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 70 U.S. common stocks for week ending January 20, 2012. 59 stocks were upgraded and 11 stocks were downgraded by our stock model.

Rating Change #10

Nutraceutical International Corporation ( NUTR) 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, 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 a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 10.9%. Since the same quarter one year prior, revenues slightly increased by 7.0%. 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 slightly increased to $4.99 million or 9.78% when compared to the same quarter last year. Despite an increase in cash flow of 9.78%, NUTRACEUTICAL INTL CORP is still growing at a significantly lower rate than the industry average of 86.42%.
  • 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 Personal Products industry. The net income has decreased by 7.6% when compared to the same quarter one year ago, dropping from $3.54 million to $3.27 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. In comparison to the other companies in the Personal Products industry and the overall market, NUTRACEUTICAL INTL CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.

Nutraceutical International Corporation manufactures, markets, distributes, and retails branded nutritional supplements and other natural products. The company has a P/E ratio of 7.8, above the average drugs industry P/E ratio of 7.6 and below the S&P 500 P/E ratio of 17.7. Nutraceutical International has a market cap of $114.9 million and is part of the health care sector and drugs industry. Shares are up 4.6% year to date as of the close of trading on Friday.

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

Rating Change #9

Hugoton Royalty Trust ( HGT) 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, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and disappointing return on equity.

Highlights from the ratings report include:
  • The revenue growth significantly trails the industry average of 36.0%. Since the same quarter one year prior, revenues slightly increased by 5.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • HGT 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 23.05, which clearly demonstrates the ability to cover short-term cash needs.
  • HUGOTON ROYALTY TRUST has improved earnings per share by 8.3% 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 year. During the past fiscal year, HUGOTON ROYALTY TRUST increased its bottom line by earning $1.55 versus $0.73 in the prior year.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to other companies in the Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, HUGOTON ROYALTY TRUST has underperformed in comparison with the industry average, but has greatly exceeded that of the S&P 500.
  • HGT'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 35.16%, 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. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.

Hugoton Royalty Trust operates as an express trust in the United States. It holds an 80% net profits interests in certain natural gas producing working interest properties of XTO Energy Inc. XTO Energy Inc. engages in the production and sale of oil and gas. XTO Energy Inc. The company has a P/E ratio of 9.5, below the average energy industry P/E ratio of 10.7 and below the S&P 500 P/E ratio of 17.7. Hugoton Royalty has a market cap of $586.8 million and is part of the basic materials sector and energy industry. Shares are down 24.4% year to date as of the close of trading on Thursday.

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

Rating Change #8

Cubist Pharmaceuticals Inc ( CBST) 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, expanding profit margins and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and feeble growth in the company's earnings per share.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 0.8%. Since the same quarter one year prior, revenues rose by 31.6%. 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 CUBIST PHARMACEUTICALS INC is currently very high, coming in at 77.00%. Regardless of CBST's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CBST's net profit margin of 3.20% is significantly lower than the same period one year prior.
  • Compared to its closing price of one year ago, CBST's share price has jumped by 90.11%, exceeding the performance of the broader market during that same time frame. Looking ahead, however, we cannot assume that the stock's past performance is going to drive future results. Quite to the contrary, its sharp appreciation over the last year is one of the factors that should prompt investors to seek better opportunities elsewhere.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Biotechnology industry. The net income has significantly decreased by 53.1% when compared to the same quarter one year ago, falling from $14.55 million to $6.82 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 Biotechnology industry and the overall market on the basis of return on equity, CUBIST PHARMACEUTICALS INC underperformed against that of the industry average and is significantly less than that of the S&P 500.

Cubist Pharmaceuticals, Inc., a biopharmaceutical company, focuses on the research, development, and commercialization of pharmaceutical products that address unmet medical needs in the acute care environment. The company has a P/E ratio of 61.2, below the average drugs industry P/E ratio of 69.5 and above the S&P 500 P/E ratio of 17.7. Cubist has a market cap of $2.53 billion and is part of the health care sector and drugs industry. Shares are up 3.5% year to date as of the close of trading on Friday.

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

Rating Change #7

New Oriental Education & Technology Group ( EDU) 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 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 came in higher than the industry average of 16.3%. Since the same quarter one year prior, revenues rose by 38.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • EDU 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. To add to this, EDU has a quick ratio of 2.40, which demonstrates the ability of the company to cover short-term liquidity needs.
  • 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 Consumer Services industry and the overall market on the basis of return on equity, NEW ORIENTAL ED & TECH has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • EDU has underperformed the S&P 500 Index, declining 16.97% 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.

New Oriental Education & Technology Group Inc. provides private educational services primarily in China. The company has a P/E ratio of 30, below the average diversified services industry P/E ratio of 30.4 and above the S&P 500 P/E ratio of 17.7. New Oriental Education & Technology Group I has a market cap of $3.99 billion and is part of the services sector and diversified services industry. Shares are down 7% year to date as of the close of trading on Wednesday.

You can view the full New Oriental Education & Technology Group I Ratings Report or get investment ideas from our investment research center.

Rating Change #6

Southwestern Energy Company ( SWN) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, revenue growth and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and disappointing return on equity.

Highlights from the ratings report include:
  • SOUTHWESTERN ENERGY CO has improved earnings per share by 8.7% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, SOUTHWESTERN ENERGY CO turned its bottom line around by earning $1.73 versus -$0.12 in the prior year. This year, the market expects an improvement in earnings ($1.85 versus $1.73).
  • SWN's revenue growth trails the industry average of 35.9%. Since the same quarter one year prior, revenues rose by 12.5%. 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 slightly increased to $443.28 million or 9.18% when compared to the same quarter last year. Despite an increase in cash flow, SOUTHWESTERN ENERGY CO's cash flow growth rate is still lower than the industry average growth rate of 29.18%.
  • 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 Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, SOUTHWESTERN ENERGY CO has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • SWN'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 25.38%, 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. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, SWN is still more expensive than most of the other companies in its industry.

Southwestern Energy Company, an independent energy company, engages in the exploration, development, and production of natural gas and crude oil in the United States. The company operates through two segments, Exploration and Production, and Midstream Services. The company has a P/E ratio of 16.5, above the average energy industry P/E ratio of 16.3 and below the S&P 500 P/E ratio of 17.7. Southwestern Energy has a market cap of $10.25 billion and is part of the basic materials sector and energy industry. Shares are down 9% year to date as of the close of trading on Friday.

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

Rating Change #5

Weatherford International Ltd ( WFT) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, robust revenue growth, impressive record of earnings per share growth, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Energy Equipment & Services industry. The net income increased by 101.1% when compared to the same quarter one year prior, rising from $94.65 million to $190.36 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 41.6%. Since the same quarter one year prior, revenues rose by 33.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • WEATHERFORD INTERNATIONAL 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, WEATHERFORD INTERNATIONAL swung to a loss, reporting -$0.14 versus $0.24 in the prior year. This year, the market expects an improvement in earnings ($0.86 versus -$0.14).
  • 35.10% is the gross profit margin for WEATHERFORD INTERNATIONAL which we consider to be strong. Regardless of WFT'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 5.60% trails the industry average.
  • WFT's debt-to-equity ratio of 0.77 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 0.86 is weak.

Weatherford International Ltd. provides equipment and services used in the drilling, evaluation, completion, production, and intervention of oil and natural gas wells to independent oil and natural gas producing companies worldwide. The company has a P/E ratio of 43.6, below the average energy industry P/E ratio of 66.3 and above the S&P 500 P/E ratio of 17.7. Weatherford International has a market cap of $11.66 billion and is part of the basic materials sector and energy industry. Shares are up 10.5% year to date as of the close of trading on Thursday.

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

Rating Change #4

Valero Energy Corporation ( VLO) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, compelling growth in net income, attractive valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • VLO's very impressive revenue growth exceeded the industry average of 36.0%. Since the same quarter one year prior, revenues leaped by 61.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • VALERO ENERGY CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, VALERO ENERGY CORP turned its bottom line around by earning $1.63 versus -$0.45 in the prior year. This year, the market expects an improvement in earnings ($3.50 versus $1.63).
  • 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 312.0% when compared to the same quarter one year prior, rising from $292.00 million to $1,203.00 million.
  • Net operating cash flow has significantly increased by 61.26% to $1,374.00 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 29.21%.

Valero Energy Corporation operates as an independent petroleum refining and marketing company. The company operates through three segments: Refining, Retail, and Ethanol. The company has a P/E ratio of 5.6, below the average energy industry P/E ratio of 7.5 and below the S&P 500 P/E ratio of 17.7. Valero Energy has a market cap of $11.77 billion and is part of the basic materials sector and energy industry. Shares are up 9.5% year to date as of the close of trading on Thursday.

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

Rating Change #3

Applied Materials Inc ( AMAT) 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, good cash flow from operations, notable return on equity 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:
  • Although AMAT's debt-to-equity ratio of 0.22 is very low, it is currently higher than that of the industry average. Along with this, the company maintains a quick ratio of 2.78, which clearly demonstrates the ability to cover short-term cash needs.
  • 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 Semiconductors & Semiconductor Equipment industry and the overall market on the basis of return on equity, APPLIED MATERIALS INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • Net operating cash flow has increased to $698.00 million or 32.92% when compared to the same quarter last year. Despite an increase in cash flow, APPLIED MATERIALS INC's cash flow growth rate is still lower than the industry average growth rate of 58.32%.
  • 41.70% is the gross profit margin for APPLIED MATERIALS INC which we consider to be strong. Regardless of AMAT'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 20.90% trails the industry average.

Applied Materials, Inc. provides manufacturing equipment, services, and software to the semiconductor, flat panel display, solar photovoltaic (PV), and related industries worldwide. The company has a P/E ratio of 7.9, equal to the average electronics industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Applied has a market cap of $15.01 billion and is part of the technology sector and electronics industry. Shares are up 9.9% year to date as of the close of trading on Wednesday.

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

Rating Change #2

State Street Corp ( STT) 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, impressive record of earnings per share growth, compelling growth in net income, attractive valuation levels and expanding profit margins. 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 revenue growth greatly exceeded the industry average of 30.2%. Since the same quarter one year prior, revenues rose by 11.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • STATE STREET CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, STATE STREET CORP increased its bottom line by earning $3.79 versus $3.08 in the prior year. This year, the market expects an improvement in earnings ($4.00 versus $3.79).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Capital Markets industry. The net income increased by 359.0% when compared to the same quarter one year prior, rising from $83.00 million to $381.00 million.
  • The gross profit margin for STATE STREET CORP is currently very high, coming in at 93.60%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 15.40% is above that of the industry average.

State Street Corporation, through its subsidiaries, provides various financial services and products to the institutional investors worldwide. The company has a P/E ratio of 13.4, equal to the average banking industry P/E ratio and below the S&P 500 P/E ratio of 17.7. State Street has a market cap of $21.12 billion and is part of the financial sector and banking industry. Shares are down 0.9% year to date as of the close of trading on Thursday.

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

Rating Change #1

HDFC Bank Ltd ( HDB) 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, notable return on equity, impressive record of earnings per share growth, expanding profit margins and compelling growth in net income. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 2.5%. 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.
  • HDFC BANK LTD has improved earnings per share by 38.4% 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, HDFC BANK LTD increased its bottom line by earning $1.15 versus $0.91 in the prior year. This year, the market expects an improvement in earnings ($1.23 versus $1.15).
  • 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.
  • 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 39.1% when compared to the same quarter one year prior, rising from $174.90 million to $243.33 million.

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 24.4, above the average banking industry P/E ratio of 21.8 and above the S&P 500 P/E ratio of 17.7. HDFC has a market cap of $22.11 billion and is part of the financial sector and banking industry. Shares are up 11.8% year to date as of the close of trading on Thursday.

You can view the full HDFC 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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