TheStreet Ratings released rating changes on 112 U.S. common stocks for week ending October 28, 2011. 86 stocks were upgraded and 26 stocks were downgraded by our stock model.
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Rating Change #10Itron Inc (ITRI) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, poor profit margins and generally disappointing historical performance in the stock itself.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 Electronic Equipment, Instruments & Components industry. The net income has significantly decreased by 1970.8% when compared to the same quarter one year ago, falling from $27.64 million to -$517.08 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 Electronic Equipment, Instruments & Components industry and the overall market, ITRON INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for ITRON INC is currently lower than what is desirable, coming in at 31.30%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -84.00% is significantly below that of the industry average.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 43.49%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 1967.64% compared to the year-earlier quarter. 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 could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
- ITRON 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, ITRON INC turned its bottom line around by earning $2.56 versus -$0.09 in the prior year. This year, the market expects an improvement in earnings ($4.34 versus $2.56).
Rating Change #9
Netflix (NFLX) 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, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and generally poor debt management.
Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 20.0%. Since the same quarter one year prior, revenues rose by 48.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
- NETFLIX INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, NETFLIX INC increased its bottom line by earning $2.96 versus $1.99 in the prior year. This year, the market expects an improvement in earnings ($4.10 versus $2.96).
- NFLX'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 55.30%, 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. 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 could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
- NFLX's debt-to-equity ratio of 0.60 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. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 0.38 is very low and demonstrates very weak liquidity.
Rating Change #8
SL Green Realty Corporation (SLG) 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, poor profit margins, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.
Highlights from the ratings report include:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income has significantly decreased by 87.7% when compared to the same quarter one year ago, falling from $119.05 million to $14.62 million.
- The gross profit margin for SL GREEN REALTY CORP is currently lower than what is desirable, coming in at 29.70%. It has decreased significantly from the same period last year. Along with this, the net profit margin of 4.80% significantly trails the industry average.
- In its most recent trading session, SLG 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.
- SL GREEN REALTY 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. 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, SL GREEN REALTY CORP increased its bottom line by earning $2.93 versus $0.64 in the prior year. For the next year, the market is expecting a contraction of 45.6% in earnings ($1.60 versus $2.93).
- SLG, with its decline in revenue, underperformed when compared the industry average of 11.1%. Since the same quarter one year prior, revenues slightly dropped by 7.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
Rating Change #7
Agnico-Eagle Mines (AEM) 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 good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity.
Highlights from the ratings report include:
- The revenue growth significantly trails the industry average of 65.3%. Since the same quarter one year prior, revenues rose by 30.6%. 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.
- AEM's debt-to-equity ratio is very low at 0.17 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Despite the fact that AEM's debt-to-equity ratio is low, the quick ratio, which is currently 0.64, displays a potential problem in covering 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. Compared to other companies in the Metals & Mining industry and the overall market on the basis of return on equity, AGNICO EAGLE MINES LTD underperformed against that of the industry average and is significantly less than that of the S&P 500.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 39.87%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 167.60% compared to the year-earlier quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, AEM is still more expensive than most of the other companies in its industry.
Rating Change #6
UBS AG (UBS) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally weak debt management, disappointing return on equity, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.
Highlights from the ratings report include:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Capital Markets industry. The net income has significantly decreased by 57.3% when compared to the same quarter one year ago, falling from $2,082.18 million to $889.70 million.
- The debt-to-equity ratio is very high at 5.79 and currently higher than the industry average, implying that there is very poor management of debt levels within the company.
- 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 Capital Markets industry and the overall market on the basis of return on equity, UBS AG has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 29.86%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 57.40% compared to the year-earlier 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.
- UBS AG 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. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, UBS AG turned its bottom line around by earning $2.09 versus -$0.74 in the prior year. For the next year, the market is expecting a contraction of 44.0% in earnings ($1.17 versus $2.09).
Rating Change #5
PACCAR Inc (PCAR) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, compelling growth in net income, notable return on equity and attractive valuation levels. We feel these strengths outweigh the fact that the company shows weak operating cash flow.
Highlights from the ratings report include:
- PCAR's very impressive revenue growth greatly exceeded the industry average of 23.1%. Since the same quarter one year prior, revenues leaped by 67.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- PACCAR INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, PACCAR INC increased its bottom line by earning $1.25 versus $0.31 in the prior year. This year, the market expects an improvement in earnings ($2.60 versus $1.25).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Machinery industry. The net income increased by 134.9% when compared to the same quarter one year prior, rising from $119.90 million to $281.60 million.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Machinery industry and the overall market on the basis of return on equity, PACCAR INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
Rating Change #4
El Paso Corporation (EP) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income, revenue growth, expanding profit margins and good cash flow from operations. We feel these strengths outweigh the fact that the company has had generally poor debt management on most measures that we evaluated.
Highlights from the ratings report include:
- EL PASO 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 two years. We feel that this trend should continue. During the past fiscal year, EL PASO CORP turned its bottom line around by earning $1.00 versus -$0.86 in the prior year. This year, the market expects an improvement in earnings ($1.08 versus $1.00).
- 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 Oil, Gas & Consumable Fuels industry average. The net income increased by 66.9% when compared to the same quarter one year prior, rising from $157.00 million to $262.00 million.
- EP's revenue growth trails the industry average of 38.1%. Since the same quarter one year prior, revenues rose by 21.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The gross profit margin for EL PASO CORP is rather high; currently it is at 64.00%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 21.20% significantly outperformed against the industry average.
- Net operating cash flow has increased to $465.00 million or 11.77% when compared to the same quarter last year. Despite an increase in cash flow, EL PASO CORP's cash flow growth rate is still lower than the industry average growth rate of 39.22%.
Rating Change #3
Lowe's Companies Inc (LOW) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, attractive valuation levels, good cash flow from operations 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.
Highlights from the ratings report include:
- LOW's revenue growth has slightly outpaced the industry average of 6.1%. Since the same quarter one year prior, revenues slightly increased by 1.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- LOWE'S COMPANIES INC has improved earnings per share by 10.3% 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. We feel that this trend should continue. During the past fiscal year, LOWE'S COMPANIES INC increased its bottom line by earning $1.42 versus $1.20 in the prior year. This year, the market expects an improvement in earnings ($1.59 versus $1.42).
- Net operating cash flow has significantly increased by 1791.30% to $870.00 million when compared to the same quarter last year. In addition, LOWE'S COMPANIES INC has also vastly surpassed the industry average cash flow growth rate of 42.44%.
- In its most recent trading session, LOW 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. 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.
Rating Change #2
ABB Ltd (ABB) 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, good cash flow from operations, growth in earnings per share and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
Highlights from the ratings report include:
- ABB's revenue growth has slightly outpaced the industry average of 26.4%. Since the same quarter one year prior, revenues rose by 27.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- 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 Electrical Equipment industry average. The net income increased by 43.3% when compared to the same quarter one year prior, rising from $623.00 million to $893.00 million.
- Net operating cash flow has increased to $961.00 million or 48.07% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 37.40%.
- ABB's debt-to-equity ratio is very low at 0.23 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.89 is somewhat weak and could be cause for future problems.
- ABB LTD has improved earnings per share by 44.4% 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, ABB LTD reported lower earnings of $1.11 versus $1.26 in the prior year. This year, the market expects an improvement in earnings ($1.54 versus $1.11).
Rating Change #1
Berkshire Hathaway Inc (BRK.B) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in net income, attractive valuation levels, good cash flow from operations and growth in earnings per share. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
Highlights from the ratings report include:
- BRK.B's revenue growth has slightly outpaced the industry average of 20.7%. Since the same quarter one year prior, revenues rose by 20.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- 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 73.6% when compared to the same quarter one year prior, rising from $1,968.00 million to $3,417.00 million.
- Net operating cash flow has significantly increased by 82.71% to $6,481.00 million when compared to the same quarter last year. In addition, BERKSHIRE HATHAWAY has also modestly surpassed the industry average cash flow growth rate of 82.68%.
- BERKSHIRE HATHAWAY 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, BERKSHIRE HATHAWAY reported lower earnings of $5.30 versus $103.78 in the prior year. This year, the market expects an improvement in earnings ($6397.20 versus $5.30).
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