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 53 U.S. common stocks for week ending June 22, 2012. 20 stocks were upgraded and 33 stocks were downgraded by our stock model.

Rating Change #10

Patterson-UTI Energy Inc ( PTEN) 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 stock has had a generally disappointing performance in the past year.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 14.4%. Since the same quarter one year prior, revenues rose by 31.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • PTEN's debt-to-equity ratio is very low at 0.19 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.30, which illustrates the ability to avoid short-term cash problems.
  • 39.40% is the gross profit margin for PATTERSON-UTI ENERGY INC which we consider to be strong. Regardless of PTEN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, PTEN's net profit margin of 13.00% compares favorably to the industry average.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. When compared to other companies in the Energy Equipment & Services industry and the overall market, PATTERSON-UTI ENERGY INC's return on equity is below that of both the industry average and the S&P 500.
  • PTEN'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 49.59%, 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. 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.

Patterson-UTI Energy, Inc., through its subsidiaries, provides onshore contract drilling services to oil and natural gas exploration and production companies in the United States and Canada. The company has a P/E ratio of 6.3, equal to the average energy industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Patterson-UTI Energy has a market cap of $2.2 billion and is part of the basic materials sector and energy industry. Shares are down 29.5% year to date as of the close of trading on Tuesday.

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

Rating Change #9

VeriFone Systems Inc ( PAY) 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, reasonable valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, unimpressive growth in net income and weak operating cash flow.

Highlights from the ratings report include:
  • PAY's very impressive revenue growth greatly exceeded the industry average of 2.5%. Since the same quarter one year prior, revenues leaped by 63.7%. 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.
  • 48.10% is the gross profit margin for VERIFONE SYSTEMS INC which we consider to be strong. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, PAY's net profit margin of 0.70% significantly trails the industry average.
  • Net operating cash flow has decreased to $30.75 million or 19.95% 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.
  • The share price of VERIFONE SYSTEMS INC has not done very well: it is down 19.35% 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.

Verifone Systems, Inc. designs, markets, and services electronic payment solutions in North America and internationally. The company has a P/E ratio of 14, equal to the average consumer durables industry P/E ratio and below the S&P 500 P/E ratio of 17.7. VeriFone Systems has a market cap of $3.47 billion and is part of the consumer goods sector and consumer durables industry. Shares are down 9.3% year to date as of the close of trading on Wednesday.

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

Rating Change #8

Limited Brands Inc ( LTD) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, expanding profit margins and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including deteriorating net income and weak operating cash flow.

Highlights from the ratings report include:
  • Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.12 is sturdy.
  • 46.30% is the gross profit margin for LIMITED BRANDS INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 5.80% trails the industry average.
  • 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 underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Specialty Retail industry average. The net income has decreased by 24.6% when compared to the same quarter one year ago, dropping from $165.17 million to $124.56 million.
  • Net operating cash flow has significantly decreased to -$183.00 million or 916.66% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

Limited Brands, Inc. operates as a specialty retailer of women's intimate and other apparel, beauty, and personal care products and accessories primarily in the United States and Canada. The company has a P/E ratio of 16.3, equal to the average retail industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Limited has a market cap of $12.42 billion and is part of the services sector and retail industry. Shares are up 6.1% year to date as of the close of trading on Tuesday.

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

Rating Change #7

Charles Schwab Corp ( SCHW) has been downgraded by TheStreet Ratings from buy to hold. Among the primary strengths of the company is its solid financial position based on a variety of debt and liquidity measures that we have evaluated. At the same time, however, we also find weaknesses including a generally disappointing performance in the stock itself, disappointing return on equity and poor profit margins.

Highlights from the ratings report include:
  • SCHW's debt-to-equity ratio is very low at 0.24 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
  • Despite the weak revenue results, SCHW has outperformed against the industry average of 22.9%. Since the same quarter one year prior, revenues slightly dropped by 2.3%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • SCHWAB (CHARLES) CORP's earnings per share declined by 25.0% 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, 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 6.3% in earnings ($0.67 versus $0.71).
  • The gross profit margin for SCHWAB (CHARLES) CORP is currently lower than what is desirable, coming in at 31.60%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 15.90% trails that of the industry average.
  • Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, SCHW has underperformed the S&P 500 Index, declining 20.94% 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.

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 19.5, above the average financial services industry P/E ratio of 19.2 and above the S&P 500 P/E ratio of 17.7. Charles Schwab has a market cap of $16.13 billion and is part of the financial sector and financial services industry. Shares are up 11.7% year to date as of the close of trading on Tuesday.

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

Rating Change #6

Dell Inc ( DELL) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its attractive valuation levels and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, poor profit margins and weak operating cash flow.

Highlights from the ratings report include:
  • DELL INC's earnings per share declined by 26.5% 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, DELL INC increased its bottom line by earning $1.89 versus $1.35 in the prior year. This year, the market expects an improvement in earnings ($1.92 versus $1.89).
  • The revenue fell significantly faster than the industry average of 59.2%. Since the same quarter one year prior, revenues slightly dropped by 4.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Net operating cash flow has significantly decreased to -$138.00 million or 129.67% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • 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 Computers & Peripherals industry. The net income has significantly decreased by 32.8% when compared to the same quarter one year ago, falling from $945.00 million to $635.00 million.

Dell Inc. provides integrated technology solutions in the information technology (IT) industry worldwide. The company has a P/E ratio of seven, equal to the average computer hardware industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Dell has a market cap of $21.51 billion and is part of the technology sector and computer hardware industry. Shares are down 15.9% year to date as of the close of trading on Tuesday.

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

Rating Change #5

Gaylord Entertainment Co ( GET) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, revenue growth, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had generally poor debt management on most measures that we evaluated.

Highlights from the ratings report include:
  • GAYLORD ENTERTAINMENT 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, GAYLORD ENTERTAINMENT CO turned its bottom line around by earning $0.20 versus -$1.94 in the prior year. This year, the market expects an improvement in earnings ($0.79 versus $0.20).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Hotels, Restaurants & Leisure industry. The net income increased by 408.0% when compared to the same quarter one year prior, rising from -$1.96 million to $6.03 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 8.6%. Since the same quarter one year prior, revenues slightly increased by 8.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Net operating cash flow has significantly increased by 274.41% to $13.92 million when compared to the same quarter last year. In addition, GAYLORD ENTERTAINMENT CO has also vastly surpassed the industry average cash flow growth rate of 8.36%.
  • 43.50% is the gross profit margin for GAYLORD ENTERTAINMENT CO which we consider to be strong. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, GET's net profit margin of 2.50% significantly trails the industry average.

Gaylord Entertainment Company, through its subsidiaries, operates as a hospitality and entertainment company in the United States. The company primarily focuses on the large group meetings and conventions sector of the lodging market. The company has a P/E ratio of 104.8, below the average leisure industry P/E ratio of 107.7 and above the S&P 500 P/E ratio of 17.7. Gaylord Entertainment has a market cap of $1.9 billion and is part of the services sector and leisure industry. Shares are up 56.3% year to date as of the close of trading on Friday.

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

Rating Change #4

Capitol Federal Financial Inc ( CFFN) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its expanding profit margins, good cash flow from operations, impressive record of earnings per share growth, notable return on equity and compelling growth in net income. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • The gross profit margin for CAPITOL FEDERAL FINL INC is rather high; currently it is at 58.30%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 21.60% is above that of the industry average.
  • Net operating cash flow has significantly increased by 66.47% to $21.77 million when compared to the same quarter last year. In addition, CAPITOL FEDERAL FINL INC has also vastly surpassed the industry average cash flow growth rate of -16.12%.
  • 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 Thrifts & Mortgage Finance industry and the overall market on the basis of return on equity, CAPITOL FEDERAL FINL INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • CAPITOL FEDERAL FINL INC has improved earnings per share by 20.0% 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, CAPITOL FEDERAL FINL INC reported lower earnings of $0.23 versus $0.41 in the prior year. This year, the market expects an improvement in earnings ($0.49 versus $0.23).
  • Despite the weak revenue results, CFFN has outperformed against the industry average of 19.1%. Since the same quarter one year prior, revenues slightly dropped by 1.8%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

Capitol Federal Financial, Inc. is the bank holding company for Capitol Federal Savings Bank through which it provides commercial banking products and services. The company has a P/E ratio of 25.9, equal to the average banking industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Capitol Federal Financial has a market cap of $1.91 billion and is part of the financial sector and banking industry. Shares are up 1.1% year to date as of the close of trading on Tuesday.

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

Rating Change #3

Starwood Property Trust Inc ( STWD) 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, largely solid financial position with reasonable debt levels by most measures, growth in earnings per share, expanding profit margins 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:
  • STWD's very impressive revenue growth greatly exceeded the industry average of 17.9%. Since the same quarter one year prior, revenues leaped by 95.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The debt-to-equity ratio is somewhat low, currently at 0.76, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels.
  • STARWOOD PROPERTY TRUST INC has improved earnings per share by 23.3% 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 two years. We feel that this trend should continue. During the past fiscal year, STARWOOD PROPERTY TRUST INC increased its bottom line by earning $1.41 versus $1.14 in the prior year. This year, the market expects an improvement in earnings ($1.89 versus $1.41).
  • The gross profit margin for STARWOOD PROPERTY TRUST INC is currently very high, coming in at 75.50%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 64.50% significantly outperformed against the industry average.
  • Net operating cash flow has significantly increased by 476.74% to $174.13 million when compared to the same quarter last year. In addition, STARWOOD PROPERTY TRUST INC has also vastly surpassed the industry average cash flow growth rate of 25.90%.

Starwood Property Trust, Inc. engages in originating, investing in, financing, and managing commercial mortgage loans, other commercial real estate debt investments, commercial mortgage-backed securities, and other commercial real estate-related debt investments. The company has a P/E ratio of 14.2, above the average real estate industry P/E ratio of 13.9 and below the S&P 500 P/E ratio of 17.7. Starwood Property has a market cap of $2.45 billion and is part of the financial sector and real estate industry. Shares are up 13.7% year to date as of the close of trading on Thursday.

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

Rating Change #2

Toll Brothers Inc ( TOL) 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, solid stock price performance and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 30.3%. Since the same quarter one year prior, revenues rose by 18.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • TOLL BROTHERS 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, TOLL BROTHERS INC turned its bottom line around by earning $0.24 versus -$0.03 in the prior year. This year, the market expects an improvement in earnings ($0.45 versus $0.24).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Household Durables industry. The net income increased by 181.2% when compared to the same quarter one year prior, rising from -$20.77 million to $16.87 million.
  • Powered by its strong earnings growth of 183.33% and other important driving factors, this stock has surged by 31.66% over the past year, outperforming the rise in the S&P 500 Index during the same period. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
  • TOL's debt-to-equity ratio of 0.74 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.

Toll Brothers, Inc., together with its subsidiaries, designs, builds, markets, and arranges finance for single-family detached and attached homes in luxury residential communities. The company has a P/E ratio of 61.6, equal to the average materials & construction industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Toll Brothers has a market cap of $4.34 billion and is part of the industrial goods sector and materials & construction industry. Shares are up 26.8% year to date as of the close of trading on Wednesday.

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

Rating Change #1

Las Vegas Sands Corp ( LVS) 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, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 8.5%. Since the same quarter one year prior, revenues rose by 30.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • LAS VEGAS SANDS 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, LAS VEGAS SANDS CORP increased its bottom line by earning $1.56 versus $0.50 in the prior year. This year, the market expects an improvement in earnings ($2.70 versus $1.56).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Hotels, Restaurants & Leisure industry. The net income increased by 72.5% when compared to the same quarter one year prior, rising from $289.32 million to $498.94 million.
  • 48.10% is the gross profit margin for LAS VEGAS SANDS CORP which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 18.10% is above that of the industry average.

Las Vegas Sands Corp., together with its subsidiaries, owns, develops, and operates various integrated resort properties primarily in the United States, Macau, and Singapore. The company has a P/E ratio of 23.9, equal to the average leisure industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Las Vegas Sands has a market cap of $37.17 billion and is part of the services sector and leisure industry. Shares are up 5.6% year to date as of the close of trading on Tuesday.

You can view the full Las Vegas Sands 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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