Analyst Upgrades

• Polo Ralph Lauren (RL) to neutral from underperform at BofA/Merrill.
• Sigma-Aldrich (SIAL) to outperform from market perform at Leerink.
• Petrobras (PBR) to overweight from equal weight at Barclays.
• Silvercorp Metals (SVM) to buy from neutral at UBS.
• PROS (PRO) to buy from hold at Jefferies.
• Power Integrations (POWI) and Monolithic Power (MPWR) to buy from neutral at Roth Capital.
• Diodes (DIOD) to outperform from neutral at RW Baird.
• Whole Foods (WFMI) to hold from sell at Hapoalim.
• Sinclair Broadcast (SBGI) to overweight from neutral at JPMorgan.
• Sappi (SPP) to outperform from neutral at Macquarie.
• Alpha Natural (ANR) to buy from hold at BB&T.
• Watts Water (WTS) to buy from hold at Brean Murray.

"Our advice to buy Brazil as well as our advice to buy energy stocks have rewarded those who heeded them over the last few years; given this, it stands to reason, then, that investing in Brazilian energy is eminently sensible," says Jack Adamo.

The editor of Insiders Plus explains, "Our latest buy recommendation is Petroleo Brasileiro (PBR) -- or Petrobras for short.

"The reason for buying Brazil is clear: It is one of the fastest growing countries in the world and among the best of that group in terms of rule of law and honest financial markets.

We at BloggingStocks and everywhere else make the full gambit of prognostications, suggestions, predictions, guesses, analogies, and so forth in an attempt to improve potential investment opportunities for all our readers and provoke discussion.

All of this has its limits, but, if you are a fan of Professor Nassim NicholasTaleb and his best seller The Black Swan then you already have been warned that the events that have the greatest impact on our lives and our investments are most often unpredictable. We cannot predict the future nor can we anticipate the tragedies that will tank our portfolio's.

While I do believe predicting the future is, how should I say, futile, there are general clues as to which way the wind blows.

What does it mean when a stock is downgraded to "Outperform" from "Strong Buy" as Raymond James did this week? That was the analysis painted on Noble Corp. (NE) and it's hard to figure.

What is the difference? What are they telling investors? You should switch from betting the farm to only betting the house on this stock?

They reduced their price target to $41 from $44. Noble closed yesterday at $34.66, so Raymond James is still speculating on a gain over 20% in the next twelve months.

Analyst upgrades:

• Citigroup upgraded Lubrizol (LZ) to Hold from Sell following the company's analyst day citing its continued pricing power in lubricants. Citi upped its target price for shares to $115 from $82.
• Janney Montgomery upgraded Viacom (VIA) to Buy from Neutral citing the company's ratings improvement, 2011 film slate, and video game pipeline. The firm has a $45 price target for shares.
• BMO Capital resumed coverage on Gammon Gold (GRS) with an Outperform from a Market Perform following the its equity issue. The firm has a $12.50 price target on the stock.
• Comerica (CMA) and First Horizon (FHN) were upgraded to Buy from Hold at Deutsche Bank.
• Prudential (PRU) was upgraded to Equal Weight from Underweight at Barclays.
• Itron (ITRI) was upgraded to Hold from Sell at Stifel Nicolaus.

Last week's Barron's (Sept. 6) was full of great stock insights and the favorable reports on Noble Corp. (NE) and Raytheon Company (RTN) were well articulated. Often you hear that by the time the news hits the streets, it's too late to get in on the bargain. This is a myth; both of these stocks are good examples proving the point because they were bargains before the stories were published and remain so today.

This is not to say that a broadly published story will not have an impact on the stock price -- it may. However, there is not a one to one correlation and there are many other factors to weigh. Also, given the number of financial publications, blogs, press releases, analysts calls and more, almost every company's stock is in the news, if not daily then weekly.

Petroleo Brasiliero (PBR) closed up $1.49 to $37.48. PBR aims to raise $64 billion to fund PBR's plans to develop offshore oil fields. Crude oil futures are recently down 1.41% to $73.96 a barrel according to Bloomberg. PBR call option volume of 31K contracts compared to put volume of 33K contracts. September put option implied volatility is at 30, October is at 36, January is at 40 versus its 26-week average of 35, according to Track Data, suggesting larger price movement.

Expedia, Inc. (EXPE) closed at $25.43. EXPE shares have recently rallied; likely due to the news Google, Inc. (GOOG) proposed acquisition of ITA may face a lengthy review process by the U.S. Department of Justice. October put option implied volatility is at 41, January is at 45: versus its 26-week average of 40 according to Track Data, suggesting larger January price movement.

Options Update is by Stock Specialist Paul Foster of theflyonthewall.com.

Unemployment and non-Farm payrolls managed to keep the bears in hibernation this Friday, although that post-release gain and cheer was a bit more muted through most of the trading day. The fact that most trading desks were light and that a hurricane was off the east coast and most investors were either not in at all or gone by 11 AM made for a quiet rest of the day.

Here were the unofficial closing bell levels:

Dow Jones 10,447.86 +127.76 (1.24%)
S&P 500 1,104.44 +14.34 (1.32%)
Nasdaq 2,233.75 +33.74 (1.53%)

Top Analyst Calls

Until recently, my largest positions were in financial stocks Citigroup (C), Wells Fargo (WFC) and Bank of America (BAC). As a contrarian investor, I do buy on fear and sell on greed as "my pal Warren" has advised for many years. This has worked out to be very profitable over the past 18 months. However, in the past 30 days the financial stocks have dropped to second place in favor of oil and gas stocks.

I think the economic recovery is moving at a snail's pace, lowering anticipated demand for oil while gas was already depressed based on the same factors and the addition of numerous new large supplies. Add to this the mess in the Gulf of Mexico and the public's already negative sentiment about oil companies and you have the makings of depressed pricing in the sector.

Market Vector Gold Miners (GDX) closed at $53.43. Gold rallied 1.66% to $1240. GDX May and June put option implied volatility of 39 is below its 26-week average of 43, according to Track Data, suggesting decreasing price movement.

Petrobras (PBR) closed at $38.18. Crude oil futures closed down 1.24% to $75.42 a barrel according to Bloomberg. PBR overall option implied volatility of 39 is near its 26-week average of 37, according to Track Data, suggesting slightly larger price movement.

Update is by Stock Specialist Paul Foster of theflyonthewall.com

The stock chart of integrated oil/natural gas company Petroleo Brasileiro SA (PBR), also known as Petrobras, which I first wrote about on April 23, 2009, at a price of $33.99, has recovered slightly, but has not broken out of a long-term bear-hug pattern.

Hence, it's probably best to exit the shares at the current roughly $42 to $43 price and take the $8 to $9 gain.

The stock chart of Petroleo Brasileiro SA (PBR), also known as Petrobras, has deteriorated, hence I'm placing a hold on the company's shares, first recommended, on April 22, 2009, at a price of $32.99.

Petrobras remains on-track for 5% to 6% oil/natural gas production growth for FY2010 or about 2.55 million barrels of oil equivalent per day; longer-term, a roughly 7% to 7.5% average annual production increase is seen for 2011-2013.

Insurance companies have $12 billion in indirect investments related to Iran, according to California Insurance Commissioner Steve Poizner -- and he wants them to stop. He's pushing insurers in his state to divest, and the perspective is gaining popularity: his counterpart in Florida thinks the policy should go national.

Kevin McCarty, commissioner in Florida, said to National Underwriter, "I have consulted with other state insurance commissioners to evaluate the practicality of developing a national initiative similar to the undertaking by the California Department of Insurance." He's already contacted the National Association of Insurance Commissioners' Securities Valuation Office to figure out "the feasibility of leveraging national resources to review the financial statements of national insurers to determine their exposure to companies with operations in Iran."

It goes without saying that the investment strategy advocated here favors integrated oil companies, particularly those with a regional or product advantage. And with the aforementioned in mind, I'm reiterating my buy rating for Petroleo Brasileiro SA (PBR), also known as Petrobras, first recommended on April 22, 2009, at a price of $32.99. If you bought PBR in April, you're up an impressive 47%.

Petrobras remains on-track for 5% to 6% oil/natural gas production growth for FY2009 or about 2.54 million barrels of oil equivalent per day; longer-term, a roughly 7% to 7.5% average annual production increase is seen for 2010 to 2013.

It's goes without saying that I favor integrated oil plays, particularly those with a product or regional advantage. Therefore, I'm Reiterating my Buy rating for Petroleo Brasileiro SA (NYSE: PBR), also known as Petrobras, first recommended on April 23, 2009 at a price of $32.99. If you purchased PBR at that time, you're up a nice 30%.

Petrobras is performing better than forecast: Q2 oil/natural gas production increased 5.7%, to 2.524 million barrel per day of oil equivalent (MMbbl./day). Moreover, PBR is on track for 5-6% production growth for the year.