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 44 U.S. common stocks for week ending March 30, 2012. 29 stocks were upgraded and 15 stocks were downgraded by our stock model.

Rating Change #10

Mitek Systems Inc ( MITK) 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 compelling growth in net income. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.

Highlights from the ratings report include:
  • MITK's very impressive revenue growth greatly exceeded the industry average of 1.3%. Since the same quarter one year prior, revenues leaped by 150.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • MITK 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 8.39, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for MITEK SYSTEMS INC is currently very high, coming in at 93.10%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, MITK's net profit margin of 0.70% significantly trails the industry average.
  • Powered by its strong earnings growth of 100.00% and other important driving factors, this stock has surged by 85.33% over the past year, outperforming the rise in the S&P 500 Index during the same period. 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'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 Software industry and the overall market, MITEK SYSTEMS INC's return on equity significantly trails that of both the industry average and the S&P 500.
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Mitek Systems, Inc. engages in the development, sale, and service of software solutions related to mobile imaging solutions and intelligent character recognition software. The company has a P/E ratio of 312.3, above the S&P 500 P/E ratio of 17.7. Mitek Systems has a market cap of $219.2 million and is part of the technology sector and computer software & services industry. Shares are up 15% year to date as of the close of trading on Wednesday.

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

Rating Change #9

Pike Electric Corporation ( PIKE) 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, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and poor profit margins.

Highlights from the ratings report include:
  • PIKE's revenue growth has slightly outpaced the industry average of 9.1%. Since the same quarter one year prior, revenues rose by 15.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • PIKE ELECTRIC 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. This trend suggests that the performance of the business is improving. During the past fiscal year, PIKE ELECTRIC CORP turned its bottom line around by earning $0.04 versus -$0.40 in the prior year. This year, the market expects an improvement in earnings ($0.42 versus $0.04).
  • Despite currently having a low debt-to-equity ratio of 0.42, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that PIKE's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.95 is high and demonstrates strong liquidity.
  • The gross profit margin for PIKE ELECTRIC CORP is rather low; currently it is at 20.40%. Regardless of PIKE's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, PIKE's net profit margin of 2.80% compares favorably to the industry average.
  • PIKE has underperformed the S&P 500 Index, declining 16.57% from its price level of one year ago. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
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Pike Electric Corporation provides energy solutions for investor-owned, municipal, and co-operative utilities in the United States. The company has a P/E ratio of 28.3, below the average materials & construction industry P/E ratio of 44.2 and above the S&P 500 P/E ratio of 17.7. Pike Electric has a market cap of $276.5 million and is part of the industrial goods sector and materials & construction industry. Shares are up 10% year to date as of the close of trading on Thursday.

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

Rating Change #8

Blue Nile Inc ( NILE) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its notable return on equity and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and weak operating cash flow.

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. When compared to other companies in the Internet & Catalog Retail industry and the overall market, BLUE NILE INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • NILE's debt-to-equity ratio is very low at 0.02 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.90 is somewhat weak and could be cause for future problems.
  • NILE, with its decline in revenue, underperformed when compared the industry average of 24.9%. Since the same quarter one year prior, revenues slightly dropped by 2.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • BLUE NILE INC's earnings per share declined by 26.8% 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, BLUE NILE INC reported lower earnings of $0.78 versus $0.95 in the prior year. For the next year, the market is expecting a contraction of 3.8% in earnings ($0.75 versus $0.78).
  • 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 Internet & Catalog Retail industry. The net income has significantly decreased by 31.7% when compared to the same quarter one year ago, falling from $6.18 million to $4.22 million.
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Blue Nile, Inc. operates as an online retailer of diamonds and fine jewelry worldwide. Its fine jewelry selection includes diamond, gemstone, platinum, gold, pearl and sterling silver jewelry, and accessories, as well as wedding bands, earrings, necklaces, pendants, bracelets, and watches. The company has a P/E ratio of 41.4, below the average specialty retail industry P/E ratio of 42.6 and above the S&P 500 P/E ratio of 17.7. Blue Nile has a market cap of $513.8 million and is part of the services sector and specialty retail industry. Shares are down 22.1% year to date as of the close of trading on Wednesday.

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

Rating Change #7

Colony Financial Inc ( CLNY) 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 find that the stock has had a generally disappointing performance in the past year.

Highlights from the ratings report include:
  • CLNY's very impressive revenue growth greatly exceeded the industry average of 17.2%. Since the same quarter one year prior, revenues leaped by 82.2%. 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.
  • CLNY's debt-to-equity ratio is very low at 0.14 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
  • COLONY FINANCIAL INC's earnings per share declined by 24.4% 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, COLONY FINANCIAL INC increased its bottom line by earning $1.48 versus $1.18 in the prior year. This year, the market expects an improvement in earnings ($1.83 versus $1.48).
  • 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. When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, COLONY FINANCIAL INC's return on equity is below that of both the industry average and the S&P 500.
  • Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, CLNY has underperformed the S&P 500 Index, declining 11.56% 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.
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Colony Financial, Inc., a real estate finance company, focuses on acquiring, originating, and managing commercial mortgage loans and other commercial real estate-related debt investments. The company qualifies as a real estate investment trust for federal income tax purposes. The company has a P/E ratio of 11.6, above the average real estate industry P/E ratio of 10.6 and below the S&P 500 P/E ratio of 17.7. Colony Financial has a market cap of $547.5 million and is part of the financial sector and real estate industry. Shares are up 4.7% year to date as of the close of trading on Wednesday.

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

Rating Change #6

Telephone And Data Systems Inc ( TDS) 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 unimpressive growth in net income, weak operating cash flow 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 11.0%. Since the same quarter one year prior, revenues slightly increased by 4.0%. 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.
  • 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. Despite the fact that TDS's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.64 is high and demonstrates strong liquidity.
  • The gross profit margin for TELEPHONE & DATA SYSTEMS INC is rather high; currently it is at 57.60%. Regardless of TDS's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, TDS's net profit margin of -0.50% significantly underperformed when compared to the industry average.
  • Net operating cash flow has decreased to $282.45 million or 20.92% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, TELEPHONE & DATA SYSTEMS INC has marginally lower results.
  • 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 Wireless Telecommunication Services industry. The net income has significantly decreased by 147.1% when compared to the same quarter one year ago, falling from $13.14 million to -$6.19 million.
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Telephone and Data Systems, Inc., a diversified telecommunications service company, provides wireless and wireline telecommunications services in the United States. The company has a P/E ratio of 12.6, below the average telecommunications industry P/E ratio of 14 and below the S&P 500 P/E ratio of 17.7. Telephone and Data Systems has a market cap of $1.46 billion and is part of the technology sector and telecommunications industry. Shares are down 10% year to date as of the close of trading on Wednesday.

You can view the full Telephone and Data Systems Ratings Report or get investment ideas from our investment research center.

Rating Change #5

Primerica Inc ( PRI) 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 and increase in stock price during the past year. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • PRI's debt-to-equity ratio is very low at 0.21 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
  • Net operating cash flow has significantly increased by 90.20% to $80.47 million when compared to the same quarter last year. In addition, PRIMERICA INC has also vastly surpassed the industry average cash flow growth rate of 10.56%.
  • After a year of stock price fluctuations, the net result is that PRI's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. 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.
  • PRIMERICA INC's earnings per share declined by 17.4% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, PRIMERICA INC reported lower earnings of $2.36 versus $3.39 in the prior year. This year, the market expects an improvement in earnings ($2.60 versus $2.36).
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Primerica, Inc., together with its subsidiaries, engages in the distribution of financial products on behalf of third parties to middle income households in the United States and Canada. The company has a P/E ratio of 10.7, above the average insurance industry P/E ratio of 10 and below the S&P 500 P/E ratio of 17.7. Primerica has a market cap of $1.84 billion and is part of the financial sector and insurance industry. Shares are up 10.6% year to date as of the close of trading on Tuesday.

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

Rating Change #4

Tam SA ( TAM) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance and good cash flow from operations. 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:
  • 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.
  • Net operating cash flow has significantly increased by 103.32% to $287.23 million when compared to the same quarter last year. Despite an increase in cash flow of 103.32%, TAM SA is still growing at a significantly lower rate than the industry average of 2788.00%.
  • TAM, with its decline in revenue, slightly underperformed the industry average of 2.8%. Since the same quarter one year prior, revenues slightly dropped by 7.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • 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 Airlines industry and the overall market, TAM SA's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for TAM SA is currently lower than what is desirable, coming in at 32.10%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 2.80% trails that of the industry average.
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TAM S.A. provides passengers and cargo air transportation services in Brazil and internationally. It also engages in the aircraft acquisition, financing, and debt issuance activities. The company has a P/E ratio of 15.4, below the S&P 500 P/E ratio of 17.7. Tam has a market cap of $3.35 billion and is part of the services sector and transportation industry. Shares are up 30% year to date as of the close of trading on Tuesday.

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

Rating Change #3

Sotheby's ( BID) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, 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 sub par growth in net income.

Highlights from the ratings report include:
  • Net operating cash flow has increased to $344.09 million or 19.46% when compared to the same quarter last year. In addition, SOTHEBY'S has also vastly surpassed the industry average cash flow growth rate of -56.48%.
  • The gross profit margin for SOTHEBY'S is rather high; currently it is at 62.40%. Regardless of BID's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, BID's net profit margin of 25.10% significantly outperformed against the industry.
  • Despite currently having a low debt-to-equity ratio of 0.51, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that BID's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.60 is high and demonstrates strong liquidity.
  • SOTHEBY'S's earnings per share declined by 24.6% 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, SOTHEBY'S increased its bottom line by earning $2.44 versus $2.32 in the prior year. This year, the market expects an improvement in earnings ($2.46 versus $2.44).
  • BID, with its decline in revenue, underperformed when compared the industry average of 4.5%. Since the same quarter one year prior, revenues fell by 10.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
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Sotheby's, together with its subsidiaries, operates as an auctioneer of authenticated fine and decorative art, jewelry, and collectibles in the United States, the United Kingdom, China, France, and internationally. The company operates in three segments: Auction, Finance, and Dealer. The company has a P/E ratio of 16, above the average specialty retail industry P/E ratio of 12.2 and below the S&P 500 P/E ratio of 17.7. Sothebys has a market cap of $2.3 billion and is part of the services sector and specialty retail industry. Shares are up 39.4% year to date as of the close of trading on Tuesday.

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

Rating Change #2

Siliconware Precision Industries Co Ltd ( SPIL) has been upgraded by TheStreet Ratings from hold to buy. The company's strongest point has been its 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:
  • SILICONWARE PRECISION INDS reported flat earnings per share in the most recent quarter. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, SILICONWARE PRECISION INDS reported lower earnings of $0.26 versus $0.30 in the prior year. This year, the market expects an improvement in earnings ($0.36 versus $0.26).
  • The revenue fell significantly faster than the industry average of 25.7%. Since the same quarter one year prior, revenues fell by 17.6%. Weakness in the company's revenue seems to not be hurting the bottom line, shown by stable earnings per share.
  • In its most recent trading session, SPIL has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. 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.
  • The gross profit margin for SILICONWARE PRECISION INDS is rather low; currently it is at 16.00%. It has decreased significantly from the same period last year. Along with this, the net profit margin of 7.50% significantly 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 Semiconductors & Semiconductor Equipment industry. The net income has decreased by 18.6% when compared to the same quarter one year ago, dropping from $48.40 million to $39.41 million.
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Siliconware Precision Industries Co., Ltd. provides semiconductor packaging and testing services worldwide. The company has a P/E ratio of 21.6, above the average electronics industry P/E ratio of 19.9 and above the S&P 500 P/E ratio of 17.7. Siliconware Precision has a market cap of $3.42 billion and is part of the technology sector and electronics industry. Shares are up 37.4% year to date as of the close of trading on Tuesday.

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

Rating Change #1

Thomson Reuters Corporation ( TRI) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:
  • TRI's revenue growth trails the industry average of 19.6%. Since the same quarter one year prior, revenues slightly increased by 3.4%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The current debt-to-equity ratio, 0.46, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that TRI's debt-to-equity ratio is low, the quick ratio, which is currently 0.55, displays a potential problem in covering short-term cash needs.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 27.22%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 1251.85% 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.
  • 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 Media industry. The net income has significantly decreased by 1248.2% when compared to the same quarter one year ago, falling from $224.00 million to -$2,572.00 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 Media industry and the overall market, THOMSON-REUTERS CORP's return on equity significantly trails that of both the industry average and the S&P 500.
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Thomson Reuters Corporation provides intelligent information for businesses and professionals worldwide. Thomson Reuters has a market cap of $23.68 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 Thomson Reuters 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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