TheStreet Ratings Top 10 Rating Changes

NEW YORK ( TheStreet Ratings) -- Every trading day TheStreet Ratings' stock model reviews the investment ratings on around 4,600 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 105 U.S. common stocks for week ending November 9, 2012. 43 stocks were upgraded and 62 stocks were downgraded by our stock model.

Rating Change #10

Hologic Inc ( HOLX) 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 expanding profit margins. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and weak operating cash flow.

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Highlights from the ratings report include:
  • HOLX's revenue growth has slightly outpaced the industry average of 4.7%. Since the same quarter one year prior, revenues slightly increased by 4.2%. 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.
  • Despite currently having a low debt-to-equity ratio of 0.51, 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 HOLX's debt-to-equity ratio is mixed in its results, the company's quick ratio of 2.23 is high and demonstrates strong liquidity.
  • 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 Health Care Equipment & Supplies industry. The net income has significantly decreased by 34.8% when compared to the same quarter one year ago, falling from $36.20 million to $23.59 million.
  • Net operating cash flow has decreased to $71.80 million or 40.13% 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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Hologic Inc. develops, manufactures, and supplies diagnostic, medical imaging systems, and surgical products for the healthcare needs of women. The company operates in four segments: Breast Health, Diagnostics, GYN Surgical, and Skeletal Health. The company has a P/E ratio of 169.5, above the S&P 500 P/E ratio of 17.7. Hologic has a market cap of $5.38 billion and is part of the health care sector and health services industry. Shares are up 16.2% year to date as of the close of trading on Friday.

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

Rating Change #9

Western Union Company ( WU) 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, increase in net income and attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and a generally disappointing performance in the stock itself.

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Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 10.1%. Since the same quarter one year prior, revenues slightly increased by 0.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the IT Services industry average. The net income increased by 12.4% when compared to the same quarter one year prior, going from $239.70 million to $269.50 million.
  • WESTERN UNION CO has improved earnings per share by 18.4% 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. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, WESTERN UNION CO increased its bottom line by earning $1.84 versus $1.36 in the prior year. For the next year, the market is expecting a contraction of 8.7% in earnings ($1.68 versus $1.84).
  • WU'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 28.52%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • The debt-to-equity ratio is very high at 2.99 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.
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The Western Union Company provides money movement and payment services worldwide. The company operates in two segments, Consumer-to-Consumer and Global Business Payments. The company has a P/E ratio of six, below the S&P 500 P/E ratio of 17.7. Western Union has a market cap of $7.36 billion and is part of the services sector and diversified services industry. Shares are down 33.1% year to date as of the close of trading on Wednesday.

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

Rating Change #8

Gerdau SA ( GGB) 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, attractive valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, poor profit margins and a generally disappointing performance in the stock itself.

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Highlights from the ratings report include:
  • GGB's very impressive revenue growth greatly exceeded the industry average of 20.6%. Since the same quarter one year prior, revenues leaped by 52.9%. 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.
  • Despite currently having a low debt-to-equity ratio of 0.55, 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 1.01 is sturdy.
  • 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. When compared to other companies in the Metals & Mining industry and the overall market, GERDAU SA's return on equity is below that of both the industry average and the S&P 500.
  • The gross profit margin for GERDAU SA is rather low; currently it is at 16.90%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 3.90% significantly trails the industry average.
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Gerdau S.A. engages in the production and sale of steel products in Brazil and internationally. The company has a P/E ratio of 7.2, below the S&P 500 P/E ratio of 17.7. Gerdau has a market cap of $14.91 billion and is part of the basic materials sector and metals & mining industry. Shares are up 12.2% year to date as of the close of trading on Tuesday.

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

Rating Change #7

Baker Hughes Inc ( BHI) 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 reasonable valuation levels. However, as a counter to these strengths, 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:
  • BHI's revenue growth trails the industry average of 16.5%. Since the same quarter one year prior, revenues slightly increased by 3.2%. 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 current debt-to-equity ratio, 0.30, 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 1.33, which illustrates the ability to avoid short-term cash problems.
  • 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 Energy Equipment & Services industry. The net income has significantly decreased by 60.5% when compared to the same quarter one year ago, falling from $706.00 million to $279.00 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. When compared to other companies in the Energy Equipment & Services industry and the overall market, BAKER HUGHES INC's return on equity is below that of both the industry average and the S&P 500.
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Baker Hughes Incorporated supplies oilfield services, products, and technology services and systems to the oil and natural gas industry worldwide. The company has a P/E ratio of 13.4, below the S&P 500 P/E ratio of 17.7. Baker Hughes has a market cap of $18.76 billion and is part of the basic materials sector and energy industry. Shares are down 12.3% year to date as of the close of trading on Thursday.

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

Rating Change #6

ArcelorMittal SA ( MT) 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:
  • ARCELORMITTAL SA 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, ARCELORMITTAL SA reported lower earnings of $0.86 versus $1.67 in the prior year. For the next year, the market is expecting a contraction of 61.6% in earnings ($0.33 versus $0.86).
  • 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 207.6% when compared to the same quarter one year ago, falling from $659.00 million to -$709.00 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. Compared to other companies in the Metals & Mining industry and the overall market on the basis of return on equity, ARCELORMITTAL SA underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • The gross profit margin for ARCELORMITTAL SA is currently extremely low, coming in at 6.50%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -3.60% is significantly below that of the industry average.
  • Net operating cash flow has significantly decreased to -$789.00 million or 202.46% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
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ArcelorMittal, together with its subsidiaries, operates as an integrated steel and mining company worldwide. The company has a P/E ratio of 16.7, below the S&P 500 P/E ratio of 17.7. ArcelorMittal has a market cap of $23.33 billion and is part of the basic materials sector and metals & mining industry. Shares are down 17.3% year to date as of the close of trading on Tuesday.

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

Rating Change #5

Calpine Corp ( CPN) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, expanding profit margins and good cash flow from operations. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet.

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Highlights from the ratings report include:
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Independent Power Producers & Energy Traders industry. The net income increased by 130.0% when compared to the same quarter one year prior, rising from $190.00 million to $437.00 million.
  • 44.90% is the gross profit margin for CALPINE CORP which we consider to be strong. It has increased significantly from the same period last year. Along with this, the net profit margin of 21.90% significantly outperformed against the industry average.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. 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.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Independent Power Producers & Energy Traders industry and the overall market on the basis of return on equity, CALPINE CORP underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • The debt-to-equity ratio is very high at 2.63 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Even though the debt-to-equity ratio is weak, CPN's quick ratio is somewhat strong at 1.30, demonstrating the ability to handle short-term liquidity needs.
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Calpine Corporation, an independent wholesale power generation company, owns and operates natural gas-fired and geothermal power plants in North America. It operates natural gas-fired combustion turbines and renewable geothermal conventional steam turbines, as well as cogeneration power plants. The company has a P/E ratio of 100.2, above the S&P 500 P/E ratio of 17.7. Calpine has a market cap of $8.41 billion and is part of the utilities sector and utilities industry. Shares are up 10.4% year to date as of the close of trading on Thursday.

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

Rating Change #4

Sun Life Financial Inc ( SLF) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, increase in net income, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and growth in earnings per share. 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:
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. 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.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Insurance industry. The net income increased by 169.1% when compared to the same quarter one year prior, rising from -$596.00 million to $412.00 million.
  • SLF's debt-to-equity ratio is very low at 0.30 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
  • The revenue fell significantly faster than the industry average of 21.6%. Since the same quarter one year prior, revenues fell by 30.2%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
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Sun Life Financial Inc., an international financial services organization, provides a range of protection and wealth accumulation products and services to individuals and corporate customers. The company has a P/E ratio of -34.2, below the S&P 500 P/E ratio of 17.7. Sun Life Financial has a market cap of $15.12 billion and is part of the financial sector and insurance industry. Shares are up 32.1% year to date as of the close of trading on Thursday.

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

Rating Change #3

Annaly Capital Management Inc ( NLY) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, attractive valuation levels, growth in earnings per share, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

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Highlights from the ratings report include:
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income increased by 124.4% when compared to the same quarter one year prior, rising from -$921.81 million to $224.76 million.
  • ANNALY CAPITAL MANAGEMENT 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, ANNALY CAPITAL MANAGEMENT reported lower earnings of $0.49 versus $1.90 in the prior year. This year, the market expects an improvement in earnings ($1.79 versus $0.49).
  • The gross profit margin for ANNALY CAPITAL MANAGEMENT is currently very high, coming in at 93.20%. Regardless of NLY's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, NLY's net profit margin of 24.10% compares favorably to the industry average.
  • NLY, with its decline in revenue, underperformed when compared the industry average of 16.5%. Since the same quarter one year prior, revenues fell by 11.4%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
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Annaly Capital Management, Inc., a real estate investment trust, engages in the ownership, management, and financing of a portfolio of investment securities. The company has a P/E ratio of 106.2, above the S&P 500 P/E ratio of 17.7. Annaly Capital Management has a market cap of $15.53 billion and is part of the financial sector and real estate industry. Shares are down 0.2% year to date as of the close of trading on Tuesday.

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

Rating Change #2

Transocean Ltd ( RIG) 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, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and a generally disappointing performance in the stock itself.

  • EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass.

Highlights from the ratings report include:
  • RIG's revenue growth has slightly outpaced the industry average of 16.6%. Since the same quarter one year prior, revenues rose by 22.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Net operating cash flow has significantly increased by 59.75% to $786.00 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 21.78%.
  • TRANSOCEAN LTD 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, TRANSOCEAN LTD swung to a loss, reporting -$17.76 versus $2.85 in the prior year. This year, the market expects an improvement in earnings ($2.94 versus -$17.76).
  • 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 Energy Equipment & Services industry and the overall market, TRANSOCEAN LTD'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 Energy Equipment & Services industry. The net income has significantly decreased by 1090.6% when compared to the same quarter one year ago, falling from -$32.00 million to -$381.00 million.
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Transocean Ltd. provides offshore contract drilling services for oil and gas wells worldwide. It offers deepwater and harsh environment drilling, oil and gas drilling management, and drilling engineering and drilling project management services. The company has a P/E ratio of -2.6, below the S&P 500 P/E ratio of 17.7. Transocean has a market cap of $17.48 billion and is part of the basic materials sector and energy industry. Shares are up 26.7% year to date as of the close of trading on Wednesday.

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

Rating Change #1

Manulife Financial Corporation ( MFC) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its increase in net income, reasonable valuation levels and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, poor profit margins and a generally disappointing performance in the stock itself.

  • EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass.

Highlights from the ratings report include:
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Insurance industry average. The net income increased by 82.2% when compared to the same quarter one year prior, rising from -$1,277.00 million to -$227.00 million.
  • MANULIFE FINANCIAL CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. During the past fiscal year, MANULIFE FINANCIAL CORP turned its bottom line around by earning $0.01 versus -$0.27 in the prior year.
  • The gross profit margin for MANULIFE FINANCIAL CORP is currently extremely low, coming in at 11.50%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, MFC's net profit margin of -3.10% significantly underperformed when compared to the industry average.
  • 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. Compared to other companies in the Insurance industry and the overall market on the basis of return on equity, MANULIFE FINANCIAL CORP underperformed against that of the industry average and is significantly less than that of the S&P 500.
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Manulife Financial Corporation, together with its subsidiaries, provides financial protection and wealth management products and services to individuals and group customers primarily in Asia, Canada, and the United States. The company has a P/E ratio of -40.3, below the S&P 500 P/E ratio of 17.7. Manulife Financial has a market cap of $22 billion and is part of the financial sector and insurance industry. Shares are up 13.7% year to date as of the close of trading on Friday.

You can view the full Manulife Financial 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.