TheStreet Ratings Top 10 Rating Changes

Tickers in this article: CEDU DIOD EV HK MDP PHM RGP STRA TEO TRNS

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 27 U.S. common stocks for week ending July 6, 2012. 21 stocks were upgraded and 6 stocks were downgraded by our stock model.

Rating Change #10

Transcat Inc has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, robust 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 a generally disappointing performance in the stock itself and poor profit margins.

Highlights from the ratings report include:

  • TRANSCAT INC has improved earnings per share by 14.3% 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 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, TRANSCAT INC increased its bottom line by earning $0.43 versus $0.37 in the prior year. This year, the market expects an improvement in earnings ($0.51 versus $0.43).
  • Despite its growing revenue, the company underperformed as compared with the industry average of 23.6%. Since the same quarter one year prior, revenues rose by 19.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Trading Companies & Distributors industry average. The net income increased by 11.1% when compared to the same quarter one year prior, going from $1.09 million to $1.21 million.
  • TRNS'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 41.25%, 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. 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, TRNS is still more expensive than most of the other companies in its industry.
  • The gross profit margin for TRANSCAT INC is currently lower than what is desirable, coming in at 27.80%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 3.90% trails that of the industry average.

Transcat, Inc. engages in the distribution of professional grade handheld test and measurement instruments, as well as provides calibration, repair, and other measurement services in the United States, Puerto Rico, and Canada. The company has a P/E ratio of 13.1, equal to the average electronics industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Transcat has a market cap of $41.8 million and is part of the technology sector and electronics industry. Shares are down 50.9% year to date as of the close of trading on Friday.

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

Rating Change #9

ChinaEdu Corporation 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 increase in net income. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, disappointing return on equity and weak operating cash flow.

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 3.4%. Since the same quarter one year prior, revenues rose by 29.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • CEDU 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 2.74, which clearly demonstrates the ability to cover short-term cash needs.
  • CHINAEDU CORP -ADR 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, CHINAEDU CORP -ADR reported lower earnings of $0.16 versus $0.34 in the prior year. This year, the market expects an improvement in earnings ($0.35 versus $0.16).
  • 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 Diversified Consumer Services industry and the overall market, CHINAEDU CORP -ADR's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$5.18 million or 353.81% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

ChinaEdu Corporation, together with its subsidiaries, provides educational services to the online degree programs of universities in the People's Republic of China. The company has a P/E ratio of 119, above the average diversified services industry P/E ratio of 37.8 and above the S&P 500 P/E ratio of 17.7. ChinaEdu has a market cap of $106.7 million and is part of the services sector and diversified services industry. Shares are down 2.1% year to date as of the close of trading on Tuesday.

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

Rating Change #8

Diodes Inc has been downgraded by TheStreet Ratings from buy to hold. Among the primary strengths of the company is its solid financial position based on a variety of debt and liquidity measures that we have evaluated. At the same time, however, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and deteriorating net income.

Highlights from the ratings report include:

  • DIOD's debt-to-equity ratio is very low at 0.08 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 2.88, which clearly demonstrates the ability to cover short-term cash needs.
  • The revenue fell significantly faster than the industry average of 20.0%. Since the same quarter one year prior, revenues fell by 10.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 30.61%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 76.19% 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, DIOD is still more expensive than most of the other companies in its industry.
  • The gross profit margin for DIODES INC is currently lower than what is desirable, coming in at 33.50%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 3.40% significantly trails the industry average.
  • Net operating cash flow has decreased to $13.45 million or 14.51% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, DIODES INC has marginally lower results.

Diodes Incorporated, together with its subsidiaries, designs, manufactures, and supplies application specific standard products in the discrete, logic, and analog semiconductor markets primarily in Asia, North America, and Europe. The company has a P/E ratio of 24.4, below the average electronics industry P/E ratio of 24.7 and above the S&P 500 P/E ratio of 17.7. Diodes has a market cap of $854.2 million and is part of the technology sector and electronics industry. Shares are down 11.9% year to date as of the close of trading on Tuesday.

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

Rating Change #7

Telecom Argentina SA 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 good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including poor profit margins and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 4.3%. Since the same quarter one year prior, revenues rose by 14.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Diversified Telecommunication Services industry average. The net income increased by 2.6% when compared to the same quarter one year prior, going from $155.43 million to $159.48 million.
  • TEO'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 55.25%, 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 gross profit margin for TELECOM ARGENTINA STET-FRNCE is currently lower than what is desirable, coming in at 32.10%. It has decreased significantly from the same period last year. Regardless of the weak results of the gross profit margin, the net profit margin of 13.60% is above that of the industry average.

Telecom Argentina S.A., together with its subsidiaries, provides telecommunication services to residential customers, businesses, and governmental agencies in Argentina and internationally. It operates in two segments, Fixed Telephony and Mobile Services. The company has a P/E ratio of four, equal to the average telecommunications industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Telecom Argentina has a market cap of $2.33 billion and is part of the technology sector and telecommunications industry. Shares are down 33.2% year to date as of the close of trading on Tuesday.

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

Rating Change #6

Strayer Education Inc 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 and notable return on equity. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.

Highlights from the ratings report include:

  • The gross profit margin for STRAYER EDUCATION INC is rather high; currently it is at 54.60%. Regardless of STRA's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, STRA's net profit margin of 16.00% compares favorably to the industry average.
  • STRA, with its decline in revenue, slightly underperformed the industry average of 3.2%. Since the same quarter one year prior, revenues fell by 13.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • 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 Diversified Consumer Services industry and the overall market, STRAYER EDUCATION INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The share price of STRAYER EDUCATION INC has not done very well: it is down 16.60% 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. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.
  • STRAYER EDUCATION INC's earnings per share declined by 25.4% 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, STRAYER EDUCATION INC reported lower earnings of $8.83 versus $9.70 in the prior year. For the next year, the market is expecting a contraction of 21.6% in earnings ($6.92 versus $8.83).

Strayer Education, Inc., through its subsidiary, Strayer University, provides post-secondary education services for working adults. The company has a P/E ratio of 13.7, equal to the average diversified services industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Strayer has a market cap of $1.33 billion and is part of the services sector and diversified services industry. Shares are up 15.2% year to date as of the close of trading on Friday.

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

Rating Change #5

Halcon Resources Corp has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, 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, weak operating cash flow and feeble growth in the company's earnings per share.

Highlights from the ratings report include:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 12.0%. Since the same quarter one year prior, revenues slightly increased by 4.3%. 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.
  • The current debt-to-equity ratio, 0.35, is low and is below the industry average, implying that there has been successful management of debt levels. Along with this, the company maintains a quick ratio of 29.17, which clearly demonstrates the ability to cover short-term cash needs.
  • Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, HALCON RESOURCES CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • 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 236.2% when compared to the same quarter one year ago, falling from -$9.91 million to -$33.32 million.
  • Net operating cash flow has significantly decreased to -$9.20 million or 318.81% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

Halcon Resources Corporation, an independent energy company, engages in the acquisition, production, exploration, and development of onshore oil and natural gas properties in the United States. Halcon has a market cap of $1.36 billion and is part of the basic materials sector and energy industry. Shares are down 26.9% year to date as of the close of trading on Tuesday.

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

Rating Change #4

Meredith Corporation 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, attractive valuation levels, expanding profit margins, largely solid financial position with reasonable debt levels by most measures 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:

  • MDP's revenue growth trails the industry average of 13.4%. Since the same quarter one year prior, revenues slightly increased by 2.0%. 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 gross profit margin for MEREDITH CORP is rather high; currently it is at 60.50%. 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 6.10% trails the industry average.
  • The current debt-to-equity ratio, 0.52, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that MDP'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.
  • After a year of stock price fluctuations, the net result is that MDP'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. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.

Meredith Corporation, a media and marketing company, engages in magazine publishing and related brand licensing, television broadcasting, integrated marketing, interactive media, and video production businesses in the United States. It operates in two segments, National Media and Local Media. The company has a P/E ratio of 13.4, below the average media industry P/E ratio of 13.8 and below the S&P 500 P/E ratio of 17.7. Meredith has a market cap of $1.15 billion and is part of the services sector and media industry. Shares are down 0.5% year to date as of the close of trading on Tuesday.

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

Rating Change #3

Eaton Vance Corporation has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its notable return on equity, good cash flow from operations 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:

  • 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 Capital Markets industry and the overall market, EATON VANCE CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly increased by 1101.64% to $56.57 million when compared to the same quarter last year. In addition, EATON VANCE CORP has also vastly surpassed the industry average cash flow growth rate of 223.99%.
  • EATON VANCE CORP's earnings per share declined by 12.0% 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, EATON VANCE CORP increased its bottom line by earning $1.75 versus $1.41 in the prior year. This year, the market expects an improvement in earnings ($1.88 versus $1.75).
  • Despite the weak revenue results, EV has outperformed against the industry average of 19.4%. Since the same quarter one year prior, revenues slightly dropped by 3.4%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • Despite the current debt-to-equity ratio of 1.91, it is still below the industry average, suggesting that this level of debt is acceptable within the Capital Markets industry.

Eaton Vance Corp., through its subsidiaries, engages in the creation, marketing, and management of investment funds in the United States. It also provides investment management and counseling services to institutions and individuals. The company has a P/E ratio of 15.4, equal to the average financial services industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Eaton Vance has a market cap of $3.17 billion and is part of the financial sector and financial services industry. Shares are up 16.5% year to date as of the close of trading on Friday.

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

Rating Change #2

Regency Energy Partners LP 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, impressive record of earnings per share growth, compelling growth in net income, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:

  • RGP's revenue growth has slightly outpaced the industry average of 12.0%. Since the same quarter one year prior, revenues rose by 12.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • REGENCY ENERGY PARTNERS LP 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, REGENCY ENERGY PARTNERS LP turned its bottom line around by earning $0.29 versus -$0.17 in the prior year. This year, the market expects an improvement in earnings ($0.38 versus $0.29).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 102.5% when compared to the same quarter one year prior, rising from $14.07 million to $28.50 million.
  • Despite currently having a low debt-to-equity ratio of 0.42, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.02 is sturdy.
  • 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 Oil, Gas & Consumable Fuels industry and the overall market, REGENCY ENERGY PARTNERS LP's return on equity significantly trails that of both the industry average and the S&P 500.

Regency Energy Partners LP engages in gathering, treating, processing, compressing, and transporting natural gas and natural gas liquids (NGLs). The company has a P/E ratio of 16.4, below the average energy industry P/E ratio of 60.9 and below the S&P 500 P/E ratio of 17.7. Regency Energy has a market cap of $4.04 billion and is part of the basic materials sector and energy industry. Shares are down 3.6% year to date as of the close of trading on Tuesday.

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

Rating Change #1

PulteGroup Inc has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, 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 and poor profit margins.

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 30.6%. Since the same quarter one year prior, revenues slightly increased by 9.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Powered by its strong earnings growth of 70.00% and other important driving factors, this stock has surged by 39.51% 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.
  • The gross profit margin for PULTEGROUP INC is currently extremely low, coming in at 13.30%. Regardless of PHM's low profit margin, it has managed to increase from the same period last year.
  • Currently the debt-to-equity ratio of 1.60 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated.

PulteGroup, Inc., through its subsidiaries, engages in homebuilding and financial services businesses primarily in the United States. PulteGroup has a market cap of $4.11 billion and is part of the industrial goods sector and materials & construction industry. Shares are up 69.6% year to date as of the close of trading on Tuesday.

You can view the full PulteGroup 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.

Tickers in this article: CEDU DIOD EV HK MDP PHM RGP STRA TEO TRNS