MOST NOTEWORTHY: The ethanol sector, BT Group, AMR Corp and Kyphon were today's noteworthy downgrades:

• Friedman Billings downgraded Aventine Renewable Energy (NYSE: AVR) and Pacific Ethanol Inc (NASDAQ: PEIX) to Underperform and VeraSun Energy Corporation (NYSE: VSE) was downgraded to Market Perform from Outperform. The firm said the ethanol market has become increasingly challenging as spot market prices have declined by 30% in the past few months and expect pressure to remain through 2008 as the industry's growing pains continue.
  
• Morgan Stanley downgraded shares of BT Group (NYSE: BT) to Underweight from Equal Weight on valuation and regulation uncertainty ahead of Ofcom's first consultation document next week.
  
• AMR Corporation (NYSE: AMR) was downgraded to Sell from Neutral at Goldman to reflect the company's U.S. exposure as they expect the U.S. economy to slow.
  
• Banc of America downgraded shares of Kyphon Inc (NASDAQ: KYPH) to Neutral from Buy on valuation as the spread on the acquisition by Medtronic Inc (NYSE: MDT) has now narrowed.

OTHER DOWNGRADES:

• Pepsi Bottling Group Inc (NYSE: PBG) was downgraded to Market Perform from Outperform at Bernstein.
  
• Oppenheimer downgraded Signature Bank (NASDAQ: SBNY) to Neutral from Buy.
  
• ThinkEquity downgraded BioCryst Pharmaceuticals (NASDAQ: BCRX) to Accumulate from Buy.
  
• Merrill Lynch downgraded Luxottica Group (NYSE: LUX) to Neutral from Buy.

In May and June, I wrote a series on what I think could be the top 25 stocks for the NEXT 25 years. It was a fun exercise and a lot of work. Since the series finished in mid-June, we've been knocked down from 25 stocks to 22 stocks: Opsware (NASDAQ: OPSW), Kyphon (NASDAQ: KYPH) and Color Kinetics (NASDAQ: CLRK) are all being acquired for significant premiums by obviously much larger companies.

We have another on our list that, although it's not being acquired, the stock has doubled in value these past 2 1/2 months. Blue Coat Systems (NASDAQ: BCSI) was written up on June 8. The stock was trading at $44, but it's now at $84.80. Blue Coat reported an absolutely explosive July quarter. Revenues came in at $62.4 million versus Street consensus of $58 million, representing a 71% year-over-year increase and a 15% up-sequentially from the April quarter.

The wide-area-network (WAN) optimization product set is gaining mainstream momentum. The even better news for Blue Coat Systems is that it is about to embark on an excellent new product cycle. The company saw bookings, pipeline and deferred revenues all go up substantially this past quarter and provide tremendous visibility going forward.

MOST NOTEWORTHY: Getty Images (GYI), Jackson Hewitt (JTX), Electronic Data (EDS), RC2 Corp (RCRC) and Chipotle Mexican Grill (CMG) were today's noteworthy downgrades:

• Deutsche Bank cut Getty Images (NYSE: GYI) to Sell from Hold citing deterioration in its core business. Gabelli downgraded Getty Images to Hold from Buy after the company lowered guidance to reflect the changing industry dynamics.

• Goldman cut Jackson Hewitt (NYSE: JTX) to Sell from Neutral citing near-term risks that include the renegotiation of the HSBC (HBC)/RAL contract, the DoJ/IRS investigation, and decreasing performance in tax.

• Jefferies downgraded Electronic Data Systems (NYSE: EDS) to Hold from Buy to reflect the company's slowing cash flow improvement.

• Wedbush downgraded RC2 Corp (NASDAQ: RCRC) to Buy from Strong Buy on the lower sales forecast for 2007. Soleil cut shares to Hold from Gradually Accumulate to reflect uncertainty over the Thomas recall and increased competition.

• Chipotle Mexican Grill (NYSE: CMG) was downgraded to Market Perform from Outperform based on valuation...

OTHER DOWNGRADES:

• Lazard downgraded Kyphon (NASDAQ: KYPH) to Hold from Buy.

• SMH Capital cut Aventine Renewable Energy (NYSE: AVR) to Sell from Neutral.

• Credit Suisse downgraded AutoDesk (NASDAQ: ADSK) to Neutral from Buy.

• UBS cut SABMiller (OTC SBMRY) to Reduce from Neutral.

• CIBC downgraded Marvell Tech (NASDAQ: MRVL) to Sector Performer from Outperformer.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

MOST NOTEWORTHY: RadioShack (RSH), Weyerhauser (WY), Goodyear Tire (GT), Hot Topic (HOTT) and Unilever (UL, UN) were today's noteworthy downgrades:

• Citigroup downgraded RadioShack (NYSE: RSH) to Sell from Hold on valuation as they believe shares have priced in a more aggressive top-line recovery than the company can deliver over the next 12 months and that margin improvement is likely to slow.

• Merrill downgraded Weyerhauser (NYSE: WY) to Neutral from Buy based on the tighter credit environment and the impact on a potential containerboard divestiture or merger.

• Matrix downgraded shares of Goodyear Tire (NYSE: GT) to Sell from Hold to reflect rising oil prices and negative fundamental trends.

• AG Edwards downgraded Hot Topic (NASDAQ: HOTT) to Sell from Hold to reflect negative performance momentum and a lack of back-to-school prospects.

• Credit Suisse downgraded Unilever (NYSE: UN, UL) to Underperform from Neutral as their analysis suggests the company continues to lose market share...

OTHER DOWNGRADES:

• Baird cut Franklin Electric (NASDAQ: FELE) to Underperform from Neutral.

• Bear Stearns downgraded Kyphon (NASDAQ: KYPH) to Peer Perform from Outperform.

• Jarden (NYSE: JAH) was cut to Neutral from Buy at Goldman.

• Citigroup downgraded PetroChina (NYSE: PTR) to Hold from Buy.

• Alacatel-Lucent (NYSE: ALU) was downgraded to Neutral from Buy at Goldman.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

MOST NOTEWORTHY: American Home Mortgage (AHM), Biogen Idec (BIIB), Bebe Stores (BEBE), Ingersoll-Rand (IR) and SK Telecom (SKM) were today's more noteworthy downgrades:

• RBC Capital cut American Home Mortgage (NYSE: AHM) to Sector Perform from Outperform citing the deterioration in the global debt markets for the downgrade.

• Morgan Stanley downgraded shares of Biogen Idec (NASDAQ: BIIB) to Underweight from Equal Weight citing risk to Rituxan growth.

• Merriman downgraded Bebe Stores (NASDAQ: BEBE) to Neutral from Buy as they believe new fall merchandise is not performing well enough to improve sales trends.

• Robert W. Baird downgraded shares of Ingersoll-Rand (NYSE: IR) to Neutral from Outperform citing higher risk premium due to the IRS challenge and tighter credit markets that could impact the Bobcat divestiture.

OTHER DOWNGRADES:

• Children's Place (NASDAQ: PLCE) was cut to Neutral from Positive at Susquehanna.

• Thomas Weisel downgraded LoopNet (NASDAQ: LOOP) to Market Weight from Overweight.

• ThinkEquity cut Kyphon (NASDAQ: KYPH) to Accumulate from Buy.

• Needham downgraded QLogic (NASDAQ: QLGC) to Hold from Buy.

• JMP Securities downgraded ValueClick (NASDAQ: VCLK) to Market Perform from Outperform.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required)

Well, there goes another one of our top 25 for the NEXT 25 years! This morning it was announced that giant medical device company Medtronic (NYSE: MDT) will acquire Kyphon (NASDAQ: KYPH) for $71 a share in an all cash transaction. Great deal for Medtronic and a great deal for Kyphon shareholders. Unfortunately, that takes our NEXT 25 list down to 22 companies left. Hewlett-Packard is acquiring Opsware and Philips of the Netherlands is acquiring Color Kinetics (NASDAQ:CLRK). Now, I have to find the three replacement companies to complete our list of 25!

Medtronic, I have contended for years, is the premiere medical device company in the world. The company is the franchise player in the cardiac world with a multitude of products. The staple of products ranges from cardiac surgical tools to pacemakers and implantable cardiac defibrillators. Medtronic's spinal franchise has had its share of struggles. The company has been set on working with younger patients with spinal afflictions. Kyphon, on the other hand, is very strong in working with older patients with its products that address osteoporosis. This affliction attacks nearly 700,000 woman annually in the United States alone. Kyphon's minimally invasive surgical devices and patented bone-cement were fast becoming the products of choice by surgeons.

The acquisition by Medtronic puts Kyphon's excellent product suite into the best distribution sales and marketing force the medical device industry has ever seen.

Meanwhile, I will continue my research to provide you with 3 more companies to round out our list of the top25 stocks for the NEXT 25 years.

Georges Yared is the CIO of Yared Investment Research.

MOST NOTEWORTHY: Today's noteworthy downgrades involved Hilton Hotels Corp (HLT), TransAlta Corp (TAC), Cascade Corp (CAE), Activison (ATVI) and Atheros Communications (ATHR):

• Stifel downgraded Hilton Hotels (NYSE: HLT) to Hold from Buy at Stifel based on the recent acquisition.

• TD Newcrest cut TransAlta (NYSE: TAC) to Sell from Hold and doesn't consider an LBO of the company likely.

• Rodman cut Cascade (NYSE: CAE) to Market Underperform from Market Perform based on valuation.

• Activision (NASDAQ: ATVI) was downgraded to Neutral from Outperform at JP Morgan based on valuation and the competitive environment.

• AG Edwards believes Atheros Communications (NASDAQ: ATHR) has a less favorable risk/reward and cut shares to Hold from Buy...

OTHER DOWNGRADES:

• Needham downgraded Kyphon (NASDAQ: KYPH) to Buy from Strong Buy.

• UBS downgraded Taiwan Semiconductor (NYSE: TSM) to Neutral from Buy.

• Deutsche Bank cut Chicago Mercantile Exchange Holdings (NYSE: CME) to Hold from Buy.

• Roche Holding Ltd (OTC: RHHBY) was downgraded to Hold from Buy at Citigroup.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).