TheStreet Ratings Top 10 Rating Changes

NEW YORK ( TheStreet Ratings) -- Every trading day TheStreet Ratings' stock model reviews the investment ratings on around 4,300 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 84 U.S. common stocks for week ending February 1, 2013. 67 stocks were upgraded and 17 stocks were downgraded by our stock model.

Rating Change #10

Canon Inc ( CAJ) 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, expanding profit margins and attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, disappointing return on equity and weak operating cash flow.

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Highlights from the ratings report include:
  • CAJ's debt-to-equity ratio is very low at 0.00 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 1.31, which illustrates the ability to avoid short-term cash problems.
  • The gross profit margin for CANON INC is rather high; currently it is at 56.30%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 6.28% is above that of the industry average.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 17.8%. Since the same quarter one year prior, revenues fell by 16.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Net operating cash flow has significantly decreased to $880.79 million or 57.66% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, CANON INC has marginally lower results.
  • 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 Office Electronics industry and the overall market, CANON INC's return on equity is below that of both the industry average and the S&P 500.
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Canon Inc. engages in the manufacture and sale of network digital multifunction devices (MFDs), plain paper copying machines, laser printers, inkjet printers, cameras, and lithography equipment worldwide. The company has a P/E ratio of 15.1, below the S&P 500 P/E ratio of 17.7. Canon has a market cap of $42.65 billion and is part of the consumer goods sector and consumer durables industry. Shares are down 5.6% year to date as of the close of trading on Tuesday.

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

Rating Change #9

Hawaiian Holdings Inc ( HA) has been downgraded by TheStreet Ratings from buy 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 poor profit margins and a generally disappointing performance in the stock itself.

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Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 15.9%. Since the same quarter one year prior, revenues rose by 15.4%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • HAWAIIAN HOLDINGS 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 reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, HAWAIIAN HOLDINGS INC turned its bottom line around by earning $1.00 versus -$0.07 in the prior year. This year, the market expects an improvement in earnings ($1.35 versus $1.00).
  • The change in net income from the same quarter one year ago has significantly exceeded that of the Airlines industry average, but is less than that of the S&P 500. The net income has significantly decreased by 116.3% when compared to the same quarter one year ago, falling from $20.92 million to -$3.41 million.
  • In its most recent trading session, HA has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • The gross profit margin for HAWAIIAN HOLDINGS INC is rather low; currently it is at 21.40%. It has decreased from the same quarter the previous year.
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Hawaiian Holdings, Inc., through its subsidiary, Hawaiian Airlines, Inc., engages in the scheduled air transportation of passengers and cargo. The company has a P/E ratio of 4.4, below the S&P 500 P/E ratio of 17.7. Hawaiian has a market cap of $336.1 million and is part of the services sector and transportation industry. Shares are down 0.5% year to date as of the close of trading on Wednesday.

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

Rating Change #8

HF Financial Corp ( HFFC) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income and attractive valuation levels. However, as a counter to these strengths, we find that the growth in the company's earnings per share has not been good.

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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. Looking ahead, our view is that this company's fundamentals will not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.
  • The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Thrifts & Mortgage Finance industry average. The net income increased by 44.5% when compared to the same quarter one year prior, rising from $0.72 million to $1.03 million.
  • The gross profit margin for HF FINANCIAL CORP is currently very high, coming in at 78.40%. It has increased significantly from the same period last year. Despite the strong results of the gross profit margin, HFFC's net profit margin of 8.01% significantly trails the industry average.
  • HF 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. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, HF FINANCIAL CORP increased its bottom line by earning $0.74 versus $0.10 in the prior year.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. When compared to other companies in the Thrifts & Mortgage Finance industry and the overall market, HF FINANCIAL CORP's return on equity is below that of both the industry average and the S&P 500.
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HF Financial Corp. operates as the holding company for Home Federal Bank that provides consumer and commercial business banking services in the United States. The company offers deposit accounts, such as savings accounts, checking accounts, money market accounts, and certificate of deposits. The company has a P/E ratio of 16.1, below the S&P 500 P/E ratio of 17.7. HF Financial has a market cap of $93 million and is part of the financial sector and banking industry. Shares are up 0.6% year to date as of the close of trading on Wednesday.

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

Rating Change #7

Vertex Pharmaceuticals ( VRTX) 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, poor profit margins and disappointing return on equity.

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Highlights from the ratings report include:
  • VERTEX PHARMACEUTICALS 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. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, VERTEX PHARMACEUTICALS INC swung to a loss, reporting -$0.50 versus $0.04 in the prior year. For the next year, the market is expecting a contraction of 48.0% in earnings (-$0.74 versus -$0.50).
  • 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 Biotechnology industry. The net income has significantly decreased by 148.0% when compared to the same quarter one year ago, falling from $158.63 million to -$76.15 million.
  • The gross profit margin for VERTEX PHARMACEUTICALS INC is currently lower than what is desirable, coming in at 26.50%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -22.79% is significantly below that of the industry average.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. When compared to other companies in the Biotechnology industry and the overall market, VERTEX PHARMACEUTICALS INC's return on equity has significantly outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • The revenue fell significantly faster than the industry average of 2.9%. Since the same quarter one year prior, revenues fell by 40.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
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Vertex Pharmaceuticals Incorporated engages in discovering, developing, manufacturing, and commercializing small molecule drugs for the treatment of serious diseases worldwide. The company has a P/E ratio of 74.1, above the S&P 500 P/E ratio of 17.7. Vertex has a market cap of $9.96 billion and is part of the health care sector and drugs industry. Shares are up 9.6% year to date as of the close of trading on Wednesday.

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

Rating Change #6

Methanex Corporation ( MEOH) 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 feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.

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Highlights from the ratings report include:
  • Compared to its closing price of one year ago, MEOH's share price has jumped by 31.91%, 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.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 0.9%. Since the same quarter one year prior, revenues slightly dropped by 0.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The debt-to-equity ratio of 1.01 is relatively high when compared with the industry average, suggesting a need for better debt level management. Despite the company's weak debt-to-equity ratio, the company has managed to keep a very strong quick ratio of 2.66, which shows the ability to cover short-term cash needs.
  • METHANEX 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, METHANEX CORP swung to a loss, reporting -$0.79 versus $2.07 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 Chemicals industry. The net income has significantly decreased by 319.0% when compared to the same quarter one year ago, falling from $63.87 million to -$139.85 million.
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Methanex Corporation, together with its subsidiaries, engages in the production, marketing, and sale of methanol. The company also purchases and re-sells methanol produced by others. The company has a P/E ratio of 23.8, above the S&P 500 P/E ratio of 17.7. Methanex has a market cap of $3.22 billion and is part of the basic materials sector and chemicals industry. Shares are up 7.4% year to date as of the close of trading on Friday.

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

Rating Change #5

Healthcare Realty Trust Inc ( HR) 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, revenue growth, solid stock price performance, impressive record of earnings per share growth and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

  • 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 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 798.8% when compared to the same quarter one year prior, rising from $0.65 million to $5.82 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 16.1%. Since the same quarter one year prior, revenues slightly increased by 7.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • 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. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • HEALTHCARE REALTY TRUST 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, HEALTHCARE REALTY TRUST INC swung to a loss, reporting -$0.07 versus $0.04 in the prior year. This year, the market expects an improvement in earnings ($0.21 versus -$0.07).
  • 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 Real Estate Investment Trusts (REITs) industry and the overall market on the basis of return on equity, HEALTHCARE REALTY TRUST INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
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Healthcare Realty Trust Incorporated is an independent real estate investment trust. The firm invests in real estate markets of the United States. The company has a P/E ratio of 212.5, above the S&P 500 P/E ratio of 17.7. Healthcare has a market cap of $2.22 billion and is part of the financial sector and real estate industry. Shares are up 6.2% year to date as of the close of trading on Tuesday.

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

Rating Change #4

Knight Transportation Inc ( KNX) 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, good cash flow from operations, increase in net income 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:
  • KNX's revenue growth has slightly outpaced the industry average of 1.2%. Since the same quarter one year prior, revenues slightly increased by 4.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • KNX's debt-to-equity ratio is very low at 0.09 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, KNX has a quick ratio of 1.87, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Net operating cash flow has increased to $44.27 million or 36.20% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 13.54%.
  • KNIGHT TRANSPORTATION INC reported flat earnings per share in the most recent 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, KNIGHT TRANSPORTATION INC increased its bottom line by earning $0.75 versus $0.71 in the prior year. This year, the market expects an improvement in earnings ($0.85 versus $0.75).
  • 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 Road & Rail industry average. The net income increased by 0.1% when compared to the same quarter one year prior, going from $16.56 million to $16.58 million.
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Knight Transportation, Inc., together with its subsidiaries, operates as a short to medium-haul truckload carrier of general commodities in the United States. The company has a P/E ratio of 20.7, above the S&P 500 P/E ratio of 17.7. Knight Transportation has a market cap of $1.32 billion and is part of the services sector and transportation industry. Shares are up 13.1% year to date as of the close of trading on Tuesday.

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

Rating Change #3

NYSE Euronext Inc ( NYX) 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 and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

  • 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 current debt-to-equity ratio, 0.39, is low and is below the industry average, implying that there has been successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.45 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • 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, despite the company's weak earnings results. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • The revenue fell significantly faster than the industry average of 6.3%. Since the same quarter one year prior, revenues fell by 28.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • NYSE EURONEXT's earnings per share declined by 42.1% 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, NYSE EURONEXT increased its bottom line by earning $2.37 versus $2.20 in the prior year. For the next year, the market is expecting a contraction of 24.1% in earnings ($1.80 versus $2.37).
  • 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 Diversified Financial Services industry. The net income has significantly decreased by 45.7% when compared to the same quarter one year ago, falling from $199.00 million to $108.00 million.
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NYSE Euronext, through its subsidiaries, operates securities exchanges. It operates various stock exchanges, including the New York Stock Exchange (NYSE), NYSE Arca, Inc., and NYSE Amex LLC in the United States; and five European-based exchanges that comprise Euronext N.V. The company has a P/E ratio of 19.9, above the S&P 500 P/E ratio of 17.7. NYSE Euronext has a market cap of $8.17 billion and is part of the financial sector and financial services industry. Shares are up 6.6% year to date as of the close of trading on Tuesday.

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

Rating Change #2

Prudential Financial Inc ( PRU) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures 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.

  • 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:
  • Net operating cash flow has slightly increased to $5,713.00 million or 1.16% when compared to the same quarter last year. Despite an increase in cash flow, PRUDENTIAL FINANCIAL INC's average is still marginally south of the industry average growth rate of 10.86%.
  • The revenue fell significantly faster than the industry average of 21.6%. Since the same quarter one year prior, revenues fell by 12.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • PRU's debt-to-equity ratio of 0.90 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further.
  • In its most recent trading session, PRU has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
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Prudential Financial, Inc., through its subsidiaries, provides various financial products and services, including life insurance, annuities, retirement-related services, mutual funds, and investment management services in the United States, Asia, Europe, and Latin America. The company has a P/E ratio of 23.4, above the S&P 500 P/E ratio of 17.7. Prudential Financial has a market cap of $27.2 billion and is part of the financial sector and insurance industry. Shares are up 10.4% year to date as of the close of trading on Wednesday.

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

Rating Change #1

Valley National Bancorp ( VLY) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster 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 net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Commercial Banks industry. The net income increased by 48.4% when compared to the same quarter one year prior, rising from $24.82 million to $36.83 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 11.0%. Since the same quarter one year prior, revenues slightly increased by 9.1%. 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 VALLEY NATIONAL BANCORP is currently very high, coming in at 74.80%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of 18.71% trails the industry average.
  • VALLEY NATIONAL BANCORP has improved earnings per share by 33.0% 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, VALLEY NATIONAL BANCORP reported lower earnings of $0.74 versus $0.76 in the prior year. For the next year, the market is expecting a contraction of 6.2% in earnings ($0.70 versus $0.74).
  • VLY has underperformed the S&P 500 Index, declining 13.77% from its price level of one year ago. 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 is one of the factors that makes this stock an attractive investment.
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Valley National Bancorp operates as the bank holding company for the Valley National Bank that provides various commercial, retail, trust, and investment services. Its deposit products include savings accounts, NOW accounts, money market accounts, time deposits, and certificates of deposit. The company has a P/E ratio of 37.6, above the S&P 500 P/E ratio of 17.7. Valley has a market cap of $1.93 billion and is part of the financial sector and banking industry. Shares are up 5.2% year to date as of the close of trading on Friday.

You can view the full Valley 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.