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 37 U.S. common stocks for week ending September 28, 2012. 22 stocks were upgraded and 15 stocks were downgraded by our stock model.

Rating Change #10

Ciena Corporation ( CIEN) has been downgraded by TheStreet Ratings from hold to sell. The area that we feel has been the company's primary weakness has been its poor profit margins.

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Highlights from the ratings report include:
  • 42.40% is the gross profit margin for CIENA CORP which we consider to be strong. Regardless of CIEN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CIEN's net profit margin of -6.30% significantly underperformed when compared to the industry average.
  • The stock price has risen over the past year, but it has underperformed the S&P 500 so far. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
  • 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 Communications Equipment industry average. The net income increased by 5.2% when compared to the same quarter one year prior, going from -$31.45 million to -$29.82 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 14.0%. Since the same quarter one year prior, revenues slightly increased by 8.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • CIENA CORP has improved earnings per share by 9.1% 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, CIENA CORP continued to lose money by earning -$2.06 versus -$3.59 in the prior year. This year, the market expects an improvement in earnings (-$0.23 versus -$2.06).
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Ciena Corporation provides equipment, software, and service solutions that support the transport, switching, aggregation, and management of voice, video, and data traffic on communications networks worldwide. Ciena has a market cap of $1.3 billion and is part of the technology sector and telecommunications industry. Shares are up 7.1% year to date as of the close of trading on Friday.

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

Rating Change #9

Universal Display Corporation ( PANL) 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 impressive record of earnings per share growth. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and premium valuation.

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Highlights from the ratings report include:
  • PANL's very impressive revenue growth greatly exceeded the industry average of 3.7%. Since the same quarter one year prior, revenues leaped by 166.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • PANL has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 17.19, which clearly demonstrates the ability to cover short-term cash needs.
  • PANL'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 33.63%, 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. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.
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Universal Display Corporation engages in the research, development, and commercialization of organic light emitting diode (OLED) technologies and materials for use in flat panel display, solid-state lighting, and other product applications. The company has a P/E ratio of 73.4, below the average computer hardware industry P/E ratio of 78.3 and above the S&P 500 P/E ratio of 17.7. Universal Display has a market cap of $1.64 billion and is part of the technology sector and computer hardware industry. Shares are down 4% year to date as of the close of trading on Friday.

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

Rating Change #8

EchoStar Corp ( SATS) 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, solid stock price performance and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity 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 14.0%. Since the same quarter one year prior, revenues rose by 38.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The strong earnings growth this company has enjoyed -- up -- has apparently played a role in driving up its share price by a solid 27.90%. In addition, the rise in the general market has likely contributed to this stock's strong performance during this past year.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.
  • ECHOSTAR CORP 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, ECHOSTAR CORP reported lower earnings of $0.03 versus $2.39 in the prior year. This year, the market expects an improvement in earnings ($2.14 versus $0.03).
  • The gross profit margin for ECHOSTAR CORP is currently lower than what is desirable, coming in at 33.40%. Regardless of SATS's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, SATS's net profit margin of 4.40% is significantly lower than the same period one year prior.
  • 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 Communications Equipment industry and the overall market, ECHOSTAR CORP's return on equity significantly trails that of both the industry average and the S&P 500.

EchoStar Corporation, together with its subsidiaries, engages in the design, development, and distribution of digital set-top boxes and related products. The company has a P/E ratio of 19.4, above the average telecommunications industry P/E ratio of 19.2 and above the S&P 500 P/E ratio of 17.7. EchoStar has a market cap of $1.13 billion and is part of the technology sector and telecommunications industry. Shares are up 36.9% year to date as of the close of trading on Wednesday.

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

Rating Change #7

Harmony Gold Mining Co. Ltd ( HMY) 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, reasonable valuation levels and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, weak operating cash flow and poor profit margins.

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Highlights from the ratings report include:
  • 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 1.24, which illustrates the ability to avoid short-term cash problems.
  • HARMONY GOLD MINING CO LTD 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, HARMONY GOLD MINING CO LTD increased its bottom line by earning $0.56 versus $0.24 in the prior year. This year, the market expects an improvement in earnings ($0.95 versus $0.56).
  • Net operating cash flow has decreased to $99.74 million or 34.21% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, HARMONY GOLD MINING CO LTD has marginally lower results.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Metals & Mining industry. The net income has significantly decreased by 150.8% when compared to the same quarter one year ago, falling from -$6.06 million to -$15.19 million.
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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 44.7, above the average metals & mining industry P/E ratio of 11.5 and above the S&P 500 P/E ratio of 17.7. Harmony has a market cap of $3.66 billion and is part of the basic materials sector and metals & mining industry. Shares are down 27.1% year to date as of the close of trading on Friday.

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

Rating Change #6

Encana Corp ( ECA) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, poor profit margins and weak operating cash flow.

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Highlights from the ratings report include:
  • ENCANA 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. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, ENCANA CORP reported lower earnings of $0.15 versus $2.00 in the prior year.
  • 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 Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 942.0% when compared to the same quarter one year ago, falling from $176.00 million to -$1,482.00 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, ENCANA CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for ENCANA CORP is rather low; currently it is at 21.80%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -202.70% is significantly below that of the industry average.
  • Net operating cash flow has decreased to $631.00 million or 34.47% 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.
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Encana Corporation and its subsidiaries engage in the exploration for, development, production, and marketing of natural gas, oil, and natural gas liquids. Encana has a market cap of $16.09 billion and is part of the basic materials sector and energy industry. Shares are up 17.9% year to date as of the close of trading on Friday.

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

Rating Change #5

AECOM Technology Corporation ( ACM) 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, attractive valuation levels, good cash flow from operations, increase in stock price during the past year and growth in earnings per share. 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:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 9.5%. Since the same quarter one year prior, revenues slightly increased by 2.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Net operating cash flow has significantly increased by 1169.34% to $201.97 million when compared to the same quarter last year. In addition, AECOM TECHNOLOGY CORP has also vastly surpassed the industry average cash flow growth rate of 24.53%.
  • The stock price has risen over the past year, but, despite its earnings growth and some other positive factors, it has underperformed the S&P 500 so far. 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.
  • AECOM TECHNOLOGY CORP'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. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, AECOM TECHNOLOGY CORP increased its bottom line by earning $2.34 versus $2.05 in the prior year. For the next year, the market is expecting a contraction of 1.7% in earnings ($2.30 versus $2.34).
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AECOM Technology Corporation provides professional technical and management support services for commercial and government clients worldwide. The company has a P/E ratio of 9.4, equal to the average diversified services industry P/E ratio and below the S&P 500 P/E ratio of 17.7. AECOM Technology has a market cap of $2.36 billion and is part of the services sector and diversified services industry. Shares are up 1.5% year to date as of the close of trading on Friday.

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

Rating Change #4

Global Payments Inc ( GPN) 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 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:
  • The revenue growth came in higher than the industry average of 7.3%. Since the same quarter one year prior, revenues slightly increased by 8.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The current debt-to-equity ratio, 0.47, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.20, which illustrates the ability to avoid short-term cash problems.
  • Net operating cash flow has significantly increased by 111.32% to $68.63 million when compared to the same quarter last year. In addition, GLOBAL PAYMENTS INC has also vastly surpassed the industry average cash flow growth rate of 0.61%.
  • The gross profit margin for GLOBAL PAYMENTS INC is rather high; currently it is at 69.40%. 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 7.90% trails the industry average.
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Global Payments Inc. The company has a P/E ratio of 18.3, equal to the average diversified services industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Global Payments has a market cap of $3.41 billion and is part of the services sector and diversified services industry. Shares are down 7.6% year to date as of the close of trading on Friday.

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

Rating Change #3

MetroPCS Communications Inc ( PCS) 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, increase in stock price during the past year, attractive valuation levels, compelling growth in net income and expanding profit margins. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

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Highlights from the ratings report include:
  • PCS's revenue growth has slightly outpaced the industry average of 0.9%. Since the same quarter one year prior, revenues slightly increased by 5.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The strong earnings growth this company has enjoyed -- up -- has apparently played a role in driving up its share price by a solid 26.67%. In addition, the rise in the general market has likely contributed to this stock's strong performance during this past year.Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Wireless Telecommunication Services industry. The net income increased by 76.5% when compared to the same quarter one year prior, rising from $84.34 million to $148.84 million.
  • 49.70% is the gross profit margin for METROPCS COMMUNICATIONS 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 11.60% trails the industry average.

MetroPCS Communications, Inc., a wireless telecommunications carrier, together with its subsidiaries, provides wireless broadband mobile services in the United States. The company has a P/E ratio of 13.1, above the average telecommunications industry P/E ratio of 12.9 and below the S&P 500 P/E ratio of 17.7. MetroPCS has a market cap of $4.28 billion and is part of the technology sector and telecommunications industry. Shares are up 35.7% year to date as of the close of trading on Wednesday.

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

Rating Change #2

L-3 Communications Holdings Inc ( LLL) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and increase in stock price during the past year. 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:
  • 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.
  • 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.
  • LLL, with its decline in revenue, slightly underperformed the industry average of 3.3%. 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.
  • L-3 COMMUNICATIONS HLDGS INC's earnings per share declined by 8.0% 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, L-3 COMMUNICATIONS HLDGS INC increased its bottom line by earning $9.07 versus $8.26 in the prior year. For the next year, the market is expecting a contraction of 13.4% in earnings ($7.85 versus $9.07).

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 eight, equal to the average aerospace/defense industry P/E ratio and below the S&P 500 P/E ratio of 17.7. L-3 has a market cap of $6.97 billion and is part of the industrial goods sector and aerospace/defense industry. Shares are up 7.9% year to date as of the close of trading on Wednesday.

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

Rating Change #1

Virgin Media Inc ( VMED) 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 and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

  • ACTIVE STOCK TRADERS: Get full access to Jim Cramer's thoughts for less than $3/week - sometimes before he says them on TV! Start with a 14-Day Free Trial.

Highlights from the ratings report include:
  • The gross profit margin for VIRGIN MEDIA INC is rather high; currently it is at 60.80%. 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 6.40% trails the industry average.
  • VIRGIN MEDIA INC'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. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, VIRGIN MEDIA INC turned its bottom line around by earning $0.37 versus -$0.80 in the prior year. This year, the market expects an improvement in earnings ($108.96 versus $0.37).
  • VMED, with its decline in revenue, underperformed when compared the industry average of 10.5%. Since the same quarter one year prior, revenues slightly dropped by 0.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Looking ahead, the stock's 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 the other strengths this company displays justify these higher price levels.
  • Net operating cash flow has decreased to $356.01 million or 21.57% 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.
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Virgin Media Inc., through its subsidiaries, provides entertainment and communications services in the United Kingdom. Virgin Media has a market cap of $7.87 billion and is part of the services sector and media industry. Shares are up 38.8% year to date as of the close of trading on Friday.

You can view the full Virgin Media 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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