Analyst Upgrades

• Applied Materials (AMAT) to overweight from neutral at Piper Jaffray.
• Air Products (APD) to buy from hold at Citigroup.
• Youku.com (YOKU) and Pinnacle West (PNW) to buy from neutral at Goldman.
• Stryker (SYK) and Zimmer (ZMH) to buy from neutral at UBS.
• Zions Bancorp (ZION) to outperform from neutral at Macquarie.
• Alnylam (ALNY) to buy from hold at Needham.
• AK Steel (AKS) to buy from hold at KeyBanc.

CarMax (KMX), a used-car entity that counts AutoNation (AN) as a related company, was seeing a bid this afternoon. With a little less than 1 hour to go before the market closes up shop, shares were higher by over 6% to $25.65. The 52-week low for the stock is $18.62, and the 52-week high is $26.50, so investors are currently optimistic about the prospects for the business.

According to the Associated Press, net profit came in at 48 cents per share. The analysts were calling for 40 cents per share. That was a nice beat. CEO Tom Folliard was pleased with his sales team's ability to move inventory.

Analyst Upgrades

• Soleil upgraded Starwood Hotels (HOT) to buy from hold, citing accelerating RevPAR comps and valuation. The firm upped its target for shares to $57 from $55.
• TD Newcrest upgraded Ivanhoe Mines (IVN) to speculative buy from hold based on valuation.
• BMO Capital upgraded Power Integrations (POWI) and ON Semiconductor (ONNN) to outperform from market perform based on valuation. The firm has a $45 target on Power Integrations and a $9 target on ON Semiconductor.
• Priceline.com (PCLN) was upgraded to buy from neutral at Goldman.
• Reliance Steel (RS) was upgraded to buy from neutral at UBS.
• AXA (AXA) was upgraded to add from neutral at WestLB.
  

America's Car-Mart Inc. (CRMT), an automotive retailer whose colleagues include AutoNation Inc. (AN) and CarMax Inc. (KMX), reported what I thought was an excellent fourth quarter. But the shares aren't performing how one might think they would perform given the data.

At the time of this writing during the afternoon session, my screen showed a quote of $24.53 for the stock. That was up three little pennies. Not much action there, my trading friends. And I'll tell you, there hasn't been much excitement in the stock over the last few months. If you take a look at the following chart, you'll see a narrow, boring range of sideways action.

TheStreet.com's Jim Cramer says don't heed the pundits -- allow yourself to believe things are improving.

Skeptical, or impossible? That's how I am posing the dilemma of the "pull through" argument whether it involves Ford (NYSE: F) (Cramer's Take) and "Cash for Clunkers" or Hovnanian (NYSE: HOV) (Cramer's Take), Lennar (NYSE: LEN) (Cramer's Take), Toll (NYSE: TOL) (Cramer's Take), KB Home (NYSE: KBH) and Pulte (NYSE: PHM) (Cramer's Take) and the $8,000 tax credit.

Right now any time there is a stimulus program of any sort, the pundits/media/money managers all decide the most important single issue isn't what it will do to the numbers, or whether it will work at all, but what will it do to the "pull through." How much of future sales will it "steal"?

The Pep Boys -- Manny, Moe & Jack (NYSE: PBY) issued Q2 earnings on Tuesday after the bell. The aftermarket service business for automobiles, whose related companies include AutoZone (NYSE: AZO) and AutoNation (NYSE: AN), said net sales fell about 2%, and earnings per share increased 50% to 15 cents. The earnings growth was actually better than that since there were a couple of items in the previous year's quarter that benefited the bottom line.

According to Reuters, the expectation was for 14 cents per share in net income. Yep, we got the beat-by-a-penny cliche in full effect here. Management credited cost containment and service sales as drivers for the quarter.

CarMax (NYSE: KMX), an expert in used automobiles and a colleague of AutoNation (NYSE: AN), is up today nearly 14% in early-afternoon trading on spectacular volume. What's driving (pun intended!) the buying action? You guessed it...earnings. Revenues for the first quarter decreased 17%. Adjusting for items, CarMax earned $0.22 per share, and, according to my colleague Melly Alazraki, that figure simply annihilated earnings projections developed by the analysts.

Well, well, well...what to do now, right? CarMax is an interesting company in an interesting time. It sells used cars during a period when new cars aren't selling too well. We all know about the problems at Ford (NYSE: F) and General Motors (OTC: GMGMQ). But that isn't reason enough to put money down on this stock. Especially not after a rally like we're seeing today.

Analyst upgrades:

• Citigroup upgraded Lennar (NYSE: LEN) to Buy from Hold as it believes the company's near-term liquidity profile is improved following the $400M debt issuance. The firm raised its target price to $12 from $11.
• Jefferies upgraded Rowan Companies (NYSE: RDC) to Buy from Hold as it believes jack-up drillers will continue to outperform deepwater names. The firm raised its target price to $27 from $20.
• Keefe Bruyette upgraded First Financial (NASDAQ: FFIN) to Market Perform from Underperform to reflect more positive loan data for the Texas banks. The firm raised its target price on shares to $44 from $38.
• MGM Mirage (NYSE: MGM) was upgraded to Overweight from Neutral at JP Morgan.
• Morgan Stanley (NYSE: MS) was upgraded to Outperform from Market Perform at JMP Securities.
• Brinker (NYSE: EAT) was upgraded to Overweight from Equal Weight at Barclays.

TheStreet.com's Jim Cramer is seeing signs of a coming boom, but he's still being cautious here.

If you had to define the early cycle, if you had to outline what stocks should be soaring coming out of a recession into a boom and which ones should be faltering, you would have to say the action in this market in the last month is the quintessential behavioral pattern.

What are the components of the early cycle? First, it's the homebuilders. As is typical coming out of a recession, the stocks precede the bottom of housing. That's exactly what's happening with the lowest permits and highest affordability and best mortgage rates and massive inventory. Everywhere, except on Wall Street reporting, the bottom is bursting out. When you read the lead story in the Sunday Philadelphia Inquirer, and it is all about the thousands of prospective homebuyers heading south to pick up condos and homes for half of what they were worth two years ago -- or even less -- and you know that virtually no one has broken ground in the Sunshine State in a year, you can bet that the bottom's actually behind us. This housing market has wiped out all but the most stable private builders and even the public ones are merging as we know from Pulte (NYSE: PHM) (Cramer's Take) and Centex (NYSE: CTX) (Cramer's Take). So, in the next cycle, you can see some profitability developing year over year even though the new homes don't have much margin because the foreclosed homes next door are going for a song. And don't believe this won't change the dynamic of future foreclosures. In most areas, rent is higher than the interest on mortgages, so you will find that second or third job needed to stay in your home. The incentive structure's radically different than a year ago.

Okay, maybe I'm too bearish, but I'm not sure I could possibly buy stock in CarMax (NYSE: KMX). The used-car dealer, a colleague of AutoNation (NYSE: AN), reported some good profit growth on Thursday, but I just don't like the guidance (or lack thereof) and the sales figures.

Most of all, though, I think buying CarMax now might be violating the buy-low-sell-high principle. Who knows, maybe I should just join the momentum party. The stock is up over 60% over the year-to-date period as of Thursday. See the dilemma a potential buyer would be in?

This is the fourth in a four part series which I hope gives buyers, sellers, shareholders and dare I say management a platform for discussion.

This week I envisioned an eBay (NASADQ: EBAY) without Skype, eBay Motors and Paypal. Everything goes to the highest bidder, excluding handling and delivery of course.

While EBay might benefit from selling Skype and Motors, considering they might be worth more to others like Cisco Systems (NASDAQ: CSCO) and AutoNation Inc. (NYSE:AN), it should not sell PayPal unless it is contemplating a merger, since the acquiring company most likely would want PayPal to be an integral part of any deal.

Ebay is going through some growing pains right now but it is still a primary center of activity on the web. Although there are many disgruntled sellers that have left the site or been forced off because of the constant changes in the rules, it really has only one main rival and that is Amazon.com (NASDAQ: AMZN).

This is the second in a four part series which I hope gives buyers, sellers, shareholders and dare I say, management, a platform for discussion.

Now that I have unloaded Skype from eBay (NASDAQ: EBAY) in Tuesday's post (Serious Money: eBay should auction off Skype), it's time to move on to an asset that is not losing money, eBay Motors, but may be of more value to one of its competitors like Carmax (NYSE: KMX) or AutoNation (NYSE: AN).

It might also find a home with Amazon.com (NASDAQ: AMZN), its closest competitor in non-automotive categories. There is also the possibility that any number of auto-parts companies like AutoZone Inc (NYSE: AZO) or even the online car referral site Autobytel Inc. (NASDAQ: ABTL) would find eBay Motors a very compelling addition.

The Big Three American automakers might want to compete for this great asset. Since General Motors (NYSE: GM), Ford Motors (NYSE: F) and Chrysler are having difficulty selling new cars, expanding used car sales would be enticing. The problem is they are basically broke and holding on to a thread for dear life. That is not the case for Honda (NYSE: HMC) and Toyota Motor Corp. (NYSE: TM). Perhaps eBay Motors might find a place in their long term plans.

TheStreet.com's Jim Cramer says our problems are so widespread, he sees lots more IndyMacs before we're out.

You don't need me to tell you it's awful out there. You don't need me to tell you that there's no quick fix for any of these things. But what might help you understand why it feels so bad this time is that I have never, in my career, seen so many companies go off track at the same time. This is one unbelievable moment, and it is made more horrible by the day as companies' stocks just get pummeled, causing people to then question the very viability of the companies involved.

First, obviously, are Fannie Mae (NYSE: FNM) (Cramer's Take) and Freddie Mac (NYSE: FRE) (Cramer's Take). We don't know what will happen, but we do know that their futures are much darker than their pasts. Their best hope: a Democrat becomes president and shows the usual love to both. But as investments, they are pretty much perma-losers going forward. The losses are that heavy. Yes, it is true that two years from now they will be better, but will the government let them limp through to that? View them as calls on a Democratic win.

We all know that Citigroup (NYSE: C) (Cramer's Take), Wachovia (NYSE: WB) (Cramer's Take), Washington Mutual (NYSE: WM) (Cramer's Take) and National City (NYSE: NCC) (Cramer's Take) are in trouble. Bank of America (NYSE: BAC) (Cramer's Take) says it isn't in trouble, but obviously the market doesn't believe management because the stock failed to rally when it said its dividend was safe. Any short-selling hedge fund could hire 30 actors and have them line up at a Washington Mutual or two and get a bank run going. Then we would have to hear about a "hasty" Treasury department plan to bail out WM. Hasty? How can these guys not see it coming?

Lexmark (NYSE: LXK) is trading up 13% on good earnings.

VMWare (NYSE: VMW) is down 25% on a weak forecast.

Zoran (NASDAQ:Z RAN) is off almost 20% on a poor outlook for Q1.

EMC (NYSE: EMC) is down 8% on VWWare results. EMC owns a large piece of VMW.

Trading in the pre-market may be different than trading in the regular session.

Douglas A. McIntyre is an editor at 247wallst.com.

MAJOR PAPERS:

• The Wall Street Journal's "Deal Journal" reported that Sam Zell's planned buyout of Tribune Company (NYSE: TRB) is contingent on the receipt of a solvency opinion, and that this is the first time they have ever seen a deal dependant on this.
• The WSJ's "Heard on the Street" reported that Countrywide Financial Corporation (NYSE: CFC) may not be out of the woods yet. Despite executives promising a return to profitability, there is still a risk the company may eventually seek bankruptcy protection or "resort to huge sales" of new stock.
• U.S. private equity group JC Flowers "is understood" to have walked away from the auction for troubled bank Northern Rock, the Financial Times reported.
• Rupert Murdoch is shaking up the management of News Corp (NYSE: NWS.A), the Financial Times reported, giving his son, James Murdoch, control over the company's European and Asian operations, and appointing two trusted executives to lead Dow Jones & Company Inc (NYSE: DJ) and the Wall Street Journal.

WEB SITES:

• Barron's Online's "Weekly Trader" said AutoNation Inc (NYSE: AN) looks attractive now, despite hovering near a multi-year low. The company has also been on a slow but steady quest to diversify away from unpopular domestic brands by snapping up luxury and import dealerships.