Analyst Upgrades

• Wells Fargo (WFC) to conviction buy from neutral at Goldman.
• Adobe (ADBE) to buy from neutral at UBS.
• Fifth Third Bancorp (FITB) to outperform from market perform at FBR Capital.
• Vail Resorts (MTN) and Goldcorp (GG) to buy from hold at Deutsche Bank.
• OmniVision (OVTI) to overweight from neutral at JPMorgan.
• Penn Virginia (PVA) to hold from sell at Canaccord.
• Hub Group (HUBG) to outperform from market perform at Morgan Keegan.

Hub Group (NASDAQ: HUBG) is a leading freight transportation management company, specializing in cost-efficient intermodal methods. Goods are taken to and from Hub operating centers by truck and carried between centers by rail. The company operates a network of over 30 centers throughout the United States, Canada and Mexico. It also provides truck brokerage and logistics services involving shipment optimization, load consolidation, mode selection, carrier management and load planning.

The company pleased investors earlier in the month, when it reported Q4 EPS of 43 cents and revenues of $445.5 million. Analysts had been expecting 37 cents and $426.6 million. Management also guided FY08 EPS to the range $1.50-$1.62 ($1.57 consensus). Bear Stearns subsequently reiterated its "outperform" rating on the issue and boosted its price target to $40.

With energy prices skyrocketing, corporate America is intensely interested in ways of stretching its shipping dollars. Many companies work with a Downers Grove, Illinois firm that takes the cost efficient route all the way.

Hub Group (NASDAQ: HUBG) is a leading freight transportation management company, specializing in cost-efficient intermodal methods. Goods are taken to and from Hub operating centers by truck and carried between centers by rail. The company operates a network of over 30 centers throughout the United States, Canada and Mexico. It also provides truck brokerage and logistics services involving shipment optimization, load consolidation, mode selection, carrier management and load planning.

The company surprised the Street earlier in the month, when it reported Q1 EPS of 29 cents and revenues of $393.3 million. Analysts had been expecting 25 cents and $377.6 million. Management also guided FY07 EPS to the range $1.31-$1.40 ($1.36 consensus). Robert W. Baird subsequently upgraded the shares to "outperform" and declared a $40 price target. The issue popped on the news and then passed into a bullish "pennant" consolidation pattern. Stocks frequently exit pennants moving in the same direction they were traveling when they entered them. In this case, that would be to the upside.

Altogether, brokers recommend the shares with three "strong buys," two "buys" and three "holds." Analysts see a 21% average annual growth rate, through the next five years. The HUBG Price to Sales ratio (0.87), Price to Free Cash Flow ratio (23.33), EPS Growth rate (45.00%), Return on Assets (11.02%), Return on Investment (16.61%), Return on Equity (19.56%) and Revenue per Employee ($1.09M) compare favorably with industry, sector and S&P 500 averages.

Institutions 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 $19.76 and $37.20. A stop-loss of $31.70 looks good here.

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