Analyst Upgrades

• Piper Jaffray upgraded Duoyuan Global Water (DGW) to neutral from underweight, citing the potential for positive fundamental news flow through the end of the year, and upped its price target to $16 from $9.
• Jefferies upgraded Alcatel-Lucent (ALU) to buy from underperform, expecting a benefit from a significant ramp in EVDO software sales as mobile data growth accelerates.
• Myriad Genetics (MYGN) was upgraded at RBC Capital to outperform from sector perform with a $23 price target based on valuation and potential to be acquired.
• Goldman upgraded Mohawk (MHK) to neutral from sell with a $53 price target.
• Smithfield Foods (SFD) was upgraded to outperform from market perform at BMO capital with a $21 target.
• Priceline.com (PCLN) was upgraded to outperform from market perform at Morgan Keegan.

• Deutsche Bank upgraded Freeport McMoRan (NYSE: FCX) to Buy from Hold to reflect the company's better than expected Q3 results and improved volume outlook. Deutsche raised its target on shares to $100 from $72.
• Thomas Weisel upgraded Motorola (NYSE: MOT) to Overweight from Market Weight and raised its target to $11 from $7 and said they expect Motorola to benefit from several upcoming catalysts that include new Android-based smartphone products and they believe the handset division could break even by year end of 2010.
• Janney Montgomery upgraded Regal Entertainment (NYSE: RGC) and Cinemark (NYSE: CNK) to Buy from Neutral on expectations both companies will benefit from a strong box office in Q4. The firm has a $14 price target on Regal shares and a $13.50 target on Cinemark shares.
• Marshall & llsley (NYSE: MI) was upgraded to Neutral from Underweight at JPMorgan.
• F5 Networks (NASDAQ: FFIV) was upgraded to Neutral from Sell at UBS.
• William Blair upgraded Lindsay Corporation (NYSE: LNN) to Outperform from Market Perform.

Analyst upgrades:

• Wells Fargo transferred coverage of Cooper Industries (NYSE: CBE) with an Outperform rating, upgraded from the previous analysts' Market Perform rating. The firm believes commercial construction will be of less of a headwind for the company than the Street thinks, and has a $38-$41 valuation range on the stock.
• Kaufman Bros. upgraded SuccessFactors (NASDAQ: SFSF) to Buy from Hold after channel checks indicated demand trends picked up in July. The firm raised its target on shares to $15 from $12.
• UBS upgraded eBay (NASDAQ: EBAY) to Buy from Neutral and believes Marketplace transaction growth is "turning the corner." Additionally, the firm believes the secondary market represents a long-term opportunity for the company. The firm raised its target to $28 from $24.
• Novartis (NYSE: NVS) was upgraded to Buy from Hold at Jefferies.
• Arcelor Mittal (NYSE: MT) was upgraded to Buy from Hold at Citigroup.
• Cardinal Health (NYSE: CAH) was upgraded to Buy from Neutral at Goldman.
• Yahoo! (NASDAQ: YHOO) was upgraded to Outperform from Market Perform AMC Monday at Bernstein.

Wall Street's optimism in last week's preview about the earnings of tech stocks wasn't misplaced, as there were many more positive surprises than negative ones among the stocks we looked at. This week will bring plenty more data for investors in and watchers of the sector to mull over. Apple Inc. (NASDAQ: AAPL), AT&T Inc. (NYSE: T), and Microsoft Corp. (NASDAQ: MSFT), for example, are expected by analysts surveyed by Thomson Financial to post modest earnings gains from a year ago, to $1.11 per share (on $8.1 billion in sales), $0.72 per share (on $31.3 billion in sales), and $0.47 per share (on $14.8 billion in sales) respectively. All three of these companies ended the week closer to their 52-week lows than highs, and analysts on average consider them each a buy.

Here's a look at some of the week's biggest expected earnings gainers and decliners in the sector:

• Baidu.com Inc. (NASDAQ: BIDU): $1.25 per share (+44.0%) on revenues of $134.7 million (+103.2%)
• Broadcom Corp. (NASDAQ: BRCM): $0.44 per share (+38.6%) on revenues of $1.3 billion (+33.8%)
• QLogic Corp. (NASDAQ: QLGC): $0.31 per share (+29.0%) on revenues of $170.0 million (+21.2%)
• FLIR Systems Inc. (NASDAQ: FLIR): $0.32 per share (+28.1%) on revenues of $275.2 million (+44.0%)
• Juniper Networks Inc. (NASDAQ: JNPR): $0.30 per share (+26.7%) on revenues of $927.4 million (+26.2%)
• Waters Corp. (NYSE: WAT): $0.75 per share (+17.3%) on revenues of $391.6 million (+11.1%)
• Flextronics International Ltd. (NASDAQ: FLEX): $0.29 per share (+17.2%) on revenues of $8.7 billion (+57.3%)
• EMC Corp. (NYSE: EMC): $0.19 per share (+10.5%) on revenues of $3.7 billion (+12.9%)

No matter what any CEO, analyst, "guru", "market expert", strategist, fund manager, trader or message board poster says (few show all their trades and investments like me, nor are they up 60% in 2008, see details here), never try to catch a falling knife. Before I list all the current ones, I really have to pound it into your heads that buying these things in hugely uncertain -- and possibly disastrous -- times like these is not only dangerous, it's just plain irresponsible.

Here are some current falling knives:

• General Electric Co. (NYSE: GE)
• General Motors Corp (NYSE: GM)
• Citigroup Inc (NYSE: C)
• Merrill Lynch & Co Inc (NYSE: MER)
• Washington Mutual Inc (NYSE: WM)
• Bank of America (NYSE: BAC)
• American International Group Inc (NYSE: AIG)

Now, I don't want to hear those "I'm a long-term investor in blue-chip stocks" and "these are quality companies trading at discount prices"-type comments. While it's possible these stocks will bounce, the risk-reward ratio is downright awful here, just as its been for the past several months (as I've been warning in posts like this and this).

"Flir Systems Inc. (NASDAQ: FLIR) provides thermal-imaging and infrared camera equipment for military, law enforcement, and commercial applications," notes Leo Fasciocco.

In his Ticker Tape Digest, which focuses on stocks showing technical breakouts, he explains, "FLIR has convincingly broken out from a five-week base; the move was boosted by the win of a $359 million contract from the Army."

"FLIR, with annual revenues of $855 million, has been a sensational winner since 2001. It is a beneficiary of the war on terror and the need for equipment to combat it via military and security needs.

"Short-term, the daily chart shows the stock crossing its resistance line at 35.54. The move sends the stock over not only near-term resistance but also over the peak made back in early November. The action indicated very astute institutional buying.

The military and security applications of thermal imaging devices that allow users to see in the dark and poor weather are obvious. The potential enhancement of operations in such arenas as navigation safety, vehicle vision, environmental assessment, predictive maintenance and manufacturing control are becoming obvious. A leading provider of a range of application-specific instruments is headquartered in Wilsonville, Oregon.

FLIR Systems (NASDAQ: FLIR) designs and manufactures thermal imaging systems and infrared cameras, for a wide variety of thermography and imaging applications. The devices detect heat, allowing effective operation in darkness, fog and smoke. Clients use them in research and development, manufacturing process control, airborne observation, search and rescue, surveillance, reconnaissance and environmental monitoring. U.S. government agencies account for about one-third of FLIR's sales. Lockheed Martin (NYSE: LMT) is a major competitor.

FLIR pleased investors last week, when it reported Q3 EPS of 45 cents and revenues of $191.1 million. Analysts had been expecting 39 cents and $180.8 million. The firm set quarterly records for orders, backlog, and revenue. Management also guided FY07 EPS to $1.73-$1.78 ($1.69 consensus) and FY07 revenues to $755-$770 million ($749.31M consensus). The board declared a 2-for-1 split for December 10th. The share price popped on the news and then moved into a bullish "pennant" consolidation pattern. Stocks frequently exit pennants moving in the same direction they were traveling on entry. In this case, that would be to the upside.

Brokers recommend the issue with three "strong buys," three "buys," nine "holds" and a "sell." Analysts expect a 21% growth rate through the next year. The FLIR Sales Growth rate (43.47%), Operating Margin (25.47%), Net Profit Margin (17.97%), Return on Assets (15.53%) and Return on Investment (18.88%) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 95% of the outstanding shares. The stock is one of those used to calculate the S&P 600 SmallCap Index. Over the past 52 weeks, it has traded between $29.62 and $72.70. A stop-loss of $60.75 looks good here.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.

My recent Investing in Oregon post took a look at some companies that the Motley Fool had featured in its investigation of investment opportunities in the Beaver State, including Precision Castparts Corp. (NYSE: PCP), StanCorp Financial Group Inc. (NYSE: SFG), FLIR Systems Inc. (NASDAQ: FLIR), and Columbia Sportswear Co. (NASDAQ: COLM).

But the Motley Fool article also mentioned that one of the most prominent business influences in Oregon wasn't even headquartered in the state: semiconductor giant Intel Corp. (NASDAQ: INTC) from Santa Clara, California. It also included mention of four Oregon-based businesses that provided support for Intel: Tektronix Inc. (NYSE: TEK), Mentor Graphics Corp. (NASDAQ: MENT), Triquint Semiconductor Inc. (NASDAQ: TQNT), and Electro Scientific Industries Inc. (NASDAQ: ESIO). One could imagine that Intel's impressive earnings report this week should have been good news for these supporting companies.

Beaverton-based Tektronix, widely known as Tek, is one of the leading makers of test and measurement equipment, such as digital multimeters, logic analyzers, and curve tracers, and oscilloscopes. Tek will win its seventh technical Emmy this year. Tek beat Wall Street expectations in its previous three quarters, reporting earnings per share of 40 cents for its first quarter FY2008. But the consensus of analysts surveyed by Thomson Financial was to hold shares of Tek. The share price reached a 52-week high of $37.95 on Monday when it was announced that Danaher Corp. (NYSE: DHR) will acquire Tek. Tool and equipment maker Danaher just announced record third quarter results.

The end of Oregon Trail may not be the trapping and logging region that it once was, but the Beaver State still has a thriving agriculture sector, including such products as potatoes, apples, hops, and hazelnuts (more than 90% of domestic production of hazelnuts). But the Pacific Northwest is known today as a high-tech region, with growth through both domestic relocation and foreign immigration. The lack of a sales tax in Oregon probably doesn't hurt when it comes to attracting investment and labor.

When the Motley Fool investigated investment opportunities in Oregon earlier this year, first on their list was, of course, Oregon's largest public company, Beaverton-based Nike Inc. (NYSE: NKE), the world's largest shoemaker. We pretty regularly cover Nike here at BloggingStocks. The Motley Fool also took a look at Precision Castparts Corp. (NYSE: PCP), StanCorp Financial Group Inc. (NYSE: SFG), FLIR Systems Inc. (NASDAQ: FLIR), and Columbia Sportswear Co. (NASDAQ: COLM).

"The recent market volatility has shaken more than a few traders, leaving them wondering where they should turn next to protect themselves," notes Jocelynn Drake.

But one sector, she notes, that has performed well and should continue to do so, is the defense sector. In particular, the analyst with Schaeffer's Investment Research considers L-3 Communications (NYSE: LLL) and FLIR Systems (NASDAQ: FLIR) as "shining gems."

Drake notes, "Topping the list is L-3 Communications, which makes secure and specialized systems for satellite, avionics, and marine communications such as flight recorders (black boxes), display systems, and wireless telecom gear."

On July 26, she notes, the company reported a second-quarter profit of $1.49 per share, beating the consensus estimate by a nickel. Revenue for the quarter jumped 11% to 3.41 billion. Adding to its good news, she notes, was that L-3 boosted its 2007 earnings outlook.