wireless segment provides digital personal communications, equipment sales, and wireless Internet services. The company has a P/E ratio of 14.9, above the average telecommunications industry P/E ratio of 13.6 and below the S&P 500 P/E ratio of 17.7. TELUS has a market cap of $7.69 billion and is part of the technology sector and telecommunications industry. Shares are up 18.2% year to date as of the close of trading on Tuesday.

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

Rating Change #1

Wells Fargo & Co ( WFC) 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, expanding profit margins, good cash flow from operations, notable return on equity and attractive valuation levels. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • WELLS FARGO & CO has improved earnings per share by 20.0% 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, WELLS FARGO & CO increased its bottom line by earning $2.21 versus $1.77 in the prior year. This year, the market expects an improvement in earnings ($2.81 versus $2.21).
  • The gross profit margin for WELLS FARGO & CO is currently very high, coming in at 83.80%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, WFC's net profit margin of 19.10% significantly trails the industry average.
  • Net operating cash flow has significantly increased by 55.19% to $9,228.00 million when compared to the same quarter last year. Despite an increase in cash flow of 55.19%, WELLS FARGO & CO is still growing at a significantly lower rate than the industry average of 1364.55%.
  • 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 Commercial Banks industry and the overall market on the basis of return on equity, WELLS FARGO & CO has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.

Wells Fargo & Company, through its subsidiaries, provides retail, commercial, and corporate banking services primarily in the United States. The company operates in three segments: Community Banking; Wholesale Banking; and Wealth, Brokerage, and Retirement. The company has a P/E ratio of 10, above the average banking industry P/E ratio of 9.4 and below the S&P 500 P/E ratio of 17.7. Wells Fargo has a market cap of $133.47 billion and is part of the financial sector and banking industry. Shares are down 12.1% year to date as of the close of trading on Friday.

You can view the full Wells Fargo 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.