TheStreet Ratings Top 10 Rating Changes

Tickers in this article: AEG CPN ENB GS LNG MAA MDVN MRO SMG VIV

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 108 U.S. common stocks for week ending May 11, 2012. 38 stocks were upgraded and 70 stocks were downgraded by our stock model.

Rating Change #10

Goldman Sachs 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 attractive valuation levels and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, a generally disappointing performance in the stock itself and deteriorating net income.

Highlights from the ratings report include:

  • GOLDMAN SACHS GROUP 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, GOLDMAN SACHS GROUP INC reported lower earnings of $4.41 versus $13.14 in the prior year. This year, the market expects an improvement in earnings ($12.31 versus $4.41).
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 22.6%. Since the same quarter one year prior, revenues fell by 13.5%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • GS'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 26.69%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • The 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 Capital Markets industry and the overall market, GOLDMAN SACHS GROUP INC's return on equity is below that of both the industry average and the S&P 500.
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The Goldman Sachs Group, Inc. provides investment banking, securities, and investment management services, as well as a range of financial services to corporations, financial institutions, governments and high-net-worth individuals worldwide. The company has a P/E ratio of 15.9, above the average financial services industry P/E ratio of 15.7 and below the S&P 500 P/E ratio of 17.7. Goldman Sachs Group has a market cap of $53.97 billion and is part of the financial sector and financial services industry. Shares are up 21.7% year to date as of the close of trading on Tuesday.

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

Rating Change #9

Enbridge Inc 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 deteriorating net income and weak operating cash flow.

Highlights from the ratings report include:

  • Compared to its closing price of one year ago, ENB's share price has jumped by 25.31%, 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.
  • ENBRIDGE INC's earnings per share declined by 34.6% in the most recent quarter compared to 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, ENBRIDGE INC increased its bottom line by earning $1.31 versus $1.29 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 Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 31.1% when compared to the same quarter one year ago, falling from $395.00 million to $272.00 million.
  • Net operating cash flow has decreased to $648.00 million or 32.28% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
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Enbridge Inc. engages in the transportation and distribution of crude oil and natural gas primarily in Canada and the United States. The company's Liquids Pipelines segment operates common carrier and contract crude oil, natural gas liquids (NGLs), and refined products pipelines and terminals. The company has a P/E ratio of 31.3, above the average energy industry P/E ratio of 31.2 and above the S&P 500 P/E ratio of 17.7. Enbridge has a market cap of $31.2 billion and is part of the basic materials sector and energy industry. Shares are up 6.1% year to date as of the close of trading on Thursday.

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

Rating Change #8

Telefonica Brasil S.A. 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, compelling growth in net income and solid stock price performance. However, as a counter to these strengths, we find that the growth in the company's earnings per share has not been good.

Highlights from the ratings report include:

  • VIV's very impressive revenue growth greatly exceeded the industry average of 1.7%. Since the same quarter one year prior, revenues leaped by 87.5%. 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 net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Diversified Telecommunication Services industry. The net income increased by 104.6% when compared to the same quarter one year prior, rising from $256.85 million to $525.46 million.
  • After a year of stock price fluctuations, the net result is that VIV'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. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • TELEFONICA BRASIL SA's earnings per share declined by 6.6% in the most recent quarter compared to 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, TELEFONICA BRASIL SA reported lower earnings of $3.74 versus $4.27 in the prior year. For the next year, the market is expecting a contraction of 37.0% in earnings ($2.36 versus $3.74).
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Telefonica Brasil, S.A. provides fixed-line telecommunications services to residential and commercial customers in the state of Sao Paulo, Brazil. The company has a P/E ratio of 6.5, below the average telecommunications industry P/E ratio of 11.1 and below the S&P 500 P/E ratio of 17.7. Telefonica Brasil S.A has a market cap of $31.36 billion and is part of the technology sector and telecommunications industry. Shares are up 2.1% year to date as of the close of trading on Friday.

You can view the full Telefonica Brasil S.A Ratings Report or get investment ideas from our investment research center.

Rating Change #7

Marathon Oil Corp has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, weak operating cash flow and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 11.9%. Since the same quarter one year prior, revenues slightly increased by 3.3%. 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.
  • MRO's debt-to-equity ratio is very low at 0.27 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Despite the fact that MRO's debt-to-equity ratio is low, the quick ratio, which is currently 0.59, displays a potential problem in covering short-term cash needs.
  • Net operating cash flow has significantly decreased to $973.00 million or 62.46% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • 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 58.1% when compared to the same quarter one year ago, falling from $996.00 million to $417.00 million.
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Marathon Oil Corporation operates as an energy company worldwide. The company operates in three segments: Exploration and Production, Oil Sands Mining, and Integrated Gas. The company has a P/E ratio of 11.2, above the average energy industry P/E ratio of 7.9 and below the S&P 500 P/E ratio of 17.7. Marathon Oil has a market cap of $18.56 billion and is part of the basic materials sector and energy industry. Shares are down 10.6% year to date as of the close of trading on Wednesday.

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

Rating Change #6

AEGON NV 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, good cash flow from operations 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 poor profit margins.

Highlights from the ratings report include:

  • AEG's revenue growth has slightly outpaced the industry average of 13.1%. Since the same quarter one year prior, revenues rose by 17.6%. 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.
  • Net operating cash flow has significantly increased by 120.99% to $529.48 million when compared to the same quarter last year. In addition, AEGON NV has also vastly surpassed the industry average cash flow growth rate of 32.76%.
  • Despite currently having a low debt-to-equity ratio of 0.52, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further.
  • 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 Insurance industry and the overall market on the basis of return on equity, AEGON NV underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • The gross profit margin for AEGON NV is currently extremely low, coming in at 2.80%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 0.40% trails that of the industry average.
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AEGON N.V. provides life insurance, pension, and asset management products and services primarily in the Americas, Europe, and Asia. The company has a P/E ratio of 2.2, below the S&P 500 P/E ratio of 17.7. AEGON has a market cap of $8.61 billion and is part of the financial sector and insurance industry. Shares are up 9.2% year to date as of the close of trading on Wednesday.

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

Rating Change #5

Calpine Corp has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, solid stock price performance and impressive record of earnings per share growth. However, as a counter to these strengths, we also find weaknesses including generally poor debt management, weak operating cash flow and poor profit margins.

Highlights from the ratings report include:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Independent Power Producers & Energy Traders industry. The net income increased by 97.0% when compared to the same quarter one year prior, rising from -$297.00 million to -$9.00 million.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. We feel that the combination of its price rise over the last year and its current price-to-earnings ratio relative to its industry tend to reduce its upside potential.
  • Net operating cash flow has significantly decreased to $71.00 million or 52.34% 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 debt-to-equity ratio is very high at 2.44 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, CPN maintains a poor quick ratio of 0.71, which illustrates the inability to avoid short-term cash problems.
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Calpine Corporation, an independent wholesale power generation company, owns and operates natural gas-fired and geothermal power plants in North America. It operates natural gas-fired combustion turbines and renewable geothermal conventional steam turbines, as well as cogeneration power plants. The company has a P/E ratio of 91, equal to the average utilities industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Calpine has a market cap of $8.78 billion and is part of the utilities sector and utilities industry. Shares are up 13.2% year to date as of the close of trading on Tuesday.

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

Rating Change #4

Cheniere Energy Inc has been upgraded by TheStreet Ratings from sell 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, solid stock price performance and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including deteriorating net income and weak operating cash flow.

Highlights from the ratings report include:

  • Despite the fact that LNG's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.80 is high and demonstrates strong liquidity.
  • Powered by its strong earnings growth of 28.33% and other important driving factors, this stock has surged by 113.92% over the past year, outperforming the rise in the S&P 500 Index during the same period. 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.
  • CHENIERE ENERGY INC has improved earnings per share by 28.3% 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, CHENIERE ENERGY INC reported poor results of -$2.60 versus -$2.02 in the prior year. This year, the market expects an improvement in earnings (-$0.73 versus -$2.60).
  • Net operating cash flow has decreased to -$68.70 million or 39.50% 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.
  • 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 41.6% when compared to the same quarter one year ago, falling from -$39.84 million to -$56.42 million.
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Cheniere Energy, Inc., through its subsidiaries, engages in the ownership and operation of liquefied natural gas (LNG) receiving terminals and natural gas pipelines in the Gulf Coast of the United States. Cheniere Energy has a market cap of $2.53 billion and is part of the basic materials sector and energy industry. Shares are up 89.4% year to date as of the close of trading on Tuesday.

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

Rating Change #3

Medivation Inc has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and increase in net income. However, as a counter to these strengths, we also find weaknesses including poor profit margins and generally poor debt management.

Highlights from the ratings report include:

  • MDVN's very impressive revenue growth greatly exceeded the industry average of 5.2%. Since the same quarter one year prior, revenues leaped by 150.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 104.16% and other important driving factors, this stock has surged by 245.50% over the past year, outperforming the rise in the S&P 500 Index during the same period. 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.
  • MEDIVATION 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, MEDIVATION INC reported poor results of -$1.11 versus -$0.99 in the prior year. This year, the market expects an improvement in earnings (-$0.45 versus -$1.11).
  • The debt-to-equity ratio is very high at 2.32 and currently higher than the industry average, implying that there is very poor management of debt levels within the company. Despite the company's weak debt-to-equity ratio, the company has managed to keep a very strong quick ratio of 3.57, which shows the ability to cover short-term cash needs.
  • The gross profit margin for MEDIVATION INC is currently extremely low, coming in at 3.00%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, MDVN's net profit margin of 1.20% is significantly lower than the same period one year prior.
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Medivation, Inc., a biopharmaceutical company, focuses on developing novel small molecule drugs for the treatment of serious diseases in the United States and Europe. Medivation has a market cap of $2.8 billion and is part of the health care sector and drugs industry. Shares are up 70.8% year to date as of the close of trading on Wednesday.

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

Rating Change #2

Mid-America Apartment Communities 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, revenue growth, notable return on equity and solid stock price performance. 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:

  • MID-AMERICA APT CMNTYS 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. During the past fiscal year, MID-AMERICA APT CMNTYS INC increased its bottom line by earning $0.92 versus $0.54 in the prior year. This year, the market expects an improvement in earnings ($1.43 versus $0.92).
  • 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 170.1% when compared to the same quarter one year prior, rising from $8.84 million to $23.89 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 17.2%. Since the same quarter one year prior, revenues rose by 14.1%. Growth in the company's revenue appears to have helped boost the 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. When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, MID-AMERICA APT CMNTYS INC's return on equity is below that of both the industry average and the S&P 500.
  • After a year of stock price fluctuations, the net result is that MAA'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, the stock's 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 the other strengths this company displays justify these higher price levels.
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Mid-America Apartment Communities, Inc. is an independent real estate investment trust. The firm invests in the real estate markets of the United States. It is engaged in acquisition, redevelopment, new development, property management, and disposition of multifamily apartment communities. The company has a P/E ratio of 62.7, above the average real estate industry P/E ratio of 52.2 and above the S&P 500 P/E ratio of 17.7. Mid-America Apartment has a market cap of $2.8 billion and is part of the financial sector and real estate industry. Shares are up 10.4% year to date as of the close of trading on Tuesday.

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

Rating Change #1

Scotts Miracle Gro Co 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 and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:

  • SMG's revenue growth has slightly outpaced the industry average of 1.7%. 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.
  • 39.50% is the gross profit margin for SCOTTS MIRACLE-GRO CO which we consider to be strong. Regardless of SMG's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SMG's net profit margin of 10.80% compares favorably to the industry average.
  • SCOTTS MIRACLE-GRO CO's earnings per share declined by 6.8% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, SCOTTS MIRACLE-GRO CO reported lower earnings of $1.73 versus $2.93 in the prior year. This year, the market expects an improvement in earnings ($2.85 versus $1.73).
  • The debt-to-equity ratio is very high at 2.49 and currently higher than the industry average, implying that there is very poor management of debt levels within the company. Even though the debt-to-equity ratio is weak, SMG's quick ratio is somewhat strong at 1.24, demonstrating the ability to handle short-term liquidity needs.
  • 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 Chemicals industry and the overall market on the basis of return on equity, SCOTTS MIRACLE-GRO CO has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
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The Scotts Miracle-Gro Company manufactures and markets lawn and garden care products worldwide. The company has a P/E ratio of 19.5, below the average chemicals industry P/E ratio of 23.4 and above the S&P 500 P/E ratio of 17.7. Scotts Miracle Gro has a market cap of $3.35 billion and is part of the basic materials sector and chemicals industry. Shares are down 1.2% year to date as of the close of trading on Wednesday.

You can view the full Scotts Miracle Gro 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: AEG CPN ENB GS LNG MAA MDVN MRO SMG VIV