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