"Our Buyback Premium Portfolio is beating the S&P 500 by more than 65% since its inception in 2000; the portfolio is up 54.48% vs. a decline of 10.56% in the S&P 500 over the same time frame," notes buyback specialist David Fried.

The editor of The Buyback Letter explains, "Here's a look at three new additions to this portfolio: Forest Labs (FRX), Dollar Tree (DLTR) and Ryder System (R).

"Forest Labs is an international pharmaceutical manufacturer and marketer perhaps best known for its top selling product, anti-depression drug Lexapro, which sold $587 million in its most recent quarter.

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.

Our recommendations center on a collection of five stocks that we believe, as a group, will outperform the market this month. The Buyback Premium Portfolio is beating the S&P 500 by more than 65% since its inception (August 2, 2000)! This portfolio is up 54.48% since inception (August 2, 2000) vs. a decline of 10.56% in the S&P 500 over the same time frame. We hope that you are participating in these profits. For the month of January 2011, The Buyback Premium Portfolio gained 1.18% vs. a gain of 2.27% in the S&P 500.

Oracle (ORCL) closed at $25.34. Overall option implied volatility of 26 is below its 26-week average of 30, according to Track Data, suggesting decreasing price movement.

Forest Labs (FRX) closed at $31.35. Q3 EPS are expected on Jan. 19. Forest Labs February and March put option implied volatility is at 29, August is at 30; near its 26-week average of 31, according to Track Data, suggesting non-directional price movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

Analyst upgrades:

• UBS upgraded Apple (NASDAQ: AAPL) to Buy from Neutral and raised its target to $265 from $170, citing higher iPhone expectations, new partnerships, and likely upward revisions to Street estimates driven by gross margins.
• Wells Fargo upgraded Comcast (NASDAQ: CMCSA) to Outperform from Market Perform. The firm views a possible deal between end General Electric's (NYSE: GE) NBC Universal positively, as it thinks NBC will provide higher-margin growth for Comcast.
• Janney Montgomery upgraded Michael Baker (AMEX: BKR) to Buy from Neutral after the company completed the sale of its Energy business. The firm raised its target on shares to $46 from $40.
• Jefferies assumed coverage of Endo Pharma (NASDAQ: ENDP) and upgraded the stock to Buy from Hold. The firm cites valuation, a strong base business, and solid cash flow for the upgrade, and has a $30 target price on shares.
• Marten Transport (NASDAQ: MRTN) was upgraded to Overweight from Equal Weight at Stephens.
• U.S. Bancorp (NYSE: USB) was upgraded to Outperform from Market Perform at Keefe Bruyette.

• VNUS Medical Technologies (NASDAQ: VNUS) patent infringement lawsuit against Angiodynamics (NASDAQ: ANGO), Diomed Holdings (AMEX: DIO), Vascular Solutions (NASDAQ: VASC) begins.
• Verizon Communications (NYSE: VZ) to report Q3 earnings; conference call at 8:30am.

• Sirius Satellite Radio (NASDAQ: SIRI) to report Q3 earnings; conference call at 8am.
• MGM Mirage (NYSE: MGM) to report Q3 earnings; conference call at 11am.
• U.S. Steel Corporation (NYSE: X) to report Q3 earnings; conference call at 2pm.

• Kraft Foods (NYSE: KFT) to report Q3 earnings; conference call at 8am.
• Smith Micro Software (NASDAQ: SMSI) to report Q3 earnings; conference call at 2pm.

• PDUFA date for Forest Laboratories (NYSE: FRX) and Mylan Laboratories' (NYSE: MYL) Nebivolol for hypertension.
• Ford Motor Company (NYSE: F) to report October sales at 1pm.
• General Motors Corporation (NYSE: GM) to report October sales at 2pm.

• PDUFA Date for Sciele Pharma's (NASDAQ: SCRX) Sular formulation
• PDUFA Date for GlaxoSmithKline's (NYSE: GSK) Variza for major depression disorder

MOST NOTEWORTHY:

• UBS upgraded shares of Banco Santander (NYSE: STD) to Buy from Neutral as they expect the acquisition of ABN Amro Holding NV (NYSE: ABN) assets in Brazil and Italy to boost earnings in 2008 and 2009.
  
• Friedman Billings added Acorda Therapeutics (NASDAQ: ACOR) to its Top Picks List, as they have confidence in fampridine-SR's safety profile.
  
• Agrium (NYSE: AGU) was upgraded to Sector Outperformer from Sector Performer at CIBC on valuation, as they believe the outlook for wholesale and retail is robust with all three nutrients at historical high levels.
• Annaly Capital Management (NYSE: NLY) was upgraded to Buy from Neutral at UBS, citing likely further FED cuts, benefits from recent secondary, and BVPS growth.
  
• RBC Capital upgraded shares of ImmunoGen (NASDAQ: IMGN) to Outperform from Sector Perform based on valuation, growing pipeline, valuable technology platform, and potential as an acquisition candidate.

• Soleil upgraded ExpressJet Holdings (NYSE: XJT) to Hold from Sell.
  
• Goldman upgraded Assurant (NYSE: AIZ) to Buy from Neutral.
  
• Merill upgraded Forest Labs (NYSE: FRX) to Buy from Neutral.
  
• Citigroup upgraded Domtar (NYSE: UFS) to Buy from Hold.

MOST NOTEWORTHY:

• JP Morgan upgraded shares of UBS (NYSE: UBS) to Neutral from Underweight as they believe the company can start fresh after yesterday's pre-announcement.
  
• Banc of America upgraded shares of ProLogis (NYSE: PLD) and AMB Property (NYSE: AMB) to Buy from Neutral to reflect their positive outlook on global industrial REITs and believes they are positioned to benefit from global demand for industrial space.
  
• Navteq Corporation (NYSE: NVT) was upgraded at Deutsche Bank to Hold from Sell to reflect the acquisition by Nokia Corporation (NYSE: NOK).
  
• Wachovia raised shares of PDL BioPharma Inc (NASDAQ: PDLI) to Outperform from Market Perform following the CEO resignation and potential sale of the company.

• Thor Industries (NYSE: THO) was upgraded to Buy from Gradually Accumulate at Soleil.
  
• Gabelli upgraded Hershey Company (NYSE: HSY) to Hold from Sell.
  
• Forest Laboratories (NYSE: FRX) was upgraded at Citigroup to Hold from Sell.
  
• Roth Capital upgraded Conexant Systems (NASDAQ: CNXT) to Hold from Sell.

MOST NOTEWORTHY:

• Following the withdrawal of Orapem, Forest Laboratories Inc (NYSE: FRX) was downgraded to Sell from Hold at Citigroup, with a $47 target, given the company's dependence on two products and early stage pipeline.

• The St. Joe Co (NYSE: JOE) was downgraded to Underperform from Market Perform at Wachovia, citing valuation and secondary-home sale activity which continues to pressure steady primary-home activity in core markets; BB&T also downgraded St. Joe, to Hold from Buy on valuation.

• Deutsche Bank downgraded Tyco Int'l Ltd (NYSE: TYC) to Hold from Buy on valuation with a $33 target, as they find shares fairly valued heading into the separation.

• Bank of America downgraded Alltel Corp (NYSE: AT) to Neutral from Buy on valuation and lowered its target to $58 from $66.

• UBS downgraded Sohu.com Inc (NASDAQ: SOHU) to Neutral from Buy, with a $28 target, following second-quarter results. Lehman Brothers downgraded Sohu.com to Equal Weight from Overweight on the news.

• Merrill Lynch downgraded Centerne Corp (NYSE: CNC) to Sell from Neutral.

• Merrill also downgraded Ingersoll-Rand Co Ltd (NYSE: IR) to Neutral from Buy, citing weakness in the residential market and execution uncertainty for the downgrade.

• Bank of America downgraded Post Properties Inc (NYSE: PPS) to Sell from Hold following the company's Q4 report and guidance.

• BB&T downgraded Oakley Inc (NYSE: OO) to Hold from Buy on valuation.