Can a publication honor a company that is not doing well?

One of our competitor has it's stock going downwards as their product sales have declined in 2007. However they have managed to get honored by a publication that has given them an award for having the right strategies in place to grow in 2008. Is such an award valid. Do honors such as "Cool Company" from Gartnere, "Company's to Watch", "RedHerring Top 100" are misleading honors from publications or can a publication do what it pleases when honoring companies?

Yes, they can. Many newspapers and magazines offer editorial publicity to their advertisers to get them to sign annual agreements. This is perfectly legal.
You can contact the pub and do the same thing, if your company is willing to advertise, but don't expect them to publish anything unflattering about your competitor.

Yes, they can honor who ever they want. But, obviously, they will lose respect if they make dumb choices.

Just because a company is down does not mean that it is out (of business).
Many companies implement sales and marketing strategies which end up turning the company around.
It is certainly an honor to be recognized for doing things that have the potential to make the company profitable.

Many people disregard such ratings simply because they assume kickbacks are involved in garnering the rating. I've heard it said specifically that Gartner Group is a joke in their recommendations but did work for at least one Fortune 500 that subscribed to their "services".

I also recall working for a hotel chain once that several 5 Diamond Awards and even within the company many of us believed the awards were "bought". (Although we all believed our hotels were at least 4 Diamond - the awards for the 5 Diamonds seemed somewhat random to us.)

Interestingly it is the feeling that many ratings are "bought" that makes Consumer Reports magazine so zealously fight any attempt to use its ratings in the advertising for the products rated. That is to say if they say "Samsung makes the best cell phone" you'll never see that in Samsung's advertising even though Samsung would dearly love to use it. They'd actually get sued by Consumers' Union (the organization that publishes Consumer Reports).