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 50 U.S. common stocks for week ending September 14, 2012. 36 stocks were upgraded and 14 stocks were downgraded by our stock model.

Rating Change #10

Reading International Inc ( RDI) has been downgraded by TheStreet Ratings from buy to hold. Among the primary strengths of the company is its solid stock price performance. At the same time, however, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.

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Highlights from the ratings report include:
  • Compared to its closing price of one year ago, RDI's share price has jumped by 50.81%, 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.
  • READING INTL 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. 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, READING INTL INC turned its bottom line around by earning $0.36 versus -$0.55 in the prior year.
  • Net operating cash flow has decreased to $6.02 million or 37.61% 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 Media industry. The net income has significantly decreased by 98.6% when compared to the same quarter one year ago, falling from $17.43 million to $0.24 million.

Reading International, Inc., together with its subsidiaries, engages in the development, ownership, and operation of entertainment and real property assets in the United States, Australia, and New Zealand. Reading International has a market cap of $140 million and is part of the services sector and media industry. Shares are up 52.6% year to date as of the close of trading on Friday.

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

Rating Change #9

Pernix Therapeutics Holdings Inc ( PTX) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself, feeble growth in its earnings per share, deteriorating net income, disappointing return on equity and weak operating cash flow.

Highlights from the ratings report include:
  • The share price of PERNIX THERAPEUTICS HOLDINGS has not done very well: it is down 16.59% 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.
  • PERNIX THERAPEUTICS HOLDINGS 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. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, PERNIX THERAPEUTICS HOLDINGS reported lower earnings of $0.34 versus $0.42 in the prior year. For the next year, the market is expecting a contraction of 38.2% in earnings ($0.21 versus $0.34).
  • 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 Pharmaceuticals industry. The net income has significantly decreased by 162.1% when compared to the same quarter one year ago, falling from $1.50 million to -$0.93 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. In comparison to the other companies in the Pharmaceuticals industry and the overall market, PERNIX THERAPEUTICS HOLDINGS's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • Net operating cash flow has significantly decreased to $1.62 million or 53.89% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

Pernix Therapeutics Holdings, Inc., a pharmaceutical company, focuses on developing, marketing, and selling branded and generic pharmaceutical products for pediatric and adult indications in various therapeutic areas. The company has a P/E ratio of 29.1, equal to the average drugs industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Pernix has a market cap of $202.9 million and is part of the health care sector and drugs industry. Shares are down 24.6% year to date as of the close of trading on Tuesday.

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

Rating Change #8

Titan Machinery Inc ( TITN) 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 good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, generally higher debt management risk and poor profit margins.

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Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 16.9%. Since the same quarter one year prior, revenues rose by 31.9%. 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.
  • TITAN MACHINERY INC's earnings per share declined by 16.7% 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, TITAN MACHINERY INC increased its bottom line by earning $2.15 versus $1.23 in the prior year. This year, the market expects earnings to be in line with last year ($2.15 versus $2.15).
  • 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 Trading Companies & Distributors industry. The net income has decreased by 17.2% when compared to the same quarter one year ago, dropping from $6.29 million to $5.21 million.
  • The debt-to-equity ratio is very high at 2.46 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.25, which clearly demonstrates the inability to cover short-term cash needs.

Titan Machinery Inc. owns and operates a network of full service agricultural and construction equipment stores in the United States and Europe. It engages in the sale of new and used equipment. The company has a P/E ratio of 9.3, above the average specialty retail industry P/E ratio of 9.1 and below the S&P 500 P/E ratio of 17.7. Titan Machinery has a market cap of $406.6 million and is part of the services sector and specialty retail industry. Shares are down 10.7% year to date as of the close of trading on Wednesday.

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

Rating Change #7

South Jersey Industries ( SJI) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income and notable return on equity. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and poor profit margins.

Highlights from the ratings report include:
  • SOUTH JERSEY INDUSTRIES 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. This trend suggests that the performance of the business is improving. During the past fiscal year, SOUTH JERSEY INDUSTRIES INC increased its bottom line by earning $2.99 versus $2.26 in the prior year. This year, the market expects an improvement in earnings ($3.06 versus $2.99).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Gas Utilities industry. The net income increased by 70.0% when compared to the same quarter one year prior, rising from $6.08 million to $10.33 million.
  • 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. 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 gross profit margin for SOUTH JERSEY INDUSTRIES INC is rather low; currently it is at 17.00%. Regardless of SJI's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, SJI's net profit margin of 8.50% compares favorably to the industry average.
  • Even though the current debt-to-equity ratio is 1.32, it is still below the industry average, suggesting that this level of debt is acceptable within the Gas Utilities industry. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 0.31 is very low and demonstrates very weak liquidity.

South Jersey Industries, Inc., through its subsidiaries, engages in the purchase, transmission, and sale of natural gas for residential, commercial, and industrial customers. The company has a P/E ratio of 16.2, equal to the average utilities industry P/E ratio and below the S&P 500 P/E ratio of 17.7. South Jersey has a market cap of $1.59 billion and is part of the utilities sector and utilities industry. Shares are down 9.4% year to date as of the close of trading on Tuesday.

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

Rating Change #6

Realpage Inc ( RP) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity and feeble growth in its earnings per share.

Highlights from the ratings report include:
  • 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 Software industry. The net income has significantly decreased by 941.1% when compared to the same quarter one year ago, falling from $0.28 million to -$2.37 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Software industry and the overall market, REALPAGE INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • REALPAGE INC's earnings have gone downhill when comparing its most recently reported quarter with the same quarter a year earlier. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, REALPAGE INC reported poor results of -$0.03 versus $0.00 in the prior year. This year, the market expects an improvement in earnings ($0.48 versus -$0.03).
  • RP's debt-to-equity ratio is very low at 0.15 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 0.93 is somewhat weak and could be cause for future problems.
  • The gross profit margin for REALPAGE INC is rather high; currently it is at 64.60%. 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 -3.00% is in-line with the industry average.

RealPage, Inc. provides on demand software solutions for the rental housing industry in North America. Realpage has a market cap of $1.89 billion and is part of the technology sector and computer software & services industry. Shares are down 0.1% year to date as of the close of trading on Tuesday.

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

Rating Change #5

Tiffany & Co ( TIF) 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, growth in earnings per share, notable return on equity, 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 shows weak operating cash flow.

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Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 11.5%. Since the same quarter one year prior, revenues slightly increased by 1.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • TIFFANY & CO's earnings per share improvement from the most recent quarter was slightly positive. 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, TIFFANY & CO increased its bottom line by earning $3.41 versus $2.87 in the prior year. This year, the market expects an improvement in earnings ($3.60 versus $3.41).
  • 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 Specialty Retail industry and the overall market on the basis of return on equity, TIFFANY & CO has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • The gross profit margin for TIFFANY & CO is rather high; currently it is at 60.80%. Regardless of TIF's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, TIF's net profit margin of 10.40% compares favorably to the industry average.
  • 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. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.07 is sturdy.

Tiffany & Co., through its subsidiaries, engages in the design, manufacture, and retail of fine jewelry worldwide. The company has a P/E ratio of 18.2, equal to the average specialty retail industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Tiffany has a market cap of $7.92 billion and is part of the services sector and specialty retail industry. Shares are down 5.6% year to date as of the close of trading on Friday.

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

Rating Change #4

Gerdau SA ( GGB) 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, good cash flow from operations, 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 has had somewhat disappointing return on equity.

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Highlights from the ratings report include:
  • Net operating cash flow has significantly increased by 189.40% to $478.88 million when compared to the same quarter last year. In addition, GERDAU SA has also vastly surpassed the industry average cash flow growth rate of -26.65%.
  • GGB's share price has surged by 25.70% over the past year, reflecting the market's general trend, despite their weak earnings growth during the last quarter. Regarding the stock's future course, although almost any stock can fall in a broad market decline, GGB should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • GERDAU SA's earnings per share declined by 21.1% 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, GERDAU SA reported lower earnings of $0.64 versus $0.90 in the prior year. This year, the market expects an improvement in earnings ($1.09 versus $0.64).
  • GGB, with its decline in revenue, underperformed when compared the industry average of 14.4%. Since the same quarter one year prior, revenues fell by 25.2%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.

Gerdau S.A. engages in the production and sale of steel products in Brazil and internationally. The company has a P/E ratio of eight, below the average metals & mining industry P/E ratio of 15.4 and below the S&P 500 P/E ratio of 17.7. Gerdau has a market cap of $16.58 billion and is part of the basic materials sector and metals & mining industry. Shares are up 31.5% year to date as of the close of trading on Friday.

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

Rating Change #3

Symantec Corp ( SYMC) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, attractive valuation levels, increase in stock price during the past year and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

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Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 6.3%. Since the same quarter one year prior, revenues slightly increased by 0.9%. 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.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Software industry and the overall market, SYMANTEC CORP's return on equity exceeds that of both the industry average and the S&P 500.
  • SYMANTEC CORP' earnings per share from the most recent quarter came in slightly below the year earlier quarter. 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, SYMANTEC CORP increased its bottom line by earning $1.57 versus $0.76 in the prior year. This year, the market expects an improvement in earnings ($1.64 versus $1.57).
  • 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. 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.

Symantec Corporation provides security, storage, and systems management solutions to various organization and consumers worldwide. It operates in four segments: Consumer, Security and Compliance, Storage and Server Management, and Services. The company has a P/E ratio of 12.2, below the average computer software & services industry P/E ratio of 12.3 and below the S&P 500 P/E ratio of 17.7. Symantec has a market cap of $13.34 billion and is part of the technology sector and computer software & services industry. Shares are up 21.8% year to date as of the close of trading on Thursday.

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

Rating Change #2

Marathon Petroleum Corp ( MPC) 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, growth in earnings per share and notable return on equity. 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:
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 44.04% over the past year, a rise that has exceeded that of the S&P 500 Index. Although MPC had significant growth over the past year, our hold rating indicates that we do not recommend additional investment in this stock at the current time.
  • MARATHON PETROLEUM CORP has improved earnings per share by 6.3% in the most recent quarter compared to the same quarter a year ago. This year, the market expects an improvement in earnings ($7.62 versus $5.19).
  • The current debt-to-equity ratio, 0.32, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.87 is somewhat weak and could be cause for future problems.
  • MPC, with its decline in revenue, slightly underperformed the industry average of 1.3%. Since the same quarter one year prior, revenues slightly dropped by 3.5%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • The gross profit margin for MARATHON PETROLEUM CORP is currently extremely low, coming in at 10.10%. Regardless of MPC's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 4.30% trails the industry average.

Marathon Petroleum Corporation, together with its subsidiaries, engages in refining, transporting, and marketing petroleum products primarily in the United States. The company has a P/E ratio of 7.4, above the average energy industry P/E ratio of 7.2 and below the S&P 500 P/E ratio of 17.7. Marathon has a market cap of $17.23 billion and is part of the basic materials sector and energy industry. Shares are up 55.9% year to date as of the close of trading on Tuesday.

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

Rating Change #1

Hess Corp ( HES) 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.

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Highlights from the ratings report include:
  • HESS CORP's earnings per share declined by 9.6% 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, HESS CORP reported lower earnings of $5.01 versus $6.50 in the prior year. This year, the market expects an improvement in earnings ($5.95 versus $5.01).
  • HES, with its decline in revenue, slightly underperformed the industry average of 1.1%. Since the same quarter one year prior, revenues slightly dropped by 5.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The gross profit margin for HESS CORP is currently lower than what is desirable, coming in at 28.10%. Regardless of HES's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 5.90% trails the industry average.
  • Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, HES has underperformed the S&P 500 Index, declining 6.81% from its price level of one year ago. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.
  • 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 HES's debt-to-equity ratio is mixed in its results, the company's quick ratio of 0.69 is low and demonstrates weak liquidity.

Hess Corporation, together with its subsidiaries, operates as an integrated energy company. The company operates in two segments, Exploration and Production (E&P) and Marketing and Refining (M&R). The company has a P/E ratio of 14.8, equal to the average energy industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Hess has a market cap of $18.71 billion and is part of the basic materials sector and energy industry. Shares are down 3.6% year to date as of the close of trading on Friday.

You can view the full Hess 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.

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model

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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