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 108 U.S. common stocks for week ending February 24, 2012. 86 stocks were upgraded and 22 stocks were downgraded by our stock model.

Rating Change #10

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

Highlights from the ratings report include:
  • Net operating cash flow has significantly increased by 93.91% to -$1.78 million when compared to the same quarter last year. Despite an increase in cash flow, INTERDIGITAL INC's cash flow growth rate is still lower than the industry average growth rate of 108.45%.
  • The gross profit margin for INTERDIGITAL INC is currently very high, coming in at 100.00%. IDCC has managed to maintain the strong profit margin since the same quarter of last year. Despite the mixed results of the gross profit margin, IDCC's net profit margin of 29.60% compares favorably to the industry average.
  • The revenue fell significantly faster than the industry average of 17.3%. Since the same quarter one year prior, revenues fell by 19.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • INTERDIGITAL INC's earnings per share declined by 35.5% 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, INTERDIGITAL INC reported lower earnings of $1.94 versus $3.43 in the prior year. For the next year, the market is expecting a contraction of 22.2% in earnings ($1.51 versus $1.94).
  • 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 33.6% when compared to the same quarter one year ago, falling from $34.31 million to $22.77 million.
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Interdigital, Inc. engages in the design and development of digital wireless technology solutions. The company offers technology solutions for use in digital cellular and wireless products and networks, including 2G, 3G, 4G, and IEEE 802-related products and networks. The company has a P/E ratio of 17.5, above the average telecommunications industry P/E ratio of 16.2 and below the S&P 500 P/E ratio of 17.7. InterDigital has a market cap of $1.63 billion and is part of the technology sector and telecommunications industry. Shares are down 6.7% year to date as of the close of trading on Friday.

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

Rating Change #9

R.R. Donnelley & Sons Company ( RRD) 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 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:
  • RRD's revenue growth has slightly outpaced the industry average of 1.8%. Since the same quarter one year prior, revenues slightly increased by 0.5%. 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 significantly increased by 74.83% to $474.50 million when compared to the same quarter last year. In addition, DONNELLEY (R R) & SONS CO has also vastly surpassed the industry average cash flow growth rate of -2.80%.
  • DONNELLEY (R R) & SONS CO 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. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, DONNELLEY (R R) & SONS CO swung to a loss, reporting -$0.73 versus $1.05 in the prior year. This year, the market expects an improvement in earnings ($1.83 versus -$0.73).
  • The gross profit margin for DONNELLEY (R R) & SONS CO is rather low; currently it is at 22.90%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -12.00% 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 Commercial Services & Supplies industry. The net income has significantly decreased by 1310.0% when compared to the same quarter one year ago, falling from $27.00 million to -$326.70 million.
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R.R. Donnelley & Sons Company provides pre-media, printing, logistics, and business process outsourcing products and services to private and public sectors worldwide. The company has a P/E ratio of 11.5, above the average diversified services industry P/E ratio of 10.3 and below the S&P 500 P/E ratio of 17.7. R.R. Donnelley & Sons has a market cap of $2.29 billion and is part of the services sector and diversified services industry. Shares are down 9.8% year to date as of the close of trading on Thursday.

You can view the full R.R. Donnelley & Sons Ratings Report or get investment ideas from our investment research center.

Rating Change #8

Berry Petroleum Co ( BRY) 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, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally poor debt management and disappointing return on equity.

Highlights from the ratings report include:
  • BRY's revenue growth has slightly outpaced the industry average of 25.1%. Since the same quarter one year prior, revenues rose by 33.7%. 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.
  • Net operating cash flow has significantly increased by 72.44% to $84.01 million when compared to the same quarter last year. In addition, BERRY PETROLEUM has also vastly surpassed the industry average cash flow growth rate of -18.34%.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Looking ahead, our view is that this company's fundamentals will not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.
  • Currently the debt-to-equity ratio of 1.64 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated.
  • 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 Oil, Gas & Consumable Fuels industry and the overall market, BERRY PETROLEUM's return on equity significantly trails that of both the industry average and the S&P 500.
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Berry Petroleum Company, an independent energy company, engages in the acquisition, exploitation, exploration, production, and development of crude oil and natural gas in the United States. Its properties are located in California, Texas, Utah, and Colorado. The company has a P/E ratio of 110.4, above the average energy industry P/E ratio of 13.7 and above the S&P 500 P/E ratio of 17.7. Berry has a market cap of $2.38 billion and is part of the basic materials sector and energy industry. Shares are up 25.7% year to date as of the close of trading on Friday.

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

Rating Change #7

Kinross Gold Corporation ( KGC) 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 and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • KINROSS GOLD CORP 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. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, KINROSS GOLD CORP swung to a loss, reporting -$1.82 versus $0.93 in the prior year.
  • 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 Metals & Mining industry. The net income has significantly decreased by 1423.7% when compared to the same quarter one year ago, falling from $210.30 million to -$2,783.70 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 Metals & Mining industry and the overall market, KINROSS GOLD CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 31.03%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 1461.11% compared to 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.
  • The gross profit margin for KINROSS GOLD CORP is rather high; currently it is at 55.00%. Regardless of KGC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, KGC's net profit margin of -293.20% significantly underperformed when compared to the industry average.
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Kinross Gold Corporation, together with its subsidiaries, engages in mining and processing gold ores. It is also involved in the exploration and acquisition of gold bearing properties. The company has a P/E ratio of 25.5, above the average metals & mining industry P/E ratio of 13.4 and above the S&P 500 P/E ratio of 17.7. Kinross has a market cap of $12.04 billion and is part of the basic materials sector and metals & mining industry. Shares are down 0.4% year to date as of the close of trading on Wednesday.

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

Rating Change #6

Chesapeake Energy Corp ( CHK) 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, attractive valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, a generally disappointing performance in the stock itself and feeble growth in the company's earnings per share.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 25.0%. Since the same quarter one year prior, revenues rose by 38.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • CHK's debt-to-equity ratio of 0.64 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.
  • CHK has underperformed the S&P 500 Index, declining 19.10% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • The 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 Oil, Gas & Consumable Fuels industry and the overall market, CHESAPEAKE ENERGY CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.
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Chesapeake Energy Corporation engages in the acquisition, development, exploration, and production of natural gas and oil properties in the United States. It also provides marketing and other midstream services. The company has a P/E ratio of 12.6, above the average energy industry P/E ratio of 12.1 and below the S&P 500 P/E ratio of 17.7. Chesapeake Energy has a market cap of $14.83 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 Wednesday.

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

Rating Change #5

Plains Exploration & Production Company ( PXP) 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, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • PXP's revenue growth has slightly outpaced the industry average of 25.1%. Since the same quarter one year prior, revenues rose by 26.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • PLAINS EXPLORATION & PROD CO 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, PLAINS EXPLORATION & PROD CO increased its bottom line by earning $1.43 versus $0.72 in the prior year. This year, the market expects an improvement in earnings ($3.35 versus $1.43).
  • 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 601.4% when compared to the same quarter one year prior, rising from -$19.49 million to $97.70 million.
  • The gross profit margin for PLAINS EXPLORATION & PROD CO is rather high; currently it is at 68.90%. Regardless of PXP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, PXP's net profit margin of 18.90% significantly outperformed against the industry.
  • 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, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
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Plains Exploration & Production Company, an independent oil and gas company, primarily engages in acquiring, developing, exploring, and producing oil and gas in California and Louisiana. The company has a P/E ratio of 72.6, above the average energy industry P/E ratio of 62.1 and above the S&P 500 P/E ratio of 17.7. Plains Exploration & Production has a market cap of $5.25 billion and is part of the basic materials sector and energy industry. Shares are up 23.9% year to date as of the close of trading on Friday.

You can view the full Plains Exploration & Production Ratings Report or get investment ideas from our investment research center.

Rating Change #4

AEGON/Transamerica ( AEG) 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, 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 came in higher than the industry average of 7.0%. Since the same quarter one year prior, revenues rose by 17.6%. 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.
  • Net operating cash flow has significantly increased by 120.84% to $525.59 million when compared to the same quarter last year. In addition, AEGON NV has also vastly surpassed the industry average cash flow growth rate of -13.96%.
  • AEGON NV 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. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, AEGON NV swung to a loss, reporting -$0.08 versus $0.98 in the prior year. This year, the market expects an improvement in earnings ($0.43 versus -$0.08).
  • Despite currently having a low debt-to-equity ratio of 0.40, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 31.08%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 57.14% compared to the year-earlier quarter. Looking ahead, the stock's sharp decline over the past year may have been what was needed in order to bring its value into alignment with its fundamentals and others in its industry.
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AEGON N.V. provides life insurance, pensions, and asset management products and services worldwide. The company has a P/E ratio of 2.6, below the average insurance industry P/E ratio of 5.4 and below the S&P 500 P/E ratio of 17.7. AEGON/Transamerica has a market cap of $8.56 billion and is part of the financial sector and insurance industry. Shares are up 31.8% year to date as of the close of trading on Wednesday.

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

Rating Change #3

Charles Schwab Corp ( SCHW) 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, notable return on equity and impressive record of earnings per share growth. 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 exceeded that of the S&P 500 and greatly outperformed compared to the Capital Markets industry average. The net income increased by 37.0% when compared to the same quarter one year prior, rising from $119.00 million to $163.00 million.
  • 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 Capital Markets industry and the overall market on the basis of return on equity, SCHWAB (CHARLES) CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • Despite the weak revenue results, SCHW has significantly outperformed against the industry average of 42.9%. Since the same quarter one year prior, revenues slightly dropped by 2.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • SCHWAB (CHARLES) CORP has improved earnings per share by 30.0% 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. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, SCHWAB (CHARLES) CORP increased its bottom line by earning $0.71 versus $0.37 in the prior year. For the next year, the market is expecting a contraction of 4.2% in earnings ($0.68 versus $0.71).
  • SCHW'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 34.04%, 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 is one of the factors that makes this stock an attractive investment.
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The Charles Schwab Corporation, through its subsidiaries, provides securities brokerage, banking, and related financial services to individuals and institutional clients. The company has a P/E ratio of 16.9, below the average financial services industry P/E ratio of 17.8 and below the S&P 500 P/E ratio of 17.7. Charles Schwab has a market cap of $15.84 billion and is part of the financial sector and financial services industry. Shares are up 13.9% year to date as of the close of trading on Wednesday.

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

Rating Change #2

Seadrill Ltd ( SDRL) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its notable return on equity, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, generally poor debt management and feeble growth in the company's earnings per share.

Highlights from the ratings report include:
  • 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 Energy Equipment & Services industry and the overall market, SEADRILL LTD's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly increased by 60.68% to $627.00 million when compared to the same quarter last year. In addition, SEADRILL LTD has also vastly surpassed the industry average cash flow growth rate of -9.88%.
  • 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. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • 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 Energy Equipment & Services industry. The net income has significantly decreased by 90.0% when compared to the same quarter one year ago, falling from $351.80 million to $35.00 million.
  • Currently the debt-to-equity ratio of 1.53 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. To add to this, SDRL has a quick ratio of 0.65, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
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Seadrill Limited, an offshore drilling contractor, provides offshore drilling services to the oil and gas industries worldwide. It also offers platform drilling, well intervention, and engineering services. The company has a P/E ratio of 14.5, above the average energy industry P/E ratio of 11.7 and below the S&P 500 P/E ratio of 17.7. Seadrill has a market cap of $16.69 billion and is part of the basic materials sector and energy industry. Shares are up 20.7% year to date as of the close of trading on Thursday.

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

Rating Change #1

Mobile Telesystems OJSC ( MBT) 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, notable return on equity, good cash flow from operations 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:
  • MBT's revenue growth has slightly outpaced the industry average of 11.9%. Since the same quarter one year prior, revenues rose by 12.5%. 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 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 Wireless Telecommunication Services industry and the overall market, MOBILE TELESYSTEMS OJSC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has increased to $1,319.22 million or 24.78% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -11.93%.
  • The gross profit margin for MOBILE TELESYSTEMS OJSC is rather high; currently it is at 69.50%. Regardless of MBT's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, MBT's net profit margin of 11.00% is significantly lower than the same period one year prior.
  • MOBILE TELESYSTEMS OJSC's earnings per share declined by 28.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, MOBILE TELESYSTEMS OJSC increased its bottom line by earning $1.44 versus $1.08 in the prior year. For the next year, the market is expecting a contraction of 0.3% in earnings ($1.44 versus $1.44).
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Mobile TeleSystems OJSC, together with its subsidiaries, provides telecommunications services primarily in the Russian Federation, Ukraine, Uzbekistan, Turkmenistan, Armenia, and Belarus. The company has a P/E ratio of 17.7, above the average telecommunications industry P/E ratio of 13.2 and equal to the S&P 500 P/E ratio of 17.7. Mobile Telesystems OJSC has a market cap of $15.64 billion and is part of the technology sector and telecommunications industry. Shares are up 22.5% year to date as of the close of trading on Friday.

You can view the full Mobile Telesystems OJSC 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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