Analyst Upgrades

• Tyco Electronics (TEL) and Weight Watchers (WTW) to buy from neutral, and Smithfield Foods (SFD) to buy from underperform, at BofA/Merrill.
• Red Hat (RHT) to overweight from equal weight at Morgan Stanley.
• Gold Fields (GFI) to overweight from neutral at HSBC.
• Novartis (NVS) to outperform from neutral and GlaxoSmithKline (GSK) to neutral from underperform at Credit Suisse.
• Dollar General (DG) to buy from hold at ThinkEquity.
• Eagle Rock Energy (EROC) to outperform from sector perform at RBC Capital.

I first discussed Fuel Systems Solutions Inc. (FSYS) on August 17, 2009, at a price of $30.42, and the alternative fuel system manufacturer reported strong second-quarter results Thursday. I obviously still like the shares here.

In its second quarter report, Fuel Systems reported earnings per share of 39 cents compared to the 22-cent First Call estimate. Revenue totaled $99.8 million compared to the First Call estimate of $89.5 million. Fuel Systems, surged $3.81 to $33.36 on the news on Thursday at mid-day.

Analyst Upgrades

• Keefe Bruyette upgraded East West Bancorp (EWBC) to outperform from market perform after the company acquired assets from Washington First International Bank. The firm has a $21 price target for shares.
• Piper Jaffray upgraded Amylin (AMLN) to overweight from neutral, citing valuation and Bydureon's profile. The firm maintains a $26 price target for shares.
• Soleil upgraded MGM Mirage (MGM) to hold from sell, citing signs of stabilization in Vegas and valuation. The firm upped its target for shares to $13 from $11.10.
• T. Rowe Price (TROW) was upgraded to outperform from market perform at FBR Capital.
• JetBlue (JBLU) was upgraded to buy from neutral at BofA/Merrill.
• NetEase.com (NTES) was upgraded to buy from hold at Standpoint Research.

Here are some highlights from this past week's earnings coverage on BloggingStocks:

• Activision Blizzard Inc. (ATVI) saw shares rise following its report of better-than-expected Q1 earnings.
• Beazer Homes USA Inc. (BZH) posted a Q2 profit and revenue growth, and announced a stock offering.
• CBS Corp. (CBS) reported improvements in both Q1 net income and cash flow, but shares declined.
• Clorox Co. (CLX) posted Q3 earnings that were higher than analysts had expected and offered weak guidance.
• First Solar Inc. (FSLR) reported quarterly earnings that easily topped analysts' expectations.

Sometimes, market events and macroeconomic concerns can weigh on even the best of company performances.

That was probably the case with Fuel Systems Solutions (FSYS), which trounced the Thomson/Reuters First Call first quarter earnings estimate of 91 cents, by earning $1.59. Fuel Systems earned 44 cents per share a year ago.

The market's response: muted, sluggish, even bearish, with the Fuel Systems' shares falling in-sync with the market's decline amid lingering concerns about Greek/European debt. Fuel Systems' shares have fallen throughout the week, including a $1.50 drop to $26.86 on Friday at mid-day.

Analyst Upgrades

• Wells Fargo upgraded Universal Health (UHS) to outperform from market perform to reflect the company's potential acquisition of Psychiatric Solutions (PSYS). The firm sees a 60% chance of Universal Health acquiring Psychiatric Solutions and estimates the deal would be accretive.
• Oppenheimer upgraded Lamar Advertising (LAMR) to outperform from perform following the company's Q1 results and Q2 guidance as it expects growth to pick up in Q3. The firm has a $44 price target for shares.
• UBS upgraded Las Vegas Sands (LVS) to buy from neutral based on valuation and Singapore outlook. The firm raised its price target to $28 from $24.
• Priceline.com (PCLN) was upgraded to buy from hold at ThinkEquity.
• Alcoa (AA) Was upgraded to outperform from market perform at BMO Capital.
• Brookfield Asset Management (BAM) was upgraded to outperform from neutral at Credit Suisse.

It's been a volatile six months, to say the least, for bi-fuel/alternative fuel system manufacturer Fuel Systems Solutions (FSYS). I first discussed Fuel Systems here on August 17, 2009 at a price of $30.42. The stock gapped-up to $44 in the fall 2009, then hurdled through key, psychological resistance at $50, only to give it all back in 2010, with the stock current trading around $32.

In its fourth quarter report, Fuel Systems said it expects 2010 revenue of $400 million to $450 million on 130,000-140,000 delay original equipment manufactured installations (DOEMs), down from 183,000 completed in 2009, due to the expiration of 2009 subsidy programs in Italy, a major market for the company.

I'm reiterating my buy rating for alternative fuel systems company Fuel Systems Solutions Inc. (FSYS), first recommended on August 17, 2009, at a price of $30.42. Here's why:

Fuel Systems appears to be well-positioned to benefit from Congress' proposed extension of tax incentives and credits for natural gas vehicles and infrastructure. The proposed bill also mandates that 50% of the U.S. government's vehicle fleet convert to natural gas in the years ahead. The First Call FY2009/FY2010 EPS estimates for FSYS are $2.44 to $2.68. That FY2010 EPS will likely prove to be low.

Alternative fuel system company Fuel Systems Solutions Inc. (NASDAQ: FSYS) continues to progress. The company Thursday reported Q3 EPS of 77 cents versus the 43 cents First Call EPS estimate and the stock was up $8.82 to $42.63 at mid-day. I'm reiterating my Buy rating for the company, first recommended on August 17, 2009 at a price of $30.42, but wait for a pull-back following Thursday's surge. If bought FSYS in August, you're up about 40%.

Fuel Systems' Q3 revenue increased 10% to $116.2 million, with the company reporting a record 47,000 systems installations, up from 37,000 and 30,000 in Q2 and Q1, respectively. Demand for alternative fuel vehicles was strong, especially in Italy, which offset weakness in its industrial business, and a negative foreign exchange impact, the company noted.

Readers of my columns know that my investment bias favors the energy sector, including companies that offer alternative energy solutions. And with the aforementioned in mind Fuel Systems (NASDAQ: FSYS) is worth a review.

Fuel System appears to be well-positioned to benefit from Congress' proposed extension of tax incentives and credits for natural gas vehicles and infrastructure. The proposed bill also mandates that 50% of the U.S. government's vehicle covert to natural gas in the years ahead. The First Call FY2009/FY2010 EPS estimates for FSYS are $1.61 to $1.97.

Analyst Upgrades

• Citigroup upgraded Deutsche Bank (NYSE: DB) to Hold from Sell citing reduced legacy risks and strength in the fixed income franchise.
• Janney Montgomery upgraded Fuel Systems (NASDAQ: FSYS) to Buy from Neutral based on valuation, the OEM market in Europe for alternative transportation is growing faster than expected, and the $30M equity raise was smaller than expected.
• Freeport McMoRan (NYSE: FCX) was upgraded to Outperform from Market Perform by FBR Capital. The firm believes that the company will benefit from copper supply issues over the long term, and it thinks the stock has reached an attractive entry point.
• Black & Decker (NYSE: BDK) was upgraded to Neutral from Underperform at Credit Suisse.
• American Tower (NYSE: AMT) was raised to Overweight from Neutral at JPMorgan.
• EMC Corp. (NYSE: EMC) was upgraded at Barclays to Overweight from Equal Weight.

Analyst upgrades:

• Citigroup upgraded Patriot Coal (NYSE: PCX) to Hold from Sell on easing credit and liquidity concerns following the company's guidance. The firm raised its target on the stock to $7.50 from $4.
  
• UBS upgraded Research In Motion (NASDAQ: RIMM) to Buy from Neutral and raised their target to $90 from $65 as they expect pent-up replacement demand in enterprise to drive 2010 estimates higher and for the consumer smartphone opportunity to grow in 2009 and 2010.
  
• Goldman upgraded Suncor (NYSE: SU) to Conviction Buy from Sell and raised their target to $33 from $25 citing their bullish view on crude oil for 2H09 and 2010 and in the company's ability to lower operating and capital costs in the oil sands region.
• Canadian National (CNI) was raised to Overweight from Neutral at JP Morgan.
  
• Applied Micro Circuits (NASDAQ: AMCC) was lifted at Oppenheimer to Overweight from Neutral.
  
• QLogic (NASDAQ: QLGC) was upgraded to Outperform from Neutral at Baird.

While the release of economic data doesn't stop next week (see economic schedule highlights below), the earnings season does wind down dramatically. Most of the S&P 500 companies already have reported on the past quarter, which means dismal earnings news is largely behind us, at least for a while. About the only companies of note expected by analysts surveyed by Thomson Reuters to report falling earnings this week are Costco Wholesale Corp. (NASDAQ: COST), Wendy's/Arby's Group Inc. (NYSE: WEN), Foot Locker Inc. (NYSE: FL), Bank of Montreal (NYSE: BMO), and Steinway Musical Instruments Inc. (NYSE: LVB).

While PetSmart Inc. (NASDAQ: PETM) and Big Lots Inc. (NYSE: BIG) quarterly profits are expected to be about the same as a year ago, Liz Claiborne Inc. (NYSE: LIZ), Kenneth Cole Productions Inc. (NYSE: KCP), Ciena Corp. (NASDAQ: CIEN), and Trina Solar Ltd. (NYSE: TSL) are expected to have swung to losses in the most recent quarter.

This post is part of a special annual report -- Top Stock Picks '09 -- in which TheStockAdvisors.com asked 75 leading newsletter advisors to select their favorite investment for the new year.

For his top idea for 2009, Bob Bogda looks to a play on reducing the world's dependence on fossil fuels. In SmallCapInvestor, the advisor selects Fuel Systems Solutions (NASDAQ: FSYS).

"When it comes to reducing the world's dependence on fossil fuels, there are abstract theories and then there are practical tools.

"Fuel Systems Solutions falls squarely into the latter category, as a growing number of car and bus manufacturers discover how its equipment helps vehicles run more efficiently on cleaner sources of fuel, investors are reaping the benefits.