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 80 U.S. common stocks for week ending March 1, 2013. 56 stocks were upgraded and 24 stocks were downgraded by our stock model.

Rating Change #10

FirstEnergy Corp ( FE) has been downgraded by TheStreet Ratings from buy to hold. Among the primary strengths of the company is its generally strong cash flow from operations. At the same time, however, we also find weaknesses including deteriorating net income, generally higher debt management risk and disappointing return on equity.

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Highlights from the ratings report include:
  • Net operating cash flow has increased to $1,044.00 million or 25.17% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -9.47%.
  • FE, with its decline in revenue, underperformed when compared the industry average of 14.3%. Since the same quarter one year prior, revenues fell by 10.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • FIRSTENERGY 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. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, FIRSTENERGY CORP reported lower earnings of $1.84 versus $2.13 in the prior year. This year, the market expects an improvement in earnings ($3.00 versus $1.84).
  • The debt-to-equity ratio of 1.46 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with this, the company manages to maintain a quick ratio of 0.28, which clearly demonstrates the inability to cover short-term cash needs.
  • 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 Electric Utilities industry and the overall market, FIRSTENERGY CORP's return on equity is below that of both the industry average and the S&P 500.
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FirstEnergy Corp. operates as a diversified energy company. The company, through its subsidiaries, engages in the generation, transmission, and distribution of electricity. It owns and operates fossil, hydroelectric, and nuclear generating facilities, as well as wind and solar facilities. The company has a P/E ratio of 16.9, below the S&P 500 P/E ratio of 17.7. FirstEnergy has a market cap of $16.95 billion and is part of the utilities sector and utilities industry. Shares are down 2.9% year to date as of the close of trading on Tuesday.

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

Rating Change #9

Tower Group Inc ( TWGP) 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 and largely solid financial position with reasonable debt levels by most measures. 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.

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Highlights from the ratings report include:
  • TWGP's revenue growth trails the industry average of 21.6%. Since the same quarter one year prior, revenues slightly increased by 4.4%. 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.
  • Despite currently having a low debt-to-equity ratio of 0.46, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further.
  • TOWER GROUP 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. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, TOWER GROUP INC swung to a loss, reporting -$0.74 versus $1.46 in the prior year. This year, the market expects an improvement in earnings ($2.77 versus -$0.74).
  • 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 Insurance industry. The net income has significantly decreased by 306.2% when compared to the same quarter one year ago, falling from $25.29 million to -$52.14 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 Insurance industry and the overall market, TOWER GROUP INC's return on equity significantly trails that of both the industry average and the S&P 500.
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Tower Group, Inc., through its subsidiaries, provides commercial, specialty, and personal property and casualty insurance products and services to businesses in various industries and to individuals in the United States. The company has a P/E ratio of 15.5, below the S&P 500 P/E ratio of 17.7. Tower Group has a market cap of $743.6 million and is part of the financial sector and insurance industry. Shares are up 8.8% year to date as of the close of trading on Wednesday.

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

Rating Change #8

FreightCar America Inc ( RAIL) 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, poor profit margins and weak operating cash flow.

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Highlights from the ratings report include:
  • RAIL 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. To add to this, RAIL has a quick ratio of 1.74, which demonstrates the ability of the company to cover short-term liquidity needs.
  • RAIL, with its decline in revenue, underperformed when compared the industry average of 12.6%. Since the same quarter one year prior, revenues fell by 37.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The gross profit margin for FREIGHTCAR AMERICA INC is currently extremely low, coming in at 8.90%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -0.82% trails that of the industry average.
  • Net operating cash flow has significantly decreased to $14.47 million or 57.44% 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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FreightCar America, Inc., through its subsidiaries, designs, manufactures, and sells railroad freight cars primarily for railroads, shippers, and financial institutions in North America. The company has a P/E ratio of 13.1, below the S&P 500 P/E ratio of 17.7. FreightCar America has a market cap of $251.7 million and is part of the services sector and transportation industry. Shares are down 6.3% year to date as of the close of trading on Thursday.

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

Rating Change #7

Einstein Noah Restaurant Group ( BAGL) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its notable return on equity and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and poor profit margins.

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Highlights from the ratings report include:
  • 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 Hotels, Restaurants & Leisure industry and the overall market, EINSTEIN NOAH RESTAURANT GRP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has increased to $17.14 million or 25.24% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -9.85%.
  • BAGL, with its decline in revenue, slightly underperformed the industry average of 2.8%. Since the same quarter one year prior, revenues slightly dropped by 3.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • 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 Hotels, Restaurants & Leisure industry. The net income has significantly decreased by 48.3% when compared to the same quarter one year ago, falling from $6.12 million to $3.17 million.
  • The debt-to-equity ratio is very high at 4.97 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.
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Einstein Noah Restaurant Group, Inc. owns, operates, franchises, and licenses bagel specialty restaurants in the United States. The company operates, franchises, or licenses various restaurant concepts primarily under the Einstein Bros. The company has a P/E ratio of 14.8, below the S&P 500 P/E ratio of 17.7. Einstein Noah Restaurant Group has a market cap of $231.6 million and is part of the services sector and leisure industry. Shares are up 11.8% year to date as of the close of trading on Friday.

You can view the full Einstein Noah Restaurant Group Ratings Report or get investment ideas from our investment research center.

Rating Change #6

Sabra Health Care REIT Inc ( SBRA) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income and 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 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 Real Estate Investment Trusts (REITs) industry. The net income has significantly decreased by 44.7% when compared to the same quarter one year ago, falling from $7.16 million to $3.96 million.
  • Net operating cash flow has decreased to $8.35 million or 18.10% when compared to the same quarter last year. Despite a decrease in cash flow SABRA HEALTH CARE REIT INC is still fairing well by exceeding its industry average cash flow growth rate of -42.58%.
  • 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. When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, SABRA HEALTH CARE REIT INC's return on equity is below that of both the industry average and the S&P 500.
  • 47.30% is the gross profit margin for SABRA HEALTH CARE REIT INC which we consider to be strong. Regardless of SBRA's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SBRA's net profit margin of 13.99% is significantly lower than the industry average.
  • SABRA HEALTH CARE REIT INC'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. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, SABRA HEALTH CARE REIT INC increased its bottom line by earning $0.53 versus $0.39 in the prior year. This year, the market expects an improvement in earnings ($1.32 versus $0.53).
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Sabra Health Care REIT, Inc. operates as a real estate investment trust in the United States. The company, through its subsidiaries, owns and invests in real estate properties for the healthcare industry. The company has a P/E ratio of 51.9, above the S&P 500 P/E ratio of 17.7. Sabra Health Care REIT has a market cap of $999.3 million and is part of the financial sector and real estate industry. Shares are up 24.2% year to date as of the close of trading on Friday.

You can view the full Sabra Health Care REIT Ratings Report or get investment ideas from our investment research center.

Rating Change #5

Astex Pharmaceuticals Inc ( ASTX) 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, compelling growth in net income, solid stock price performance and notable return on equity. We feel these strengths outweigh the fact that the company shows low profit margins.

  • 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:
  • ASTX's revenue growth has slightly outpaced the industry average of 5.9%. Since the same quarter one year prior, revenues rose by 13.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • ASTX 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 7.34, which clearly demonstrates the ability to cover short-term cash needs.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Biotechnology industry. The net income increased by 1957.7% when compared to the same quarter one year prior, rising from $0.22 million to $4.53 million.
  • This stock has managed to rise its share value by 70.68% over the past twelve months. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • 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. In comparison to the other companies in the Biotechnology industry and the overall market, ASTEX PHARMACEUTICALS INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
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Astex Pharmaceuticals, Inc. engages in the discovery and development of small molecule therapeutics with a focus on oncology and hematology. It develops small molecule therapeutics using its fragment-based drug discovery platform, Pyramid. The company has a P/E ratio of 39.9, above the S&P 500 P/E ratio of 17.7. Astex has a market cap of $298.3 million 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 Friday.

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

Rating Change #4

Guess Inc ( GES) 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, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.

  • 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:
  • GES's debt-to-equity ratio is very low at 0.01 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, GES has a quick ratio of 1.58, which demonstrates the ability of the company to cover short-term liquidity needs.
  • 40.00% is the gross profit margin for GUESS INC which we consider to be strong. Regardless of GES's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, GES's net profit margin of 6.13% compares favorably to the industry average.
  • GES, with its decline in revenue, underperformed when compared the industry average of 22.3%. Since the same quarter one year prior, revenues slightly dropped by 1.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • 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 Specialty Retail industry and the overall market, GUESS INC's return on equity exceeds that of both the industry average and the S&P 500.
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Guess , Inc. designs, markets, distributes, and licenses lifestyle collections of contemporary apparel and accessories for men, women, and children that reflect the American lifestyle and European fashion sensibilities. The company has a P/E ratio of 12.6, below the S&P 500 P/E ratio of 17.7. Guess has a market cap of $2.41 billion and is part of the services sector and retail industry. Shares are up 15.2% year to date as of the close of trading on Tuesday.

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

Rating Change #3

Corning Inc ( GLW) 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, attractive 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.

  • 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 revenue growth came in higher than the industry average of 7.3%. Since the same quarter one year prior, revenues rose by 13.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • GLW's debt-to-equity ratio is very low at 0.16 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 3.81, which clearly demonstrates the ability to cover short-term cash needs.
  • Net operating cash flow has slightly increased to $1,240.00 million or 7.17% when compared to the same quarter last year. Despite an increase in cash flow, CORNING INC's average is still marginally south of the industry average growth rate of 8.55%.
  • The gross profit margin for CORNING INC is rather high; currently it is at 54.40%. Regardless of GLW's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, GLW's net profit margin of 13.18% compares favorably to the industry average.
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Corning Incorporated produces and sells specialty glasses, ceramics, and related materials worldwide. It operates through five segments: Display Technologies, Telecommunications, Environmental Technologies, Specialty Materials, and Life Sciences. The company has a P/E ratio of 10.9, below the S&P 500 P/E ratio of 17.7. Corning has a market cap of $18.54 billion and is part of the technology sector and electronics industry. Shares are down 0.2% year to date as of the close of trading on Friday.

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

Rating Change #2

General Motors Co ( GM) 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 net income, attractive valuation levels, largely solid financial position with reasonable debt levels by most measures and growth in earnings per share. 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 revenue growth came in higher than the industry average of 21.7%. Since the same quarter one year prior, revenues slightly increased by 3.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Automobiles industry. The net income increased by 64.7% when compared to the same quarter one year prior, rising from $725.00 million to $1,194.00 million.
  • The current debt-to-equity ratio, 0.44, 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 0.79 is somewhat weak and could be cause for future problems.
  • GENERAL MOTORS CO 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, GENERAL MOTORS CO reported lower earnings of $2.93 versus $4.62 in the prior year. This year, the market expects an improvement in earnings ($3.36 versus $2.93).
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General Motors Company (GM) designs, manufactures, and markets cars, crossovers, trucks, and automobile parts worldwide. The company has a P/E ratio of 9.3, below the S&P 500 P/E ratio of 17.7. General has a market cap of $37.04 billion and is part of the consumer goods sector and automotive industry. Shares are down 6% year to date as of the close of trading on Tuesday.

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

Rating Change #1

Zions Bancorporation ( ZION) 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, solid stock price performance and notable return on equity. 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 gross profit margin for ZIONS BANCORPORATION is currently very high, coming in at 89.50%. 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 10.54% trails the industry average.
  • Compared to its closing price of one year ago, ZION's share price has jumped by 25.65%, exceeding the performance of the broader market during that same time frame. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
  • ZIONS BANCORPORATION's earnings per share declined by 20.8% 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, ZIONS BANCORPORATION increased its bottom line by earning $0.97 versus $0.83 in the prior year. This year, the market expects an improvement in earnings ($1.75 versus $0.97).
  • ZION, with its decline in revenue, underperformed when compared the industry average of 0.4%. Since the same quarter one year prior, revenues fell by 13.4%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • 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 Commercial Banks industry and the overall market on the basis of return on equity, ZIONS BANCORPORATION underperformed against that of the industry average and is significantly less than that of the S&P 500.
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Zions Bancorporation, a bank and financial holding company, provides a range of banking and related services in the United States. The company has a P/E ratio of 23.9, above the S&P 500 P/E ratio of 17.7. Zions has a market cap of $4.44 billion and is part of the financial sector and banking industry. Shares are up 12.7% year to date as of the close of trading on Friday.

You can view the full Zions 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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