TheStreet Ratings Top 10 Rating Changes

Tickers in this article: AES HAL LM MDU MFC MGM REGN SBH TAP TDW

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 130 U.S. common stocks for week ending August 10, 2012. 48 stocks were upgraded and 82 stocks were downgraded by our stock model.

Rating Change #10

Legg Mason 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:
  • LM's debt-to-equity ratio is very low at 0.22 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
  • Despite the weak revenue results, LM has outperformed against the industry average of 30.0%. Since the same quarter one year prior, revenues fell by 14.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Capital Markets industry and the overall market on the basis of return on equity, LEGG MASON INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • LEGG MASON 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. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, LEGG MASON INC reported lower earnings of $1.53 versus $1.66 in the prior year. For the next year, the market is expecting a contraction of 5.9% in earnings ($1.44 versus $1.53).
  • 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 115.8% when compared to the same quarter one year ago, falling from $59.95 million to -$9.46 million.

Legg Mason, Inc. provides asset management and related financial services to institutional and individual clients, company-sponsored mutual funds, and other pooled investment vehicles worldwide. The company has a P/E ratio of 19.8, below the average financial services industry P/E ratio of 24.2 and above the S&P 500 P/E ratio of 17.7. Legg Mason has a market cap of $3.6 billion and is part of the financial sector and financial services industry. Shares are up 6.9% year to date as of the close of trading on Tuesday.

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

Rating Change #9

MGM Resorts International 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, generally weak debt management, 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 Hotels, Restaurants & Leisure industry. The net income has significantly decreased by 104.2% when compared to the same quarter one year ago, falling from $3,441.99 million to -$145.45 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 Hotels, Restaurants & Leisure industry and the overall market, MGM RESORTS INTERNATIONAL's return on equity significantly trails that of both the industry average and the S&P 500.
  • The debt-to-equity ratio is very high at 2.33 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, MGM's quick ratio is somewhat strong at 1.15, demonstrating the ability to handle short-term liquidity needs.
  • The share price of MGM RESORTS INTERNATIONAL has not done very well: it is down 20.38% 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.
  • MGM RESORTS INTERNATIONAL 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, MGM RESORTS INTERNATIONAL turned its bottom line around by earning $5.56 versus -$3.23 in the prior year. For the next year, the market is expecting a contraction of 108.3% in earnings (-$0.46 versus $5.56).

MGM Resorts International, through its subsidiaries, owns and operates casino resorts. Its casino resorts offer gaming, hotel, convention, dining, entertainment, retail, and other resort amenities. The company has a P/E ratio of 1.8, equal to the average leisure industry P/E ratio and below the S&P 500 P/E ratio of 17.7. MGM Resorts International has a market cap of $4.59 billion and is part of the services sector and leisure industry. Shares are down 10.1% year to date as of the close of trading on Wednesday.

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

Rating Change #8

Sally Beauty 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, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we find that we feel that the company's cash flow from its operations has been weak overall.

Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 9.6%. Since the same quarter one year prior, revenues slightly increased by 6.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • The gross profit margin for SALLY BEAUTY HOLDINGS INC is rather high; currently it is at 50.10%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 7.80% is above that of the industry average.
  • Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 0.32 is very low and demonstrates very weak liquidity.
  • Compared to its closing price of one year ago, SBH's share price has jumped by 57.81%, exceeding the performance of the broader market during that same time frame. Looking ahead, however, we cannot assume that the stock's past performance is going to drive future results. Quite to the contrary, its sharp appreciation over the last year is one of the factors that should prompt investors to seek better opportunities elsewhere.
  • Net operating cash flow has decreased to $58.47 million or 15.88% 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.

Sally Beauty Holdings, Inc., through its subsidiaries, engages in the distribution and retail of professional beauty supplies primarily in North America, South America, and Europe. The company operates in two segments, Sally Beauty Supply and Beauty Systems Group. The company has a P/E ratio of 19.2, below the average specialty retail industry P/E ratio of 22.8 and above the S&P 500 P/E ratio of 17.7. Sally Beauty has a market cap of $4.81 billion and is part of the services sector and specialty retail industry. Shares are up 26.5% year to date as of the close of trading on Tuesday.

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

Rating Change #7

AES Corp has been downgraded by TheStreet Ratings from buy to hold. The company's strongest point has been its strong cash flow from operations. At the same time, however, we also find weaknesses including generally poor debt management, disappointing return on equity and poor profit margins.

Highlights from the ratings report include:
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 6.5%. Since the same quarter one year prior, revenues slightly dropped by 5.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. 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.
  • 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 Independent Power Producers & Energy Traders industry and the overall market, AES CORP's return on equity is below that of both the industry average and the S&P 500.
  • The gross profit margin for AES CORP is rather low; currently it is at 24.80%. It has decreased from the same quarter the previous year.

The AES Corporation, a power company, operates a portfolio of electricity generation and distribution businesses. Its Generation business owns and/or operates power plants to generate and sell power to wholesale customers, such as utilities and other intermediaries. The company has a P/E ratio of 16.8, below the average utilities industry P/E ratio of 55.7 and below the S&P 500 P/E ratio of 17.7. AES has a market cap of $9.4 billion and is part of the utilities sector and utilities industry. Shares are up 3.5% year to date as of the close of trading on Tuesday.

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

Rating Change #6

Manulife Financial Corporation 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 Insurance industry. The net income has significantly decreased by 161.2% when compared to the same quarter one year ago, falling from $490.00 million to -$300.00 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 Insurance industry and the overall market on the basis of return on equity, MANULIFE FINANCIAL CORP underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • The gross profit margin for MANULIFE FINANCIAL CORP is currently extremely low, coming in at 8.60%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -2.70% is significantly below that of the industry average.
  • The share price of MANULIFE FINANCIAL CORP has not done very well: it is down 18.34% 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.
  • MANULIFE FINANCIAL 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 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, MANULIFE FINANCIAL CORP turned its bottom line around by earning $0.01 versus -$0.27 in the prior year.

Manulife Financial Corporation, together with its subsidiaries, provides financial protection and wealth management products and services to individuals and group customers primarily in Asia, Canada, and the United States. The company has a P/E ratio of 99.5, above the average insurance industry P/E ratio of 77.3 and above the S&P 500 P/E ratio of 17.7. Manulife Financial has a market cap of $19.87 billion and is part of the financial sector and insurance industry. Shares are up 3.1% year to date as of the close of trading on Friday.

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

Rating Change #5

Tidewater 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, increase in net income, good cash flow from operations 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:
  • TDW's revenue growth has slightly outpaced the industry average of 12.8%. Since the same quarter one year prior, revenues rose by 15.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The current debt-to-equity ratio, 0.38, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, TDW has a quick ratio of 1.75, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Energy Equipment & Services industry. The net income increased by 33.8% when compared to the same quarter one year prior, rising from $24.56 million to $32.86 million.
  • Net operating cash flow has significantly increased by 160.50% to $69.08 million when compared to the same quarter last year. In addition, TIDEWATER INC has also vastly surpassed the industry average cash flow growth rate of -51.27%.
  • 42.50% is the gross profit margin for TIDEWATER INC which we consider to be strong. 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 11.20% trails the industry average.

Tidewater Inc. provides offshore service vessels and marine support services through the operation of a fleet of marine service vessels. The company has a P/E ratio of 28.7, equal to the average transportation industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Tidewater has a market cap of $2.44 billion and is part of the services sector and transportation industry. Shares are down 0.9% year to date as of the close of trading on Thursday.

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

Rating Change #4

MDU Resources 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, increase in net income and increase in stock price during the past year. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 10.4%. Since the same quarter one year prior, revenues slightly increased by 4.0%. 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 and greatly outperformed compared to the Multi-Utilities industry average. The net income increased by 20.0% when compared to the same quarter one year prior, going from $45.07 million to $54.10 million.
  • The stock price has risen over the past year, but, despite its earnings growth and some other positive factors, it has underperformed the S&P 500 so far. 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.
  • MDU RESOURCES GROUP INC has improved earnings per share by 8.3% in the most recent quarter compared to 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, MDU RESOURCES GROUP INC reported lower earnings of $1.19 versus $1.29 in the prior year. For the next year, the market is expecting a contraction of 3.4% in earnings ($1.15 versus $1.19).
  • The gross profit margin for MDU RESOURCES GROUP INC is rather low; currently it is at 18.10%. Regardless of MDU's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 5.60% trails the industry average.

MDU Resources Group, Inc. operates as a diversified natural resource company in the United States. The company generates, transmits, and distributes electricity, as well as distributes natural gas. The company has a P/E ratio of 18.8, below the average materials & construction industry P/E ratio of 19.5 and above the S&P 500 P/E ratio of 17.7. MDU Resources Group has a market cap of $4.19 billion and is part of the industrial goods sector and materials & construction industry. Shares are up 3.5% year to date as of the close of trading on Friday.

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

Rating Change #3

Molson Coors Brewing Company 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, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures 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:
  • TAP's revenue growth has slightly outpaced the industry average of 1.7%. Since the same quarter one year prior, revenues slightly increased by 7.0%. 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.
  • Net operating cash flow has significantly increased by 52.99% to $347.00 million when compared to the same quarter last year. In addition, MOLSON COORS BREWING CO has also vastly surpassed the industry average cash flow growth rate of 0.86%.
  • The debt-to-equity ratio is somewhat low, currently at 0.63, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Despite the fact that TAP's debt-to-equity ratio is low, the quick ratio, which is currently 0.61, displays a potential problem in covering short-term cash needs.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. 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.

Molson Coors Brewing Company manufactures and sells beer and other beverage products. The company has a P/E ratio of 11.8, equal to the average food & beverage industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Molson Coors Brewing has a market cap of $6.69 billion and is part of the consumer goods sector and food & beverage industry. Shares are down 1.4% year to date as of the close of trading on Thursday.

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

Rating Change #2

Regeneron Pharmaceuticals 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, solid stock price performance, compelling growth in net income, impressive record of earnings per share growth and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • REGN's very impressive revenue growth greatly exceeded the industry average of 7.5%. Since the same quarter one year prior, revenues leaped by 182.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 201.44% and other important driving factors, this stock has surged by 185.67% 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, REGN 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 Biotechnology industry. The net income increased by 222.8% when compared to the same quarter one year prior, rising from -$62.51 million to $76.74 million.
  • REGENERON PHARMACEUT 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, REGENERON PHARMACEUT reported poor results of -$2.44 versus -$1.27 in the prior year. This year, the market expects an improvement in earnings ($2.66 versus -$2.44).
  • REGN's debt-to-equity ratio of 0.75 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 4.02 is very high and demonstrates very strong liquidity.

Regeneron Pharmaceuticals, Inc., a biopharmaceutical company, discovers, develops, and commercializes medicines for the treatment of serious medical conditions in the United States. Regeneron has a market cap of $13.12 billion and is part of the health care sector and drugs industry. Shares are up 151.9% year to date as of the close of trading on Friday.

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

Rating Change #1

Halliburton Company 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, largely solid financial position with reasonable debt levels by most measures, notable return on equity and attractive valuation levels. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • HAL's revenue growth has slightly outpaced the industry average of 12.8%. Since the same quarter one year prior, revenues rose by 21.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
  • The current debt-to-equity ratio, 0.33, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, HAL has a quick ratio of 1.78, which demonstrates the ability of the company to cover short-term liquidity needs.
  • 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 Energy Equipment & Services industry and the overall market, HALLIBURTON CO's return on equity exceeds that of both the industry average and the S&P 500.
  • HALLIBURTON CO reported flat earnings per share in the most recent quarter. 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, HALLIBURTON CO increased its bottom line by earning $3.26 versus $1.96 in the prior year. This year, the market expects an improvement in earnings ($3.30 versus $3.26).

Halliburton Company provides various products and services to the energy industry for exploring, developing, and producing oil and natural gas worldwide. It operates in two segments, Completion and Production, and Drilling and Evaluation. The company has a P/E ratio of 10, below the average energy industry P/E ratio of 10.6 and below the S&P 500 P/E ratio of 17.7. Halliburton has a market cap of $31.38 billion and is part of the basic materials sector and energy industry. Shares are down 0.3% year to date as of the close of trading on Wednesday.

You can view the full Halliburton 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: AES HAL LM MDU MFC MGM REGN SBH TAP TDW