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 67 U.S. common stocks for week ending January 27, 2012. 53 stocks were upgraded and 14 stocks were downgraded by our stock model.

Rating Change #10

Microsemi Corp ( MSCC) 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 expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:
  • MSCC's revenue growth has slightly outpaced the industry average of 22.7%. Since the same quarter one year prior, revenues rose by 30.7%. 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.
  • MSCC's debt-to-equity ratio of 0.92 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. Despite the fact that MSCC's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.62 is high and demonstrates strong liquidity.
  • 41.90% is the gross profit margin for MICROSEMI CORP which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, MSCC's net profit margin of -18.50% significantly underperformed when compared to the industry average.
  • 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 Semiconductors & Semiconductor Equipment industry and the overall market, MICROSEMI CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The share price of MICROSEMI CORP has not done very well: it is down 16.07% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. 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.

Microsemi Corporation engages in the design, manufacture, and marketing of analog and mixed-signal integrated circuits (IC) and semiconductors primarily in the United States, Europe, and Asia. The company has a P/E ratio of 33, below the average electronics industry P/E ratio of 33.2 and above the S&P 500 P/E ratio of 17.7. Microsemi has a market cap of $1.83 billion and is part of the technology sector and electronics industry. Shares are up 24.3% year to date as of the close of trading on Friday.

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

Rating Change #9

Harsco Corporation ( HSC) 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, disappointing return on equity, poor profit margins, weak operating cash flow and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Machinery industry. The net income has significantly decreased by 80.9% when compared to the same quarter one year ago, falling from -$51.12 million to -$92.47 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 Machinery industry and the overall market, HARSCO CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for HARSCO CORP is rather low; currently it is at 21.60%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -11.70% is significantly below that of the industry average.
  • Net operating cash flow has decreased to $108.67 million or 34.31% 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.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 34.77%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 80.95% compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.

Harsco Corporation provides engineered solutions to industrial customers worldwide. The company operates in four segments: Harsco Infrastructure, Harsco Metals & Minerals, Harsco Rail, and Harsco Industrial. The company has a P/E ratio of 51.9, below the average metals & mining industry P/E ratio of 57.1 and above the S&P 500 P/E ratio of 17.7. Harsco has a market cap of $1.61 billion and is part of the basic materials sector and metals & mining industry. Shares are up 3.1% year to date as of the close of trading on Friday.

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

Rating Change #8

Owens-Illinois Inc ( OI) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally weak debt management, disappointing return on equity, poor profit margins and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Containers & Packaging industry. The net income has significantly decreased by 87.1% when compared to the same quarter one year ago, falling from -$412.00 million to -$771.00 million.
  • The debt-to-equity ratio is very high at 4.81 and currently higher than the industry average, implying that there is very poor management of debt levels within the company. To add to this, OI has a quick ratio of 0.69, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
  • 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 Containers & Packaging industry and the overall market, OWENS-ILLINOIS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for OWENS-ILLINOIS INC is rather low; currently it is at 22.10%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -42.40% is significantly below that of the industry average.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 28.25%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 823.52% compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.

Owens-Illinois, Inc., through its subsidiaries, engages in the manufacture and sale of glass containers primarily in Europe, North America, South America, and the Asia Pacific. The company has a P/E ratio of 21.2, above the S&P 500 P/E ratio of 17.7. Owens-Illinois has a market cap of $3.8 billion and is part of the consumer goods sector and consumer non-durables industry. Shares are up 19.8% year to date as of the close of trading on Thursday.

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

Rating Change #7

Tempur-Pedic International Inc ( TPX) 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 solid stock price performance. 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 greatly exceeded the industry average of 22.7%. Since the same quarter one year prior, revenues rose by 25.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 27.27% and other important driving factors, this stock has surged by 40.64% over the past year, outperforming the rise in the S&P 500 Index during the same period. 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 TEMPUR PEDIC INTL INC is rather high; currently it is at 54.60%. Regardless of TPX's high profit margin, it has managed to decrease from the same period last year.
  • The debt-to-equity ratio is very high at 19.00 and currently higher than the industry average, implying that there is very poor management of debt levels within the company. Even though the debt-to-equity ratio is weak, TPX's quick ratio is somewhat strong at 1.39, demonstrating the ability to handle short-term liquidity needs.

Tempur Pedic International Inc. manufactures, markets, and distributes bedding products in North America and internationally. Its products include pillows, mattresses, and adjustable beds, as well as various cushions and other comfort products. The company has a P/E ratio of 20.2, equal to the average consumer durables industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Tempur-Pedic International has a market cap of $3.99 billion and is part of the consumer goods sector and consumer durables industry. Shares are up 18.5% year to date as of the close of trading on Wednesday.

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

Rating Change #6

Exelon Corp ( EXC) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, increase in net income 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, poor profit margins and feeble growth in the company's earnings per share.

Highlights from the ratings report include:
  • Net operating cash flow has significantly increased by 71.02% to $1,936.00 million when compared to the same quarter last year. In addition, EXELON CORP has also vastly surpassed the industry average cash flow growth rate of -5.21%.
  • The debt-to-equity ratio is somewhat low, currently at 0.93, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.74 is somewhat weak and could be cause for future problems.
  • The gross profit margin for EXELON CORP is currently lower than what is desirable, coming in at 33.20%. Regardless of EXC's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, EXC's net profit margin of 14.30% compares favorably to the industry average.
  • EXC has underperformed the S&P 500 Index, declining 7.39% 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.

Exelon Corporation operates as a utility services holding company in the United States. The company primarily engages in the generation of electricity. It generates electricity from nuclear, fossil, hydroelectric, and renewable energy sources. The company has a P/E ratio of 10.8, equal to the average utilities industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Exelon has a market cap of $26 billion and is part of the utilities sector and utilities industry. Shares are down 7.7% year to date as of the close of trading on Thursday.

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

Rating Change #5

VeriSign Inc ( VRSN) 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, impressive record of earnings per share growth, increase in net income, revenue growth and good cash flow from operations. 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:
  • Despite the fact that VRSN's debt-to-equity ratio is mixed in its results, the company's quick ratio of 2.07 is high and demonstrates strong liquidity.
  • VERISIGN 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, VERISIGN INC increased its bottom line by earning $0.84 versus $0.38 in the prior year. This year, the market expects an improvement in earnings ($1.86 versus $0.84).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Internet Software & Services industry. The net income increased by 232.8% when compared to the same quarter one year prior, rising from -$40.51 million to $53.81 million.
  • VRSN's revenue growth trails the industry average of 25.8%. Since the same quarter one year prior, revenues rose by 13.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Net operating cash flow has significantly increased by 165.82% to $124.21 million when compared to the same quarter last year. In addition, VERISIGN INC has also vastly surpassed the industry average cash flow growth rate of 11.56%.

VeriSign, Inc. provides Internet infrastructure services to various networks worldwide. The company provides domain name registry services and infrastructure assurance services. The company has a P/E ratio of 95.8, below the average computer software & services industry P/E ratio of 101.4 and above the S&P 500 P/E ratio of 17.7. VeriSign has a market cap of $5.81 billion and is part of the technology sector and computer software & services industry. Shares are up 0.6% year to date as of the close of trading on Friday.

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

Rating Change #4

Shaw Communications Inc ( SJR) 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, attractive valuation levels, expanding profit margins and good cash flow from operations. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Media industry. The net income increased by 1053.7% when compared to the same quarter one year prior, rising from $16.64 million to $192.00 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 20.6%. Since the same quarter one year prior, revenues rose by 17.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 41.40% is the gross profit margin for SHAW COMMUNICATIONS INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 14.70% is above that of the industry average.
  • Net operating cash flow has significantly increased by 397.68% to $308.00 million when compared to the same quarter last year. In addition, SHAW COMMUNICATIONS INC has also vastly surpassed the industry average cash flow growth rate of 14.06%.

Shaw Communications Inc., a diversified communications company, provides broadband cable television, Internet, digital phone, telecommunications, and satellite direct-to-home (DTH) services primarily in Canada and the United States. The company has a P/E ratio of 15.5, above the average media industry P/E ratio of 13.8 and below the S&P 500 P/E ratio of 17.7. Shaw has a market cap of $8.21 billion and is part of the services sector and media industry. Shares are down 0.3% year to date as of the close of trading on Tuesday.

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

Rating Change #3

Life Technologies Corp ( LIFE) 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, 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:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 15.6%. 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.
  • LIFE TECHNOLOGIES CORP's earnings per share declined by 7.1% 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, LIFE TECHNOLOGIES CORP increased its bottom line by earning $1.99 versus $0.79 in the prior year. This year, the market expects an improvement in earnings ($3.70 versus $1.99).
  • The gross profit margin for LIFE TECHNOLOGIES CORP is rather high; currently it is at 69.30%. Regardless of LIFE'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 10.40% trails the industry average.
  • Despite currently having a low debt-to-equity ratio of 0.60, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.90 is weak.
  • 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 Life Sciences Tools & Services industry and the overall market, LIFE TECHNOLOGIES CORP's return on equity is below that of both the industry average and the S&P 500.

Life Technologies Corporation operates as a life sciences company with a focus on improving the human condition worldwide. The company has a P/E ratio of 24.8, equal to the average health services industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Life has a market cap of $8.43 billion and is part of the health care sector and health services industry. Shares are up 26.2% year to date as of the close of trading on Thursday.

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

Rating Change #2

Symantec Corp ( SYMC) 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, compelling growth in net income, attractive valuation levels, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • SYMC's revenue growth has slightly outpaced the industry average of 2.5%. Since the same quarter one year prior, revenues slightly increased by 6.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Software industry. The net income increased by 81.8% when compared to the same quarter one year prior, rising from $132.00 million to $240.00 million.
  • The gross profit margin for SYMANTEC CORP is currently very high, coming in at 89.40%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, SYMC's net profit margin of 14.00% significantly trails 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 Software industry and the overall market on the basis of return on equity, SYMANTEC CORP has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.

Symantec Corporation provides security, storage, and systems management solutions internationally. The company's Consumer segment delivers Internet security, PC tune-up, and online backup solutions and services to individual users and home offices. The company has a P/E ratio of 19.2, equal to the average computer software & services industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Symantec has a market cap of $12.44 billion and is part of the technology sector and computer software & services industry. Shares are up 9.1% year to date as of the close of trading on Thursday.

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

Rating Change #1

YPF Sociedad Anonima ( YPF) 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, attractive valuation levels, good cash flow from operations, 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 lackluster performance in the stock itself.

Highlights from the ratings report include:
  • YPF's revenue growth trails the industry average of 35.2%. Since the same quarter one year prior, revenues rose by 23.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Net operating cash flow has significantly increased by 65.11% to $1,089.11 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 25.37%.
  • The current debt-to-equity ratio, 0.51, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that YPF's debt-to-equity ratio is low, the quick ratio, which is currently 0.51, displays a potential problem in covering short-term cash needs.
  • 36.00% is the gross profit margin for YACIMIENTOS PETE FISCALES SA which we consider to be strong. Regardless of YPF's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, YPF's net profit margin of 11.50% compares favorably to the industry average.

YPF SOCIEDAD ANONIMA, an energy company, engages in the exploration, development, and production of crude oil, natural gas, and liquefied petroleum gas (LPG) in Argentina. The company has a P/E ratio of 10.9, below the average energy industry P/E ratio of 36.3 and below the S&P 500 P/E ratio of 17.7. YPF Sociedad Anonima has a market cap of $15.89 billion and is part of the basic materials sector and energy industry. Shares are up 17% year to date as of the close of trading on Thursday.

You can view the full YPF Sociedad Anonima 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.