MOST NOTEWORTHY: Tower sector stocks, Tesco Plc and Alcoa were today's noteworthy upgrades:
RBC Capital upgraded American Tower (NYSE:AMT), Crown Castle( NYSE::CCI), SBAComm (NASDAQ:SBAC) to Outperform from Sector Perform citing recent weakness in the tower sector group and a continued favorable outlook.
Merrill upgraded shares of Tesco (Other OTC:TSCDY) to Buy from Neutral as they believe it is the only proven growth stock in the sector.
Soleil upgraded shares of Alcoa (NYSE:AA) to Hold from Sell on valuation following the recent weakness.
Readers of this space know that the investment bias is toward large-cap companies with demonstrated business models and who have a competitive advantage in established markets, preferably with a favorable global trend as a support. But every once in while an exception is made, and with the above in mind, L-3 Communications (NYSE: LLL) is worth a review.
L-3 makes secure and specialized systems for satellite, avionics, and marine communications, with a healthy percentage of its business coming from the U.S. Government.
Analysts like LLL's diversified revenue streams: specialized products (34%) intelligence/communications (22%) government services (25%), and aircraft modernization and maintenance (19%).
"The weak start to 2008 has left many investors scrambling for a safe haven in which to stash their cash," notes Jocelynn Drake, who sees the defense sector as one such haven.
The analyst with Schaeffer's Investment Research explains, "The recent losses suffered by many of the defense-sector components has brought them back to long-term support, creating potentially strong buying opportunities."
"In addition, they are all currently resting right near support at their ascending 10-month moving averages. These stocks have benefited from this long-term support level and could use their respective trendlines as springboards to launch them on the next leg of their uptrends.
"What also makes these stocks very appealing from a bullish perspective is that short-term options players are very skeptical of the stocks' outlooks. As a result, options speculators have loaded up on bearish bets toward these securities in an attempt to call a top to their rallies.
Last week Forbes released its annual list of the fastest growing tech stocks, and it shouldn't be much of a surprise that Google Inc. (NASDAQ: GOOG) topped the list, with nearly $15 billion in sales, representing five-year sales growth of 155%, and 30% EPS growth. To make the list, companies had to have significant sales growth over the past year and five years, as well as a good earnings forecast for the next three to five years. Companies with significant legal problems or corporate governance issues were excluded.
So if, like Aaron Katsman, Georges Yared, and Jim Cramer, you are bullish on tech stocks, then there's plenty on the Forbes lists worth taking a look at.
The Boeing Co. (NYSE: BA) shares are down 2% in premarket trading after the it was downgraded to Equal-Weight from Overweight at Morgan Stanley. The broker says the stock is cheap, but claims certain near-term risks related to its new Boeing 787 Dreamliner override the attractive valuation. Time Magazine published 50 Top 10 Lists of 2007 and Apple Inc.'s (NASDAQ: AAPL) iPhone was, of course, the first in the Top 10 Gadgets.
General Electric Co. (NYSE: GE) could beat the conservative 10% 2008 profit growth forecast it issued Tuesday, analysts think. Despite the forecast being below the growth analysts had estimated, some -- including Goldman Sachs' analyst Deane M. Dray and JPMorganSecurities Inc. analyst C. Stephen Tusa Jr. -- said GE's forecast isn't too bad, in light of the possibility of slowing global growth and declining consumer spending.
For L-3 Communications, the defense never rests. L-3 Communications Holdings, Inc. (NYSE: LLL) makes secure and specialized systems for satellite, avionics, and marine communications, with a healthy percentage of its business coming from the U.S. Government.
Analysts like LLL's diversified revenue stream: specialized products (34%), intelligence/communications (22%), government services (25%), and aircraft modernization and maintenance (19%).
Analysts expect 8%-9% organic revenue growth in 2007 and 7%-8% in 2008, including solid growth in government service and specialized products. The Reuters F2007/F2008 EPS consensus estimates for LLL are $5.95 to $6.51.
The risks? Analysts are keeping their eye on LLL's profit margins, high financial leverage, and ability to increase its low dividend. A substantial decline in U.S. government/defense spending would also hurt L-3's results.
The First Call mean rating for LLL is: Hold [15 firms]. Mean 2008 target: $116.20 [high: $129, low: $108].
Stock Analysis: L-3 Communications is a moderate-risk stock not suitable for low-risk investors. Investors with an investment horizon longer than 2 years should be rewarded from LLL's shares. Sell/Stop Loss if you were to purchase shares in this company: $78.
"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.
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.
MOST NOTEWORTHY: AstraZeneca plc (AZN), Aeroflex Inc (ARXX), Symantec Corp (SYMC), Chevron Corp (CVX) and Exxon Mobil Corp (XOM) were just some of today's noteworthy downgrades:
HSBC downgraded shares of AstraZeneca plc (NYSE: AZN) to Neutral from Overweight as the firm believes investors will have to wait until 2009 for the company to start benefiting from its strategy.
Aeroflexx Inc (NASDAQ: ARXX) was cut to Hold from Buy at Jefferies with a $14 target based on valuation.
Thomas Weisel downgraded shares of Symantec Corp (NASDAQ: SYMC) to Market Weight from Overweight citing a lack of near-term catalysts and increased risk from transitions in its business model.
Chevron Corp (NYSE: CVX) was removed from AG Edwards' Focus Portfolio. The firm believes Chevron offers less upside potential than other companies in the sector.
Exxon Mobil (NYSE: XOM) was downgraded to Hold from Buy on valuation and its balanced risk/reward profile...
OTHER DOWNGRADES:
Piper Jaffray cut Juniper Networks, Inc (NASDAQ: JNPR) to Market Perform from Outperform with a $20 target.
Low-cost airline Jetblue Airways Corp. (NASDAQ: JBLU) to report Q1 earnings. Will Jetblue follow Southwest Airlines Co.'s (NYSE: LUV) disappointing report (which caused two analyst downgrades)? Or is the recent increased investment buy George Soros a sign that Jetblue is doing better?
The Boeing Co. (NYSE: BA) to report Q1 earnings; conference call at 10:30 a.m. Will Boeing discuss Airbus's decision to halve the price of its A350 planes in order to become more competitive with Boeing's 787 Dreamliner?
Market darling Apple Inc. (NASDAQ: AAPL) will also report Q2 earnings, conference call at 5 p.m.
MOST NOTEWORTHY: Merck & Co (MRK), Intersil Corp (ISIL), Nautilus Group (NLS) and Pacific Sunwear (PSUN) were some of today's more noteworthy upgrades:
Merck & Co (NYSE: MRK ) was upgraded to Neutral from Sell at Goldman Sachs to reflect the company's continued revenue strength and raised guidance. They believe strong execution continues.
JP Morgan upgraded Intersil Corp NASDAQ: ISIL) to Overweight from Neutral based on improving fundamentals.
Matrix USA upgraded shares of Nautilus Group (NYSE: NLS) to Hold from Strong Sell after this week's sell-off.
Pacific Sunwear of California (NASDAQ: PSUN) was added to Freidman Billing's Top Picks List, believing the turnaround is taking hold following strong March comps.
OTHER UPGRADES:
Goldman added L-3 Communications Hlds (NYSE: LLL) to its Conviction Buy List and raised its target to $105 from $95.
McCormick Corp (NYSE: MKC) was upgraded to Outperform from Market Perform at Wachovia citing core performance in both Industrial and Consumer, including a nominal boost in long-term growth outlook.
Bear Stearns upgraded shares of Ventana Medical Systems (NASDAQ: VMSI) to Outperform from Peer Perform, citing the company's solid base business outlook and Symphony potential.
Piper Jaffray upgraded Ocwen Financial (NYSE: OCN) to Outperform from Market Perform.
JP Morgan upgraded TJX Cos (NYSE: TJX) to Neutral from Underweight expecting merchandising initiatives and marketing spending to drive growth.
Boeing Co. (NYSE:BA): Rival Airbus booked its first firm order for the A350 XWB. Finnair converted an order for nine of the old A350s to the new version and added two more. The first planes are booked for delivery beginning in 2014.
Continental Airlines ordered five 787-9 Dreamliners from Boeing this week, bringing its total order from the 787 line to 25 planes. Delivery of their first 787-9s is scheduled for 2009.
Lockheed Martin (NYSE:LMT) and Northrop Grumman (NYSE:NOC): A $600 million combined project of Lockheed Martin and Northrop Grumman Corp. to build a dozen fast-response cutters was canceled last week. The project, on hold for the last year, was beset with cost overruns and had come under sharp criticism from Sen. John Kerry. The Coast Guard plans to re-bid the project.
MOST NOTEWORTHY: RealNetworks, Inc (RNWK), The Boeing Co (BA), L-3 Communications Holdings (LLL) and Research in Motion (RIMM) were some of today's most notable upgrades:
Jefferies upgraded RealNetworks, Inc (NASDAQ: RNWK) to Hold from Underperform with an $8 target on valuation.
JP Morgan raised The Boeing Co (NYSE: BA) and L-3 Communication Holding's (NYSE: LLL) rating to Neutral from Underweight citing valuation.
Yesterday's "China Effect" on the U.S. markets have created a buying opportunity in Research in Motion Ltd; ThinkEquity upgraded shares of Research in Motion Ltd (NASDAQ: RIMM) to Buy from Accumulate with a $165 target.
OTHER UPGRADES:
Ciena Corp (NASDAQ: CIEN) was upgraded to Overweight from Neutral at JP Morgan.
Wachovia upgraded Fresh Del Monte Produce inc (NYSE: FDP) to Market Perform from Underperform based on an improving banana outlook and cost environment.
Citigroup upgraded Nestle (OTC: NSRGY) to Buy from Hold to reflect the company's improved cash flows.
Bear Stearns upgraded BEA Systems Inc (NASDAQ: BEAS) to Peer Perform from Underperform.
Stephens upgraded Sanderson Farms Inc (NASDAQ: SAFM) to Overweight from Equal Weight with a $35 target.
L-3 Communications Holdings Inc (NYSE: LLL) was downgraded by Bank of America to Neutral from Buy based on valuation, as they see limited upside from current levels. The firm's target for L-3 is $92.
NewMont Mining Corp (NYSE: NEM) was downgraded by RBC Capital Markets to Underperform from Sector Perform based on Newmont's weak production profile and declining financial forecasts. The firm lowered its price target for Newmont to $48 from $52.
OTHER DOWNGRADES:
K Swiss Inc (NASDAQ: KSWS) was downgraded by Susquehanna to Neutral from Positive. The firm does not believe domestic sales will stabilize until 2008 and sees European growth being less robust over the next several quarters.
Alltel Corporation (NYSE: AT) was downgraded at Deutsche Bank to Hold from Buy on valuation. The firm's target for Alltel is $63.
MOST NOTEWORTHY: Yahoo! (YHOO) and Lockheed Martin (LMT) top today's extensive list of upgrades.
Yahoo!, Inc. (NASDAQ:YHOO) was upgraded at Merrill Lynch to Buy from Neutral on valuation as the company heads into the seasonally-strong period.
Goldman Sachs upgraded Lockheed Martin Corp. (NYSE:LMT) to Buy from Neutral citing valuation, margin expansion and consistent execution.
OTHER UPGRADES:
Pacific Sunwear of California, Inc. (NASDAQ:PSUN) business is bottoming, according to J.P. Morgan. They believe a new CEO could help a recovery, prompting the firm to upgrade the retailer to Neutral from Underweight.
Cephalon, Inc. (NASDAQ:CEPH) was upgraded to Outperform from Market Perform at Leerink Swann. The upgrade was based on increasing confidence in their pain franchise, positive feedback from MEDACorp consultants and increased confidence in earnings power.
Finally, L-3 Communications Holdings, Inc. (NYSE:LLL) was added to Goldman Sachs' Americas Buy List. Goldman cited the above average organic revenue growth, new management strategy and defense contract opportunities.
Today on the STOP TRADING segment on CNBC, Jim Cramer was trying to bogey the US mid-term election results in the House & Senate and make a market inference from his thoughts. He started out by discussing hedge funds and the perception on the street. He said they are only out for themselves, not the public perception.
Cramer said that since the market thinks the Dems will take the election, Big Pharma and defense plays went lower, although he still likes Homeland Defense plays like L-3 (NYSE: LLL) because he doubts anyone will touch Homeland Security funding.
He was also positive on Comcast (NASDAQ:CMCSA) after its great quarter. He said he is not taking profits here. Cramer thinks cable equipment-supplier Arris (NASDAQ: ARRS) will go even higher because it will be the secret winner of Comcast's capital expenditures going foward.
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MOST NOTEWORTHY: Tower sector stocks, Tesco Plc and Alcoa were today's noteworthy upgrades:
Last week Forbes released its annual list of the 
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