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 56 U.S. common stocks for week ending January 13, 2012. 43 stocks were upgraded and 13 stocks were downgraded by our stock model.

Rating Change #10

Westell Technologies Inc ( WSTL) 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, notable return on equity and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • WSTL has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 7.40, which clearly demonstrates the ability to cover short-term cash needs.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Communications Equipment industry and the overall market, WESTELL TECH INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • 37.70% is the gross profit margin for WESTELL TECH INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 11.20% 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 Communications Equipment industry. The net income has significantly decreased by 26.6% when compared to the same quarter one year ago, falling from $4.76 million to $3.50 million.
  • Net operating cash flow has decreased to $5.98 million or 28.38% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

Westell Technologies, Inc. engages in the design, distribution, marketing, and servicing a range of broadband, digital transmission, remote monitoring, power distribution, and demarcation products used by telephone companies and other telecommunications service providers. The company has a P/E ratio of 1.9, equal to the average telecommunications industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Westell has a market cap of $121.7 million and is part of the technology sector and telecommunications industry. Shares are up 2.7% year to date as of the close of trading on Friday.

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

Rating Change #9

Hallmark Financial Services ( HALL) 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, disappointing return on equity, poor profit margins and weak operating cash flow.

Highlights from the ratings report include:
  • HALLMARK FINANCIAL SERVICES 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. 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, HALLMARK FINANCIAL SERVICES reported lower earnings of $0.36 versus $1.19 in the prior year. For the next year, the market is expecting a contraction of 308.3% in earnings (-$0.75 versus $0.36).
  • 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 87.7% when compared to the same quarter one year ago, falling from $1.02 million to $0.13 million.
  • 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 Insurance industry and the overall market, HALLMARK FINANCIAL SERVICES's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for HALLMARK FINANCIAL SERVICES is currently extremely low, coming in at 4.10%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 0.10% trails that of the industry average.
  • Net operating cash flow has significantly decreased to $4.02 million or 65.03% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

Hallmark Financial Services, Inc. focuses on marketing, distributing, underwriting, and servicing property/casualty insurance products. The company provides standard commercial insurance, specialty commercial insurance, and personal insurance for businesses and individuals in the United States. Hallmark Financial Services has a market cap of $134.1 million and is part of the financial sector and insurance industry. Shares are unchanged year to date as of the close of trading on Friday.

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

Rating Change #8

Standard Microsystems Corporation ( SMSC) 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 largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

Highlights from the ratings report include:
  • STANDARD MICROSYSTEMS CORP has improved earnings per share by 25.0% 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 year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, STANDARD MICROSYSTEMS CORP turned its bottom line around by earning $0.47 versus -$0.38 in the prior year. This year, the market expects an improvement in earnings ($1.18 versus $0.47).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry average. The net income increased by 28.4% when compared to the same quarter one year prior, rising from -$4.57 million to -$3.28 million.
  • The gross profit margin for STANDARD MICROSYSTEMS CORP is rather high; currently it is at 56.50%. Regardless of SMSC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SMSC's net profit margin of -3.10% significantly underperformed when compared to the industry average.
  • 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 Semiconductors & Semiconductor Equipment industry and the overall market, STANDARD MICROSYSTEMS CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • SMSC has underperformed the S&P 500 Index, declining 7.21% 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.

Standard Microsystems Corporation designs and sells a range of silicon-based integrated circuits that utilize analog and mixed-signal technologies worldwide. The company has a P/E ratio of 171.8, above the average electronics industry P/E ratio of 34.9 and above the S&P 500 P/E ratio of 17.7. Standard Microsystems has a market cap of $534.7 million and is part of the technology sector and electronics industry. Shares are down 6.6% year to date as of the close of trading on Thursday.

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

Rating Change #7

HDFC Bank Ltd ( HDB) 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, notable return on equity and impressive record of earnings per share growth. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and premium valuation.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 1.6%. Since the same quarter one year prior, revenues rose by 37.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • 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, HDFC BANK LTD's return on equity exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for HDFC BANK LTD is rather high; currently it is at 55.90%. Regardless of HDB's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, HDB's net profit margin of 15.30% is significantly lower than the same period one year prior.
  • HDB has underperformed the S&P 500 Index, declining 9.51% 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.

HDFC Bank Limited provides banking and financial services to individuals and businesses in India. The company offers savings, current, and demat accounts, as well as accepts fixed and recurring deposits. The company has a P/E ratio of 24.2, above the average banking industry P/E ratio of 20.7 and above the S&P 500 P/E ratio of 17.7. HDFC has a market cap of $21 billion and is part of the financial sector and banking industry. Shares are up 6.8% year to date as of the close of trading on Friday.

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

Rating Change #6

Eni SpA ( E) 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 deteriorating net income, disappointing return on equity and poor profit margins.

Highlights from the ratings report include:
  • The current debt-to-equity ratio, 0.56, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.72 is somewhat weak and could be cause for future problems.
  • The gross profit margin for ENI SPA is rather low; currently it is at 24.50%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 6.70% trails that of the industry average.
  • Net operating cash flow has decreased to $2,585.64 million or 42.20% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

Eni SpA, an integrated energy company, engages in the exploration, production, transportation, transformation, and marketing of oil and natural gas. The company has a P/E ratio of 4.2, below the average energy industry P/E ratio of 12.3 and below the S&P 500 P/E ratio of 17.7. Eni SpA has a market cap of $75.02 billion and is part of the basic materials sector and energy industry. Shares are up 0.9% year to date as of the close of trading on Tuesday.

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

Rating Change #5

KB Financial Group Inc ( KB) 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, attractive valuation levels and expanding profit margins. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

Highlights from the ratings report include:
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Commercial Banks industry. The net income increased by 268.6% when compared to the same quarter one year prior, rising from $85.12 million to $313.79 million.
  • KB FINANCIAL GROUP reported significant earnings per share improvement 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, KB FINANCIAL GROUP reported lower earnings of $0.23 versus $1.46 in the prior year. This year, the market expects an improvement in earnings ($6.20 versus $0.23).
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. When compared to other companies in the Commercial Banks industry and the overall market, KB FINANCIAL GROUP's return on equity is below that of both the industry average and the S&P 500.
  • KB's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 41.33%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last 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.

Kookmin Bank Co. Ltd. provides various banking and other financial services to individuals, small- and medium-sized enterprises, and large corporations in Korea. The company has a P/E ratio of 20.5, above the average banking industry P/E ratio of 11.6 and above the S&P 500 P/E ratio of 17.7. KB Financial Group has a market cap of $12.03 billion and is part of the financial sector and banking industry. Shares are down 0.6% year to date as of the close of trading on Tuesday.

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

Rating Change #4

BB&T Corp ( BBT) 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, impressive record of earnings per share growth, attractive valuation levels and increase in stock price during the past year. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:
  • The gross profit margin for BB&T CORP is currently very high, coming in at 76.10%. It has increased significantly from the same period last year. Despite the strong results of the gross profit margin, BBT's net profit margin of 15.00% significantly trails the industry average.
  • Net operating cash flow has significantly increased by 82.65% to $495.00 million when compared to the same quarter last year. Despite an increase in cash flow of 82.65%, BB&T CORP is still growing at a significantly lower rate than the industry average of 1668.91%.
  • BB&T CORP reported significant earnings per share improvement 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, BB&T CORP reported lower earnings of $1.17 versus $1.18 in the prior year. This year, the market expects an improvement in earnings ($1.80 versus $1.17).
  • BBT, with its decline in revenue, underperformed when compared the industry average of 3.4%. Since the same quarter one year prior, revenues fell by 15.0%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

BB&T Corporation operates as a financial holding company for Branch Banking and Trust Company that provides banking and trust services to individuals and businesses. The company has a P/E ratio of 16.4, equal to the average banking industry P/E ratio and below the S&P 500 P/E ratio of 17.7. BB&T has a market cap of $17.98 billion and is part of the financial sector and banking industry. Shares are up 4.9% year to date as of the close of trading on Tuesday.

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

Rating Change #3

Lowe's Companies Inc ( LOW) 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 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:
  • LOW's revenue growth has slightly outpaced the industry average of 3.9%. 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.
  • 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, despite the company's weak earnings results. 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.
  • LOWE'S COMPANIES INC's earnings per share declined by 37.9% 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, LOWE'S COMPANIES INC increased its bottom line by earning $1.42 versus $1.20 in the prior year. This year, the market expects an improvement in earnings ($1.61 versus $1.42).
  • 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. In comparison to the other companies in the Specialty Retail industry and the overall market, LOWE'S COMPANIES INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • Despite currently having a low debt-to-equity ratio of 0.39, 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 0.11 is very low and demonstrates very weak liquidity.

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 19.1, below the average retail industry P/E ratio of 22.7 and above the S&P 500 P/E ratio of 17.7. Lowe's Companies has a market cap of $32.99 billion and is part of the services sector and retail industry. Shares are up 2.8% 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 #2

Apache Corporation ( APA) 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, expanding profit margins, good cash flow from operations and compelling growth 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:
  • APA's revenue growth has slightly outpaced the industry average of 36.2%. Since the same quarter one year prior, revenues rose by 40.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • APACHE CORP has improved earnings per share by 17.9% 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, APACHE CORP turned its bottom line around by earning $8.50 versus -$0.92 in the prior year. This year, the market expects an improvement in earnings ($11.88 versus $8.50).
  • The gross profit margin for APACHE CORP is currently very high, coming in at 77.20%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 23.40% significantly outperformed against the industry average.
  • Net operating cash flow has increased to $2,447.00 million or 42.70% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 29.70%.
  • The net income growth from the same quarter one year ago has 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 28.7% when compared to the same quarter one year prior, rising from $778.27 million to $1,002.00 million.

Apache Corporation, together with its subsidiaries, operates as an independent energy company. It engages in the exploration, development, and production of natural gas, crude oil, and natural gas liquids (NGLs). The company has a P/E ratio of 9.5, equal to the average energy industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Apache has a market cap of $37.27 billion and is part of the basic materials sector and energy industry. Shares are up 9.1% year to date as of the close of trading on Tuesday.

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

Rating Change #1

Teva Pharmaceutical Industries Ltd ( TEVA) 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, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 6.5%. Since the same quarter one year prior, revenues slightly increased by 2.2%. 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.
  • The current debt-to-equity ratio, 0.36, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that TEVA'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.
  • TEVA PHARMACEUTICALS's earnings per share declined by 10.4% 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, TEVA PHARMACEUTICALS increased its bottom line by earning $3.67 versus $2.23 in the prior year. This year, the market expects an improvement in earnings ($4.96 versus $3.67).
  • The gross profit margin for TEVA PHARMACEUTICALS is rather high; currently it is at 58.60%. Regardless of TEVA's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, TEVA's net profit margin of 21.10% compares favorably to the industry average.

Teva Pharmaceutical Industries Limited, a pharmaceutical company, develops, produces, and markets generic drugs; and proprietary branded pharmaceuticals in various therapeutic categories and active pharmaceutical ingredients worldwide. The company has a P/E ratio of 9.3, below the average drugs industry P/E ratio of 13 and below the S&P 500 P/E ratio of 17.7. Teva has a market cap of $41.25 billion and is part of the health care sector and drugs industry. Shares are up 11.2% year to date as of the close of trading on Tuesday.

You can view the full Teva 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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