Analyst Upgrades

• Citigroup upgraded Freeport McMoRan (FCX) to buy from hold to reflect valuation, as well as its increased forecasts for copper and aluminum. The firm raised its price target on shares to $95 from $85.
• Citigroup also upgraded Alcoa (AA) to buy from hold and reiterated a buy rating on Cliffs Natural (CLF).
• William Blair upgraded WESCO International (WCC) to outperform from market perform. The upgrade reflects the firm's belief that WESCO's sales trends will become increasingly positive from easy comparisons over the next 12 months.
• RBC Capital upgraded Thomson Reuters (TRI) to top pick from outperform. The firm sees attractive returns over the next 12 to 18 months as the company's headwinds subside, and it raised its target price on shares to $43 from $41.
• Motorola (MOT) was upgraded to hold from sell at Societe Generale.
• American Express (AXP) was upgraded to buy from neutral at BofA/Merrill.
• Schnitzer Steel (SCHN) was upgraded to buy from neutral at UBS.

Is it time to take a bite out of Apple, Inc (AAPL) or leave it on the vine? After reviewing the current list by examining the stock yields and price-to-cash flow (P/CF) we will take a look at Apple for 2010.

Yesterday I dropped two stocks, but the list is still too long. In the coming weeks there will be more cuts and if I find anything of more value perhaps there will be something new.

Today it's time to do some trimming of the fourteen stocks and four options on the contenders list. This review will prioritize the companies by price-to-book (P/B), price-to-sales (P/S) and return-on-equity (ROE). This does not preclude more possible stocks being added and the final list will not be done until the end of the month.

We will also compare recent stock prices to three-year highs to give us a relative idea where the stock floated in rosier times.

Only three weeks to go before the list of contenders are finalized into my ten picks for 2010. There were 14 before I added three more today and moved one of the stocks on the fence up, leaving another three still on the fence.

I continue to read everything I can get my hands on and recommend doing the same to anyone else seeking to do some stock picking. A lot of the recommendations I come across project possible appreciation of 10% to 15%, and that would be great, but I am seeking at least the potential to double that.

We started this review with 25 stocks of companies noted for their quality of management and how successful they have been at nurturing new leaders as presented in Fortune magazine. After running them through a serious screening process using universally agreed upon key metrics, the list has been reduced to six candidates for potential investment.

I will reiterate that there is no imperative to invest in any of them even if they might be among the best opportunities from a select list. While I think all of the original companies listed and stocks screened are well regarded that does not mean now is the right time to invest.

Regardless of the outcome of this process, and since price and timing are critical, it would be smart to create a stock watch-list with the inclusion of all six of these companies.

This is the third screening to find value among Fortune's 25 corporate world leaders that have demonstrated an ability to regenerate themselves from within. The list has been cut to 18 and will be cut further here.

The methodology of using basic stock data points to identify potential value investments only sets the stage for success -- it assures nothing. While it is true that paying less is better than paying more and getting a higher yield is better than less, this gives you a scant picture of what is in people's hearts and minds, and that is harder to judge. Like the weather, no matter the predictions, you may not find out it is raining until you are standing in it. Regardless, it should be advantageous to start with good stock (pun intended) before you take to whittlin', and that we have.

Yesterday I started a review of 25 companies that Fortune deemed most successful according to their peers in developing quality leadership. Today I review the remaining 20, searching to find the ones that might be worth investing in.

Price-to-book (from 11/27/09) was used as the first value screen. The theory being from a value investor's perspective that buying for a price at or near the break-up value of the company provides downside protection. Of course that is easier said than done.

The recent issue of Fortune magazine discusses how the best of the best train, guide and nurture top managers to become the leaders that will propel their corporations successfully forward. They list the top 25 companies, which I have used as the basis of a new review to see how they would fair against common metric screens.

In the past few months, many articles have posited that large-cap stocks should excel in the coming year based on their lagging the market behind smaller, more volatile stocks flying out of the March lows. I do not believe this is universally true. Plenty of large-cap stocks did well, such as Anadarko Petroleum (APC), Apple (AAPL) and Google (GOOG), while many small caps went nowhere. Even among the large caps included in Fortune's "Leadership 25," some have doubled.

Analyst upgrades:

• FBR upgraded Abercrombie & Fitch (ANF) to reflect strong channel checks over the Black Friday weekend. The firm raised its target on shares to $46 from $39.
• Morgan Stanley upgraded Safeway (SWY), citing improvements in pricing.
• Baird upgraded US Bancorp (USB) based on valuation. The firm raised its target price to $29 from $25.
• HSBC Holdings (HBC) was upgraded to buy from neutral at BofA/Merrill.
• Genzyme (GENZ) was upgraded to buy from hold at Citigroup.
• Deere (DE) was upgraded to outperform from market perform at Wells Fargo.

Deere (DE) reported fourth-quarter results today. Even though the well-known maker of agricultural equipment had a tough year, the company's stock currently sits near a 52-week high as the bulls hope the worst is behind it.

On an adjusted basis, Deere posted a profit of 23 cents per share. This number easily beat the analysts, as they believed Q4 was only worth about 3 cents per share, according to our earnings preview.

U.S. stock futures advanced Wednesday morning ahead of what is going to be a busy day full of economic reports before Thanksgiving. While investor sentiment is still upbeat following the Federal Reserve minutes and optimism about the economy, trading could be choppy today given the market is closed tomorrow. The market will reopen Friday for a short day.

U.S. stocks fell on Tuesday on lackluster economic data, namely the GDP revision downward. However, the losses eased after the FOMC minutes and the Fed raised its growth expectations for 2010.

Deere & Co. (DE), maker of the iconic John Deere tractor, is scheduled to discuss its fiscal fourth-quarter 2009 financial results in a conference call Wednesday, November 25, at 10:00 AM ET, hosted by Chief Financial Officer Jim Field. You can catch the live webcast of the call on the company's website.

During the three months that ended in October, Deere planned to invest in Russia, reached a tentative agreement with the UAW and announced some layoffs. Analysts surveyed by Thomson Reuters expect the agricultural equipment maker to report that earnings for that period plunged from $0.81 per share a year ago to $0.03 per share. And revenue for the quarter is expected to be 34.1% lower to $4.4 billion.

Analyst upgrades:

• Jefferies upgraded Starbucks (SBUX) to buy from hold, citing EPS and revenue momentum heading into 2010. The firm raised its target to $25 from $22.
• Soleil upgraded Zions Bancorp (ZION) to buy from hold on valuation as it believes the recent pullback provides an attractive entry point. The firm has a $17.50 price target on shares.
• RBC Capital expects Rigel Pharmaceuticals (RIGL) to sign a partnership for R788 in the next four months to run its global Phase III program. Shares were upgraded to outperform from sector perform and its target was raised to $11 from $9.
• Deere (DE) was upgraded to overweight from equal weight at Morgan Stanley.
• Shire (SHPGY) was raised to outperform from market perform at Bernstein.
• Ann Taylor (ANN) was upgraded to overweight from market weight at Thomas Weisel.
• J.M. Smucker (SJM) was upgraded to overweight from neutral at JPMorgan.

TheStreet.com's Jim Cramer says it looks like the patent worries aren't so dire after all.

Now that we see that health care reform is not going to bring price caps or socialization of medicine, we are beginning to see some real expansion in the drug stocks, including Merck (MRK) (Cramer's Take), Bristol-Myers (BMY) (Cramer's Take) and Lilly (LLY) (Cramer's Take). But there is one drug stock that is continually met with skepticism -- Sanofi Aventis (SNY) (Cramer's Take), the French vaccine and pharmaceutical maker run by Christian Viehbacher. The resistance is obvious, as his biggest two drugs are coming off patent very soon, and his hope is that by 2013 the company might again reach 2008 levels.

Sounds like there's no reason to buy this one. Sounds like its 4% dividend isn't safe.

TheStreet.com's Jim Cramer says it's not too late to get on board these rocket ships.

During the great narrow bull market that was 2006-2007, anyone who hitched a ride on any bulk or oil carrier, any DryShips (DRYS) (Cramer's Take) or Diana (DSX) (Cramer's Take), or any Frontline (FRO) (Cramer's Take) or Nordic American Tanker (NAT) (Cramer's Take), or anyone who bought anything ag-related -- Deere (DE) (Cramer's Take), Monsanto (MON) (Cramer's Take), Potash (POT) (Cramer's Take) -- looked like a genius.

Beginning midyear last year, you looked like a moron.