TheStreet Ratings Top 10 Rating Changes

Tickers in this article: ACTG ANR APOL BPO HGIC IVZ JNJ LEN UAL UBS

NEW YORK (TheStreet Ratings) -- Every trading day TheStreet Ratings' stock model reviews the investment ratings on around 4,700 U.S. traded stocks for potential upgrades or downgrades based on the latest available financial results and trading activity.

TheStreet Ratings released rating changes on 71 U.S. common stocks for week ending March 30, 2012. 41 stocks were upgraded and 30 stocks were downgraded by our stock model.

Rating Change #10

Alpha Natural Resources Inc 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, weak operating cash flow 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 Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 6865.7% when compared to the same quarter one year ago, falling from $10.84 million to -$733.33 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, ALPHA NATURAL RESOURCES INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for ALPHA NATURAL RESOURCES INC is rather low; currently it is at 17.20%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -35.40% is significantly below that of the industry average.
  • Net operating cash flow has decreased to $149.41 million or 18.15% 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.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 73.89%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 3811.11% 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.
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Alpha Natural Resources, Inc., together with its subsidiaries, engages in producing, processing, and selling steam and metallurgical coal in the United States. The company has mining operations in Virginia, West Virginia, Pennsylvania, Kentucky, and Wyoming. Alpha Natural has a market cap of $4.42 billion and is part of the basic materials sector and metals & mining industry. Shares are down 21.8% year to date as of the close of trading on Tuesday.

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

Rating Change #9

Apollo Group Inc has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

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 Diversified Consumer Services industry. The net income increased by 199.8% when compared to the same quarter one year prior, rising from -$64.04 million to $63.88 million.
  • Although APOL's debt-to-equity ratio of 0.12 is very low, it is currently higher than that of the industry average. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.08, which illustrates the ability to avoid short-term cash problems.
  • The gross profit margin for APOLLO GROUP INC is rather high; currently it is at 55.70%. Regardless of APOL's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 6.60% trails the industry average.
  • APOLLO GROUP 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. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, APOLLO GROUP INC increased its bottom line by earning $4.02 versus $3.69 in the prior year. For the next year, the market is expecting a contraction of 17.5% in earnings ($3.32 versus $4.02).
  • APOL has underperformed the S&P 500 Index, declining 9.13% from its price level of one year ago. 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.
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Apollo Group, Inc., through its subsidiaries, provides online and on-campus educational programs and services at the undergraduate, master's, and doctoral levels. The company has a P/E ratio of 9.6, below the average diversified services industry P/E ratio of 15.6 and below the S&P 500 P/E ratio of 17.7. Apollo Group has a market cap of $7 billion and is part of the services sector and diversified services industry. Shares are down 26.6% year to date as of the close of trading on Wednesday.

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

Rating Change #8

Lennar Corporation 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 solid stock price performance. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, poor profit margins and feeble growth in the company's earnings per share.

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 42.8%. Since the same quarter one year prior, revenues rose by 29.9%. 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.
  • Compared to its closing price of one year ago, LEN's share price has jumped by 37.94%, exceeding the performance of the broader market during that same time frame. Setting our sights on the months ahead, however, we feel that the stock's sharp appreciation over the last year has driven it to a price level which is now relatively expensive compared to the rest of its industry. The implication is that its reduced upside potential is not good enough to warrant further investment at this time.
  • The change in net income from the same quarter one year ago has significantly exceeded that of the Household Durables industry average, but is less than that of the S&P 500. The net income has significantly decreased by 45.4% when compared to the same quarter one year ago, falling from $27.41 million to $14.97 million.
  • The gross profit margin for LENNAR CORP is rather low; currently it is at 19.00%. Regardless of LEN's low profit margin, it has managed to increase from the same period last year.
  • 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 Household Durables industry and the overall market, LENNAR CORP's return on equity significantly trails that of both the industry average and the S&P 500.
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Lennar Corporation, together with its subsidiaries, engages in homebuilding, financial services, and real estate businesses in the United States. The company has a P/E ratio of 55, above the average materials & construction industry P/E ratio of 46.6 and above the S&P 500 P/E ratio of 17.7. Lennar has a market cap of $3.48 billion and is part of the industrial goods sector and materials & construction industry. Shares are up 40.6% year to date as of the close of trading on Wednesday.

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

Rating Change #7

United Continental Holdings Inc 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, notable return on equity and impressive record of earnings per share growth. However, as a counter to these strengths, we also find weaknesses including generally poor debt management, poor profit margins and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • UAL's revenue growth has slightly outpaced the industry average of 3.3%. Since the same quarter one year prior, revenues slightly increased by 5.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • UNITED CONTINENTAL HLDGS 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, UNITED CONTINENTAL HLDGS INC increased its bottom line by earning $2.01 versus $1.54 in the prior year. This year, the market expects an improvement in earnings ($4.10 versus $2.01).
  • Net operating cash flow has significantly increased by 150.00% to $265.00 million when compared to the same quarter last year. Despite an increase in cash flow of 150.00%, UNITED CONTINENTAL HLDGS INC is still growing at a significantly lower rate than the industry average of 1108.58%.
  • The gross profit margin for UNITED CONTINENTAL HLDGS INC is rather low; currently it is at 20.70%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -1.50% trails that of the industry average.
  • The debt-to-equity ratio is very high at 7.05 and currently higher than the industry average, implying that there is very poor management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, UAL maintains a poor quick ratio of 0.80, which illustrates the inability to avoid short-term cash problems.
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United Continental Holdings, Inc., through its subsidiaries, engages in the provision of passenger and cargo air transportation services. The company has a P/E ratio of 9.7, below the average transportation industry P/E ratio of 26.6 and below the S&P 500 P/E ratio of 17.7. United Continental has a market cap of $6.42 billion and is part of the services sector and transportation industry. Shares are up 18.4% year to date as of the close of trading on Friday.

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

Rating Change #6

UBS AG 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, weak operating cash flow 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 Capital Markets industry. The net income has significantly decreased by 90.6% when compared to the same quarter one year ago, falling from $2,054.46 million to $192.71 million.
  • The debt-to-equity ratio is very high at 6.21 and currently higher than the industry average, implying that there is very poor management of debt levels within the company.
  • 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. When compared to other companies in the Capital Markets industry and the overall market, UBS AG's return on equity is below that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$52,225.62 million or 515.04% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The share price of UBS AG has not done very well: it is down 23.70% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. 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.
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UBS AG, a financial services firm, provides wealth management, asset management, and investment banking products and services to private, corporate, and institutional clients worldwide. The company is also involved in retail and commercial banking in Switzerland. The company has a P/E ratio of 13.1, above the average banking industry P/E ratio of 8.2 and below the S&P 500 P/E ratio of 17.7. UBS has a market cap of $52.08 billion and is part of the financial sector and banking industry. Shares are up 17.6% year to date as of the close of trading on Friday.

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

Rating Change #5

Harleysville Group Inc has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, solid stock price performance and increase in net income. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:

  • HGIC's revenue growth has slightly outpaced the industry average of 5.0%. Since the same quarter one year prior, revenues rose by 14.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • HGIC'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.
  • Powered by its strong earnings growth of 89.47% and other important driving factors, this stock has surged by 79.42% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, HGIC should continue to move higher despite the fact that it has already enjoyed a very nice gain 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 93.2% when compared to the same quarter one year prior, rising from $20.97 million to $40.51 million.
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Harleysville Group Inc., through its subsidiaries, engages in the property and casualty insurance business primarily in the eastern and midwestern United States. The company has a P/E ratio of 71.8, below the average insurance industry P/E ratio of 719.1 and above the S&P 500 P/E ratio of 17.7. Harleysville Group has a market cap of $1.56 billion and is part of the financial sector and insurance industry. Shares are up 2.7% year to date as of the close of trading on Tuesday.

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

Rating Change #4

Acacia Research Corporation 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, robust revenue growth, good cash flow from operations, solid stock price performance and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:

  • Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 10.76 is very high and demonstrates very strong liquidity.
  • ACTG's very impressive revenue growth greatly exceeded the industry average of 9.7%. Since the same quarter one year prior, revenues leaped by 58.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Net operating cash flow has increased to $16.45 million or 12.87% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -1.49%.
  • Powered by its strong earnings growth of 37.50% and other important driving factors, this stock has surged by 32.24% over the past year, outperforming the rise in the S&P 500 Index during the same period. 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.
  • ACACIA RESEARCH CORP has improved earnings per share by 37.5% 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, ACACIA RESEARCH CORP reported lower earnings of $0.54 versus $0.97 in the prior year. This year, the market expects an improvement in earnings ($1.84 versus $0.54).
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Acacia Research Corporation, through its subsidiaries, acquires, develops, licenses, and enforces patented technologies in the United States. Acacia Research Coroporation has a market cap of $1.73 billion and is part of the services sector and diversified services industry. Shares are up 17.1% year to date as of the close of trading on Wednesday.

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

Rating Change #3

Brookfield Office Properties Inc 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, 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.

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 9.4%. Since the same quarter one year prior, revenues rose by 43.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has significantly increased by 285.88% to $158.00 million when compared to the same quarter last year. In addition, BROOKFIELD OFFICE PPTYS INC has also vastly surpassed the industry average cash flow growth rate of 15.61%.
  • The gross profit margin for BROOKFIELD OFFICE PPTYS INC is rather high; currently it is at 56.90%. Regardless of BPO's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, BPO's net profit margin of 64.80% significantly outperformed against the industry.
  • BROOKFIELD OFFICE PPTYS 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 not demonstrated a clear trend in earnings over the past two years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, BROOKFIELD OFFICE PPTYS INC increased its bottom line by earning $2.86 versus $2.53 in the prior year.
  • BPO's debt-to-equity ratio of 0.97 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 0.41 is very low and demonstrates very weak liquidity.
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Brookfield Properties Corporation is a publicly owned real estate investment firm. The firm engages in the ownership, development, and management of premier commercial properties. It also provides ancillary real estate service businesses, such as tenant service and amenities. The company has a P/E ratio of 5.8, above the average real estate industry P/E ratio of 4.3 and below the S&P 500 P/E ratio of 17.7. Brookfield Office has a market cap of $8.77 billion and is part of the financial sector and real estate industry. Shares are up 9% year to date as of the close of trading on Tuesday.

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

Rating Change #2

Invesco Ltd has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, good cash flow from operations, increase in stock price during the past year and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:

  • INVESCO LTD has improved earnings per share by 18.9% 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, INVESCO LTD increased its bottom line by earning $1.57 versus $0.99 in the prior year. This year, the market expects an improvement in earnings ($1.89 versus $1.57).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the Capital Markets industry average, but is less than that of the S&P 500. The net income increased by 15.5% when compared to the same quarter one year prior, going from $175.20 million to $202.30 million.
  • Net operating cash flow has significantly increased by 8624.32% to $322.80 million when compared to the same quarter last year. In addition, INVESCO LTD has also vastly surpassed the industry average cash flow growth rate of 457.13%.
  • After a year of stock price fluctuations, the net result is that IVZ's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. 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 debt-to-equity ratio is somewhat low, currently at 0.84, and is less than that of the industry average, implying that there has been a relatively successful effort in the 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.
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Invesco Ltd. is a publicly owned investment manager. The firm primarily provides its services to individuals, typically high net worth individuals. It also manages accounts for institutions. The firm manages separate client focused equity, fixed income, balanced portfolios. The company has a P/E ratio of 16.7, above the average financial services industry P/E ratio of 14.8 and below the S&P 500 P/E ratio of 17.7. Invesco has a market cap of $10.1 billion and is part of the financial sector and financial services industry. Shares are up 33.6% year to date as of the close of trading on Tuesday.

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

Rating Change #1

Johnson & Johnson 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, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 4.3%. Since the same quarter one year prior, revenues slightly increased by 3.9%. 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.
  • The current debt-to-equity ratio, 0.34, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, JNJ has a quick ratio of 1.88, which demonstrates the ability of the company to cover short-term liquidity needs.
  • JOHNSON & JOHNSON 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 suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, JOHNSON & JOHNSON reported lower earnings of $3.48 versus $4.78 in the prior year. This year, the market expects an improvement in earnings ($5.10 versus $3.48).
  • The gross profit margin for JOHNSON & JOHNSON is currently very high, coming in at 72.40%. Regardless of JNJ's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, JNJ's net profit margin of 1.30% is significantly lower than the same period one year prior.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. 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.
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Johnson & Johnson engages in the research, development, manufacture, and sale of various products in the health care field worldwide. The company has a P/E ratio of 18.8, above the average drugs industry P/E ratio of 15.9 and above the S&P 500 P/E ratio of 17.7. Johnson & Johnson has a market cap of $177.51 billion and is part of the health care sector and drugs industry. Shares are down 0.1% year to date as of the close of trading on Friday.

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

-- Reported by Kevin Baker in Jupiter, 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.

Tickers in this article: ACTG ANR APOL BPO HGIC IVZ JNJ LEN UAL UBS