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 77 U.S. common stocks for week ending August 31, 2012. 44 stocks were upgraded and 33 stocks were downgraded by our stock model.

Rating Change #10

Esterline Technologies ( ESL) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 3.4%. Since the same quarter one year prior, revenues rose by 18.7%. 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.
  • 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 1.38, which illustrates the ability to avoid short-term cash problems.
  • ESTERLINE TECHNOLOGIES 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. 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, ESTERLINE TECHNOLOGIES CORP increased its bottom line by earning $4.27 versus $4.25 in the prior year. This year, the market expects an improvement in earnings ($4.88 versus $4.27).
  • 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 Aerospace & Defense industry. The net income has significantly decreased by 145.4% when compared to the same quarter one year ago, falling from $37.70 million to -$17.10 million.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. In comparison to the other companies in the Aerospace & Defense industry and the overall market, ESTERLINE TECHNOLOGIES CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.

Esterline Technologies Corporation designs, manufactures, and markets engineered products and systems for aerospace and defense customers primarily in the United States and internationally. The company has a P/E ratio of 13, equal to the average aerospace/defense industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Esterline has a market cap of $1.6 billion and is part of the industrial goods sector and aerospace/defense industry. Shares are down 7.1% year to date as of the close of trading on Friday.

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

Rating Change #9

James Hardie Industries SE ( JHX) 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, revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we find that the growth in the company's earnings per share has not been good.

Highlights from the ratings report include:
  • Compared to other companies in the Construction Materials industry and the overall market, JAMES HARDIE INDUSTRIES SE's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The revenue growth came in higher than the industry average of 19.6%. Since the same quarter one year prior, revenues slightly increased by 8.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • JHX 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 the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.16, which illustrates the ability to avoid short-term cash problems.
  • 36.90% is the gross profit margin for JAMES HARDIE INDUSTRIES SE which we consider to be strong. Regardless of JHX's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, JHX's net profit margin of 20.20% significantly outperformed against the industry.
  • JAMES HARDIE INDUSTRIES SE has shown improvement in its earnings for its most recently reported quarter when compared with the same quarter a year earlier. 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, JAMES HARDIE INDUSTRIES SE turned its bottom line around by earning $6.89 versus -$3.97 in the prior year. For the next year, the market is expecting a contraction of 84.2% in earnings ($1.09 versus $6.89).

James Hardie Industries SE, together with its subsidiaries, manufactures and sells fiber cement products for interior and exterior building construction applications primarily in the United States, Canada, Australia, New Zealand, the Philippines, and Europe. The company has a P/E ratio of 6.2, above the average materials & construction industry P/E ratio of 5.6 and below the S&P 500 P/E ratio of 17.7. James Hardie Industries SE has a market cap of $3.76 billion and is part of the industrial goods sector and materials & construction industry. Shares are up 25.3% year to date as of the close of trading on Tuesday.

You can view the full James Hardie Industries SE Ratings Report or get investment ideas from our investment research center.

Rating Change #8

Cliffs Natural Resources Inc ( CLF) 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, expanding profit margins and notable return on equity. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow, a generally disappointing performance in the stock itself and deteriorating net income.

Highlights from the ratings report include:
  • 35.70% is the gross profit margin for CLIFFS NATURAL RESOURCES INC which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 15.90% trails the industry average.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 50.76%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 38.22% 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.
  • Net operating cash flow has significantly decreased to $96.20 million or 84.43% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

Cliffs Natural Resources Inc., a mining and natural resources company, engages in the production of iron ore pellets, fines and lump ore, and metallurgical coal. The company has a P/E ratio of 3.9, equal to the average metals & mining industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Cliffs Natural has a market cap of $5.54 billion and is part of the basic materials sector and metals & mining industry. Shares are down 39.5% year to date as of the close of trading on Tuesday.

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

Rating Change #7

Mobile Telesystems OJSC ( MBT) 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 increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including deteriorating net income and generally higher debt management risk.

Highlights from the ratings report include:
  • Net operating cash flow has increased to $997.61 million or 31.05% when compared to the same quarter last year. In addition, MOBILE TELESYSTEMS OJSC has also vastly surpassed the industry average cash flow growth rate of -33.35%.
  • MOBILE TELESYSTEMS OJSC 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. 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, MOBILE TELESYSTEMS OJSC increased its bottom line by earning $1.46 versus $1.44 in the prior year. This year, the market expects an improvement in earnings ($1.69 versus $1.46).
  • MBT, with its decline in revenue, slightly underperformed the industry average of 0.0%. Since the same quarter one year prior, revenues slightly dropped by 0.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The debt-to-equity ratio is very high at 3.13 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. To add to this, MBT has a quick ratio of 0.56, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
  • 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 285.8% when compared to the same quarter one year ago, falling from $367.01 million to -$681.76 million.

Mobile TeleSystems OJSC, together with its subsidiaries, provides telecommunications services primarily in the Russian Federation, Ukraine, Uzbekistan, Armenia, and Belarus. The company has a P/E ratio of 12.5, above the average telecommunications industry P/E ratio of 11.1 and below the S&P 500 P/E ratio of 17.7. Mobile Telesystems OJSC has a market cap of $18.18 billion and is part of the technology sector and telecommunications industry. Shares are up 24.2% year to date as of the close of trading on Wednesday.

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

Rating Change #6

Berkshire Hathaway Inc ( BRK.A) 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 solid stock price performance. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, premium valuation and poor profit margins.

Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 0.7%. Since the same quarter one year prior, revenues slightly increased by 0.7%. 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.
  • Despite currently having a low debt-to-equity ratio of 0.34, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further.
  • 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 the Insurance industry average. The net income has decreased by 9.0% when compared to the same quarter one year ago, dropping from $3,417.00 million to $3,108.00 million.

Berkshire Hathaway, Inc. is a publicly owned investment manager. Through its subsidiaries, the firm primarily engages in the insurance and reinsurance of property and casualty risks business. Berkshire Hathaway was founded in 1889 and is based in Omaha, Nebraska. The company has a P/E ratio of 1756.5, above the S&P 500 P/E ratio of 17.7. Berkshire Hathaway has a market cap of $118.97 billion and is part of the financial sector and insurance industry. Shares are up 11.7% year to date as of the close of trading on Tuesday.

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

Rating Change #5

Atlantic Power Corporation ( AT) has been upgraded by TheStreet Ratings from sell to hold. Among the primary strengths of the company is its robust revenue growth -- not just in the most recent periods but in previous quarters as well. At the same time, however, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and generally higher debt management risk.

Highlights from the ratings report include:
  • AT's very impressive revenue growth greatly exceeded the industry average of 6.5%. Since the same quarter one year prior, revenues leaped by 191.5%. 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 share price of ATLANTIC POWER CORP has not done very well: it is down 8.41% 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. 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.
  • 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 Independent Power Producers & Energy Traders industry and the overall market, ATLANTIC POWER CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for ATLANTIC POWER CORP is currently lower than what is desirable, coming in at 34.60%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -3.30% trails that of the industry average.

Atlantic Power Corporation operates as a power generation and infrastructure company with a portfolio of assets in the United States and Canada. Atlantic has a market cap of $1.71 billion and is part of the utilities sector and utilities industry. Shares are up 0.3% year to date as of the close of trading on Thursday.

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

Rating Change #4

MBIA Inc ( MBI) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity and attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and weak operating cash flow.

Highlights from the ratings report include:
  • MBI's very impressive revenue growth greatly exceeded the industry average of 0.7%. Since the same quarter one year prior, revenues leaped by 484.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 338.23% and other important driving factors, this stock has surged by 46.76% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • MBIA INC reported significant earnings per share improvement 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, MBIA INC swung to a loss, reporting -$6.67 versus $0.28 in the prior year. This year, the market expects an improvement in earnings ($6.18 versus -$6.67).
  • The debt-to-equity ratio is very high at 4.71 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.
  • Net operating cash flow has significantly decreased to -$557.00 million or 311.49% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

MBIA Inc., together with its subsidiaries, provides financial guarantee insurance and related reinsurance, advisory, and portfolio services for the public and structured finance markets; and asset management advisory services in the United States and internationally. The company has a P/E ratio of 5.2, above the average insurance industry P/E ratio of five and below the S&P 500 P/E ratio of 17.7. MBIA has a market cap of $2.04 billion and is part of the financial sector and insurance industry. Shares are down 10.1% year to date as of the close of trading on Tuesday.

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

Rating Change #3

Access Midstream Partners LP ( ACMP) has been upgraded by TheStreet Ratings from sell to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins, increase in net income, good cash flow from operations and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 2.7%. Since the same quarter one year prior, revenues rose by 12.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The gross profit margin for ACCESS MIDSTREAM PARTNERS LP is currently very high, coming in at 70.10%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 34.60% significantly outperformed against the industry average.
  • 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 25.6% when compared to the same quarter one year prior, rising from $41.08 million to $51.61 million.
  • Net operating cash flow has remained constant at $69.18 million with no significant change when compared to the same quarter last year. In addition, ACCESS MIDSTREAM PARTNERS LP has modestly surpassed the industry average cash flow growth rate of -5.50%.
  • ACCESS MIDSTREAM PARTNERS LP has improved earnings per share by 17.2% 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, ACCESS MIDSTREAM PARTNERS LP reported lower earnings of $1.36 versus $1.40 in the prior year. This year, the market expects an improvement in earnings ($1.38 versus $1.36).

Access Midstream Partners, L.P. owns, operates, develops, and acquires natural gas gathering systems and other midstream energy assets in the United States. Its assets are located in Texas, Louisiana, Oklahoma, Kansas, Arkansas, West Virginia, and Pennsylvania. The company has a P/E ratio of 19.8, below the average energy industry P/E ratio of 20 and above the S&P 500 P/E ratio of 17.7. Access Midstream has a market cap of $2.33 billion and is part of the basic materials sector and energy industry. Shares are up 2.7% year to date as of the close of trading on Thursday.

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

Rating Change #2

Six Flags Entertainment Corp ( SIX) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins, good cash flow from operations, compelling growth in net income and solid stock price performance. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:
  • SIX's revenue growth has slightly outpaced the industry average of 0.8%. Since the same quarter one year prior, revenues rose by 10.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Hotels, Restaurants & Leisure industry. The net income increased by 106.7% when compared to the same quarter one year prior, rising from $34.96 million to $72.27 million.
  • The gross profit margin for SIX FLAGS ENTERTAINMENT CORP is rather high; currently it is at 57.80%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 19.30% is above that of the industry average.
  • Net operating cash flow has increased to $175.97 million or 37.60% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -8.95%.
  • Powered by its strong earnings growth of 104.83% and other important driving factors, this stock has surged by 61.68% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp 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 other strengths this company displays justify these higher price levels.

Six Flags Entertainment Corporation owns and operates regional theme, water, and zoological parks. The company's parks offers various selection of state-of-the-art and traditional thrill rides, water attractions, themed areas, concerts and shows, restaurants, game venues, and retail outlets. The company has a P/E ratio of 66.3, below the average leisure industry P/E ratio of 70.6 and above the S&P 500 P/E ratio of 17.7. Six Flags Entertainment has a market cap of $2.92 billion and is part of the services sector and leisure industry. Shares are up 33.2% year to date as of the close of trading on Thursday.

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

Rating Change #1

Denbury Resources Inc ( DNR) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins, 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:
  • DNR's revenue growth has slightly outpaced the industry average of 2.7%. Since the same quarter one year prior, revenues slightly increased by 0.2%. 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.
  • The gross profit margin for DENBURY RESOURCES INC is currently very high, coming in at 72.50%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 35.50% significantly outperformed against the industry average.
  • Net operating cash flow has increased to $440.97 million or 10.65% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -5.55%.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, DENBURY RESOURCES INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • DENBURY RESOURCES INC's earnings per share declined by 15.6% 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, DENBURY RESOURCES INC increased its bottom line by earning $1.41 versus $0.76 in the prior year. For the next year, the market is expecting a contraction of 1.4% in earnings ($1.39 versus $1.41).

Denbury Resources Inc. engages in the acquisition, development, exploitation, and exploration of oil and natural gas properties in the Gulf Coast region located in Mississippi, Texas, Louisiana, and Alabama. The company has a P/E ratio of 9.3, equal to the average energy industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Denbury has a market cap of $5.99 billion and is part of the basic materials sector and energy industry. Shares are up 1.4% year to date as of the close of trading on Friday.

You can view the full Denbury 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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