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 73 U.S. common stocks for week ending August 17, 2012. 31 stocks were upgraded and 42 stocks were downgraded by our stock model.

Rating Change #10

Gentex Corporation ( GNTX) 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 growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, poor profit margins and disappointing return on equity.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 3.2%. Since the same quarter one year prior, revenues rose by 15.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • GNTX 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.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Auto Components industry average. The net income increased by 6.0% when compared to the same quarter one year prior, going from $38.47 million to $40.77 million.
  • The gross profit margin for GENTEX CORP is currently lower than what is desirable, coming in at 33.10%. It has decreased from the same quarter the previous year. Regardless of the weak results of the gross profit margin, the net profit margin of 14.50% is above that of the industry average.
  • GNTX'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 29.10%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, GNTX is still more expensive than most of the other companies in its industry.

Gentex Corporation designs, develops, manufactures, and markets electro-optical products for the automotive, commercial building, and aircraft industries primarily in the United States, Germany, and Japan. The company has a P/E ratio of 15.1, above the average automotive industry P/E ratio of 14.6 and below the S&P 500 P/E ratio of 17.7. Gentex has a market cap of $2.5 billion and is part of the consumer goods sector and automotive industry. Shares are down 39.8% year to date as of the close of trading on Tuesday.

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

Rating Change #9

NYSE Euronext Inc ( NYX) 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, good cash flow from operations and attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and poor profit margins.

Highlights from the ratings report include:
  • The current debt-to-equity ratio, 0.36, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that NYX's debt-to-equity ratio is low, the quick ratio, which is currently 0.59, displays a potential problem in covering short-term cash needs.
  • Net operating cash flow has remained constant at $228.00 million with no significant change when compared to the same quarter last year. Along with maintaining stable cash flow from operations, the firm exceeded the industry average cash flow growth rate of -40.26%.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 19.4%. Since the same quarter one year prior, revenues slightly dropped by 9.7%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • In its most recent trading session, NYX 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. 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 gross profit margin for NYSE EURONEXT is currently lower than what is desirable, coming in at 27.60%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 12.70% trails that of the industry average.

NYSE Euronext, through its subsidiaries, operates securities exchanges. It operates various stock exchanges, including the New York Stock Exchange (NYSE), NYSE Arca, Inc., and NYSE Amex LLC in the United States; and five European-based exchanges that comprise Euronext N.V. The company has a P/E ratio of 12.5, equal to the average financial services industry P/E ratio and below the S&P 500 P/E ratio of 17.7. NYSE Euronext has a market cap of $6.15 billion and is part of the financial sector and financial services industry. Shares are down 3.4% year to date as of the close of trading on Friday.

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

Rating Change #8

L-3 Communications Holdings Inc ( LLL) 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, attractive valuation levels and increase in stock price during the past year. 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:
  • The debt-to-equity ratio is somewhat low, currently at 0.61, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.34, which illustrates the ability to avoid short-term cash problems.
  • LLL, with its decline in revenue, slightly underperformed the industry average of 3.7%. Since the same quarter one year prior, revenues slightly dropped by 5.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The gross profit margin for L-3 COMMUNICATIONS HLDGS INC is currently extremely low, coming in at 14.90%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 5.80% trails that of the industry average.
  • Net operating cash flow has declined marginally to $271.00 million or 9.36% 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.

L-3 Communications Holdings, Inc. provides command, control, communications, intelligence, surveillance, and reconnaissance (C3ISR) systems; aircraft modernization and maintenance; and government services in the United States and internationally. The company has a P/E ratio of 7.8, above the average aerospace/defense industry P/E ratio of 7.7 and below the S&P 500 P/E ratio of 17.7. L-3 has a market cap of $6.74 billion and is part of the industrial goods sector and aerospace/defense industry. Shares are up 3.9% year to date as of the close of trading on Tuesday.

You can view the full L-3 Ratings Report or get investment ideas from our investment research center.

Rating Change #7

ConAgra Foods Inc ( CAG) 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 increase in stock price during the past year. 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:
  • The revenue growth came in higher than the industry average of 6.7%. Since the same quarter one year prior, revenues slightly increased by 6.3%. 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.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. We feel that the combination of its price rise over the last year and its current price-to-earnings ratio relative to its industry tend to reduce its upside potential.
  • CONAGRA FOODS INC 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, CONAGRA FOODS INC reported lower earnings of $1.11 versus $1.90 in the prior year. This year, the market expects an improvement in earnings ($1.98 versus $1.11).
  • Net operating cash flow has decreased to $272.60 million or 33.89% 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 Food Products industry. The net income has significantly decreased by 133.8% when compared to the same quarter one year ago, falling from $254.90 million to -$86.20 million.

ConAgra Foods, Inc. operates as a food company primarily in North America. The company operates through two segments, Consumer Foods and Commercial Foods. The company has a P/E ratio of 22.2, above the average food & beverage industry P/E ratio of 22 and above the S&P 500 P/E ratio of 17.7. ConAgra has a market cap of $10.06 billion and is part of the consumer goods sector and food & beverage industry. Shares are down 5.9% year to date as of the close of trading on Tuesday.

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

Rating Change #6

National Electricity Company Of Chile Inc ( EOC) 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 and notable return on equity. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow, poor profit margins and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • The debt-to-equity ratio is somewhat low, currently at 0.75, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Despite the fact that EOC's debt-to-equity ratio is low, the quick ratio, which is currently 0.58, displays a potential problem in covering short-term cash needs.
  • EOC, with its decline in revenue, slightly underperformed the industry average of 6.5%. Since the same quarter one year prior, revenues fell by 12.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The change in net income from the same quarter one year ago has significantly exceeded that of the Independent Power Producers & Energy Traders industry average, but is less than that of the S&P 500. The net income has significantly decreased by 54.6% when compared to the same quarter one year ago, falling from $142.53 million to $64.73 million.
  • The gross profit margin for ENDESA-EMPR NAC ELEC (CHILE) is currently lower than what is desirable, coming in at 29.20%. It has decreased from the same quarter the previous year. Regardless of the weak results of the gross profit margin, the net profit margin of 5.60% is above that of the industry average.
  • Net operating cash flow has decreased to $129.80 million or 49.37% 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.

Empresa Nacional de Electricidad S.A., together with its subsidiaries, engages in the generation, transmission, production, and distribution of electricity. The company has a P/E ratio of 21.9, above the average utilities industry P/E ratio of 16.3 and above the S&P 500 P/E ratio of 17.7. National Electricity Company of Chile has a market cap of $13.5 billion and is part of the utilities sector and utilities industry. Shares are up 11.8% year to date as of the close of trading on Tuesday.

You can view the full National Electricity Company of Chile Ratings Report or get investment ideas from our investment research center.

Rating Change #5

Yandex NV ( YNDX) 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 impressive record of earnings per share growth. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.

Highlights from the ratings report include:
  • Compared to other companies in the Internet Software & Services industry and the overall market, YANDEX NV's return on equity exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has improved to $82.38 million from having none in the same quarter last year. Since the company had no net operating cash flow for the prior period, we cannot calculate a percent change in order to compare its growth rate with that of its industry average.
  • YNDX'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 26.46%, 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.
  • The gross profit margin for YANDEX NV is currently very high, coming in at 74.30%. Regardless of YNDX's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, YNDX's net profit margin of 30.10% compares favorably to the industry average.

Yandex N.V., an Internet and technology company, operates an Internet search engine in Russia and internationally. It offers access to a range of information available online; localized homepages for specific geographic markets; and personalized and email services. The company has a P/E ratio of 36.6, above the average internet industry P/E ratio of 34.7 and above the S&P 500 P/E ratio of 17.7. Yandex has a market cap of $3.76 billion and is part of the technology sector and internet industry. Shares are up 2.5% year to date as of the close of trading on Friday.

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

Rating Change #4

Harmony Gold Mining Co. Ltd ( HMY) 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, impressive record of earnings per share growth, compelling growth in net income and attractive valuation levels. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 1.3%. Since the same quarter one year prior, revenues rose by 19.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • HMY's debt-to-equity ratio is very low at 0.05 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 1.19, which illustrates the ability to avoid short-term cash problems.
  • HARMONY GOLD MINING CO LTD reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, HARMONY GOLD MINING CO LTD turned its bottom line around by earning $0.24 versus -$0.05 in the prior year. This year, the market expects an improvement in earnings ($0.80 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 Metals & Mining industry. The net income increased by 316.4% when compared to the same quarter one year prior, rising from $34.26 million to $142.67 million.

Harmony Gold Mining Company Limited engages in the exploration, processing, and smelting of gold in South Africa and Papua New Guinea. The company has a P/E ratio of 53.9, above the average metals & mining industry P/E ratio of 13.4 and above the S&P 500 P/E ratio of 17.7. Harmony has a market cap of $4.26 billion and is part of the basic materials sector and metals & mining industry. Shares are down 12% year to date as of the close of trading on Tuesday.

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

Rating Change #3

SK Telecom Co. Ltd ( SKM) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its attractive valuation levels and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • SKM, with its decline in revenue, slightly underperformed the industry average of 3.6%. Since the same quarter one year prior, revenues slightly dropped by 0.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • In its most recent trading session, SKM 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 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.
  • SK TELECOM CO LTD's earnings per share declined by 40.0% 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, SK TELECOM CO LTD increased its bottom line by earning $2.13 versus $1.85 in the prior year. For the next year, the market is expecting a contraction of 17.8% in earnings ($1.75 versus $2.13).
  • The change in net income from the same quarter one year ago has exceeded that of the Wireless Telecommunication Services industry average, but is less than that of the S&P 500. The net income has significantly decreased by 41.1% when compared to the same quarter one year ago, falling from $494.45 million to $291.11 million.

SK Telecom Co., Ltd. provides wireless telecommunications services principally in Korea. The company has a P/E ratio of 6.7, below the average telecommunications industry P/E ratio of 7.3 and below the S&P 500 P/E ratio of 17.7. SK Telecom has a market cap of $8.79 billion and is part of the technology sector and telecommunications industry. Shares are up 5.4% year to date as of the close of trading on Tuesday.

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

Rating Change #2

Sprint Nextel Corp ( S) 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, 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, disappointing return on equity and generally higher debt management risk.

Highlights from the ratings report include:
  • S's revenue growth has slightly outpaced the industry average of 3.7%. Since the same quarter one year prior, revenues slightly increased by 6.4%. 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.
  • Compared to its closing price of one year ago, S's share price has jumped by 54.88%, exceeding the performance of the broader market during that same time frame. 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.
  • 43.60% is the gross profit margin for SPRINT NEXTEL CORP which we consider to be strong. Regardless of S's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, S's net profit margin of -15.50% significantly underperformed when compared to the industry average.
  • 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 Wireless Telecommunication Services industry and the overall market, SPRINT NEXTEL CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • 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 62.2% when compared to the same quarter one year ago, falling from -$847.00 million to -$1,374.00 million.

Sprint Nextel Corporation, together with its subsidiaries, offers wireless and wireline communications products and services to individual consumers, businesses, government subscribers, and resellers in the United States, Puerto Rico, and the United States Virgin Islands. Sprint Nextel has a market cap of $13.83 billion and is part of the technology sector and telecommunications industry. Shares are up 130.3% year to date as of the close of trading on Thursday.

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

Rating Change #1

Suncor Energy Inc ( SU) 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, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, good cash flow from operations and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • SU's revenue growth has slightly outpaced the industry average of 0.6%. Since the same quarter one year prior, revenues slightly increased by 3.7%. 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.
  • SU's debt-to-equity ratio is very low at 0.28 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 1.06, which illustrates the ability to avoid short-term cash problems.
  • Net operating cash flow has increased to $2,809.00 million or 24.84% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -8.59%.
  • SUNCOR ENERGY INC's earnings per share declined by 35.5% in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past two years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, SUNCOR ENERGY INC increased its bottom line by earning $2.63 versus $1.71 in the prior year.

Suncor Energy Inc., together with its subsidiaries, operates as an integrated energy company. The company has a P/E ratio of 11, below the average energy industry P/E ratio of 11.4 and below the S&P 500 P/E ratio of 17.7. Suncor Energy has a market cap of $49.36 billion and is part of the basic materials sector and energy industry. Shares are up 11.5% year to date as of the close of trading on Thursday.

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

-- Reported by Kevin Baker in Palm Beach Gardens, 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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