Royal Philips Electronics, the largest consumer electronics maker in Europe, reported this morning a decline in its first-quarter profit. As another sign that the slumping U.S. economy is hurting companies overseas, Philips posted a bigger-than-expected 28% fall in its core profit after weak North America television sales offset gains in its health care and lighting businesses.

The company's first-quarter net income was 219 million euros ($347 million), lower than 875 million euros reported last year when Philips benefited from higher gains on the sale of stakes. For its overall sales, the world's largest maker of lighting posted a growth of only 1% to 5.96 billion euros ($9.44 billion), while comparable sales saw a decline of 9% in North America, hurt by weak results from the company's TV business.

The company's quarterly earnings figure included a gain of 83 million euros on the partial sale of its shareholding in LG Display Co. Ltd. (NYSE: LPL), Philips stated, while, the prior-year quarter results included a net gain of 733 million euros from the partial sale of the shareholding in Taiwan Semiconductor Manufacturing Co. (NYSE: TSM).

LG Display Co., Ltd. (NYSE: LPL) stock is falling this morning on news that Philips sold about $1 billion worth of its stake in LPL. The company sold the shares at a discount of 4.8 to 8.1 percent, according to news reports, and the deal will reduce Philips stake in the company to 13.5 percent from 19.9 percent. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on LPL.

After hitting a one-year low of $15.87 last March, the stock hit a one-year high of $31.29 in November. This morning, LPL opened at $23.22. So far today the stock has hit a low of $21.88 and a high of $23.44. As of 1:10, LPL is trading at $22.44, down $2.14 (-8.7%). The chart for LPL looks neutral and improving, while S&P gives the stock a neutral 3 Stars (out of 5) Hold rating.

For a bearish hedged play on this stock, I would consider an April bear-call credit spread above the $25 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 12.4% return in one and a half months as long as LPL is below $25 at April expiration. LG Display would have to rise by more than 11% before we would start to lose money.

Nokia Corp. (NYSE: NOK) shares are rising today upon publication of a BusinessWeek story in which analyst Richard Windsor of Nomura Securities speculates that NOK and LM Ericsson (NASDAQ: ERIC) could benefit from the patent infringement ruling on Qualcomm (NASDAQ: QCOM) earlier this week. QCOM had provided technology to NOK rivals LG (NYSE: LPL) and Samsung, which now must transition their mobile phones to non-infringing technology. The transition may allow NOK to grab market share from the two cell-phone makers, according to Windsor. If you think that the company won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on NOK.

After hitting a one-year low of $18.87 in January, the stock hit a one-year high of $42.22 in November. NOK opened this morning at $38.09. So far today the stock has hit a low of $37.68 and a high of $38.24. As of 12:55, NOK is trading at $38.20, up $0.80 (2.1%). The chart for NOK looks bullish but deteriorating, while S&P gives the stock a negative 2 STARS (out of 5) sell rating.

For 25 years, Steven Halpern, editor of TheStockAdvisors.com, has surveyed the leading financial newsletter advisors asking for their favorite stocks for the coming year. This article is one of 100+ ideas in the Best Stocks for 2008 report.

"If you are looking for an excellent technology company with plenty of upside potential, I recommend L.G. Philips LCD Co, LTD (NYSE: LPL)," my favorite aggressive speculation for 2008," says Dennis Slothower, editor of Stealth Stocks.

"The company, located in South Korea, is the world's largest merchant supplier of large-size TFT-LCD panels, primarily used in high-definition televisions, notebook computers, desktop monitors, cell phones and other applications.

"Its display panels are included in products sold by LG Electronics, Philips Electronics, Dell, Hewlett-Packard, Toshiba, and Apple, among others.

"LPL is at the cutting edge of technology and is benefiting from the insatiable demand for consumer electronics. It is also currently trading at low valuations based on sales and book value. At $28 a share LPL is trading only 1.4X sales and 2.4X book value.

"The company has $1.8 billion in cash on its balance sheets and sales are growing at 43% growth rate. Over the trailing 12 months, sales reached more than $14 billion. The intrinsic value on this stock is in the $50 to $60 range, which I see hitting in the next two or three years."

When a new technology is offered to investors, the cautious in the crowd tend to stand back and await developments. When established firms begin to use that technology, it's time to pay close attention. There is an outfit in Ewing, New Jersey, that has been a pioneer in the commercialization of a special kind of light emitting diode. Now, some of the big consumer electronics players are beginning to show a serious interest.

Universal Display Corporation (NASDAQ: PANL) develops and commercializes organic light emitting diode (OLED) technologies and materials for use in flat panel displays, solid-state lighting products, cellphones and other opto-electronic devices. OLED screens use organic semiconductor materials to sharpen image and color quality. The company licenses its technology to makers of televisions, computer screens, and consumer electronics devices. It has strategic relationships with such technology leaders as Sony Corporation (NYSE: SNE). Eastman Kodak (NYSE: EK) is a major competitor.

The stock has been a steady gainer over the past month, in response to such issues as word from Sony and Toshiba that they will begin commercial production of OLED televisions. Analysts remarked favorably on Universal Display's prospects in the matter. The company has been working with Sony to develop OLED sets since 2001, and customer LG. Philips LCD (NYSE: LPL) sells panels to Toshiba. Shares are advancing through a positive trading channel. The price is currently consolidating at the base of that channel, suggesting the potential for a turn back toward the top.

Brokers recommend the issue with three "strong buys," two "buys" and two "holds." Analysts see a 44 percent growth rate through the next year. The PANL Price to Tangible Book ratio (7.61) compares favorably with industry, sector and S&P 500 averages. Institutions hold about 48 percent of the outstanding shares. Over the past 52 weeks, the stock has traded between $11.00 and $19.66. A stop-loss of $15.75 looks good here. Note that the company is next expected to report quarterly results in early November.

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

MOST NOTEWORTHY: PepsiCo (PEP), Countrywide Financial (CFC), KKR Financial (KFN), Home Depot (HD) and Visteon (VC) were today's notable downgrades:

• PepsiCo (NYSE: PEP) was cut to Neutral from Buy at Goldman based on valuation.

• Merrill downgraded Countrywide Financial (NYSE: CFC) to Sell from Buy, citing liquidity concerns in the mortgage sector as accelerated margin calls and forced asset sales could lead to further problems and selling pressure.

• KKR Financial Holdings (NYSE: KFN) was downgraded to Market Perform from Outperform at Friedman Billings based on the liquidity crisis and impact on equity. Lehman cut shares to Equal Weight from Overweight based on capital market funding concerns.

• Home Depot (NYSE: HD) was downgraded to Hold from Buy at Gabelli due to near-term uncertainty.
  

• Goldman downgraded Visteon (NYSE: VC) to Sell from Neutral...

OTHER DOWNGRADES:

• Credit Suisse downgraded UBS (NYSE: UBS) to Neutral from Outperform.

• Merrill cut Deutsche Bank (NYSE: DB) to Neutral from Buy.

• Bear Stearns downgraded LG Philips LCD (NYSE: LPL) to Peer Perform from Outperform.

• Keefe Bruyette downgraded Security Bank (NASDAQ: SBKC) to Underperform from Market Perform.

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

Motorola Inc. (NYSE: MOT)'s desperate attempt to dig itself out of profitless quarters and a huge backlash from the financial community against CEO Ed Zander is coming to a head this month. Later this month, Sprint (NYSE: S) is set to release Motorola's RAZR 2 handset, which has officially been termed as the successor to the original RAZR mobile handset that took the world by storm at the end of 2004 and ended up selling more than 50 million units through its lifespan (which continues today).

Aside from its success with that single product launch in 2004, Motorola has encountered many failures, with product delays, uninspired and RAZR-esque handsets that have no new designs, component shortages, inventory projection misses and just plain boredom. Customers all over the world have sought out trendier designs from competitors Nokia (NYSE: NOK), Samsung and LG (NYSE: LPL) (among many others) and Motorola just kept churning out the same thing in different forms (like flip phones, slider phones and "candybar" phones) for years. Due to not making any money and with sales slowing way down, Zander was on Carl Icahn's noose just a few months back.

Can the RAZR 2 save Motorola? I've pondered this a few times before, and the proof will start to form in the pudding here in a week or so. Once Sprint releases the RAZR 2 for $250 and Verizon Wireless (NYSE: VZ) follows it with an approximate $300 price tag, AT&T Inc. (NYSE: T) will follow -- hopefully in September -- with its own version. Once the RAZR 2 is at the three largest wireless carriers in the U.S., we'll know by the end of this year if it will sell like gangbusters and help rescue Motorola or if mediocre RAZR 2 sales will be the ultimate nail in Ed Zander's coffin at Motorola. Place your bets now.

Even as the housing boom fades, there's an argument to be made that people will get more interested in fixing up the house they have now that they are less obsessed with flipping condos in Florida.

Of course, that may not apply to the homeowners who are having trouble making payments on their hiked-up adjustable rate mortgages. But since the rich only get richer these days, it stands to reason that there would be more people willing and able to spend thousands on the sort of home appliance you could just as easily pay a few hundred for at Sears.

That makes investing in the companies that make high-tech home gadgets (see AOL slide show of some of the latest gear) an interesting proposition. If the housing market really tanks (it hasn't yet, I'd argue), these stocks would be somewhat insulated since none of them are direct plays on real estate. But if the housing market shakes its current limp and picks up steam, companies that make expensive gear for the digital home could do quite well. Meantime, some of these stocks are much cheaper than they were a short while ago.

MOST NOTEWORTHY: Intel Corp (INTC), Hansen Natural Corp (HANS), Netflix, Inc (NFLX), Marvel Entertainment, Inc (MVL) and Walt Disney Co (DIS) were today's more noteworthy upgrades:

• Goldman upgraded shares of Intel Corp (NASDAQ: INTC) to Buy from Neutral as they believe Advanced Micro Devices' (AMD) likely move to an outsourced business model will make it easier for the company to retain a product advantage.

• Goldman also upgraded shares of Hansen Natural Corp (NASDAQ: HANS) to Buy from Neutral based on expectations for sales and earnings acceleration in 2H07, driven by recent distribution agreements, a potential European distribution deal and the possibility of a share buyback.

• Soleil upgraded shares of Netflix Inc (NASDAQ: NFLX) to Buy from Hold on valuation as they believe the company will overcome the challenge from Blockbuster (BBI) and outperform the current sentiment.

• Matrix believes strong demand for licensed character products is boosting Marvel Entertainment's (NYSE: MVL) sales and raised its rating on the company to Hold from Strong Sell.

• SMH Capital upgraded The Walt Disney Co (NYSE: DIS) to Buy from Neutral as they believe the Street may be underestimating the free cash flow and earnings power within the Media Networks unit...

OTHER UPGRADES:

• Trump Entertainment Resorts, Inc (NASDAQ: TRMP) was upgraded to Buy from Hold at Morgan Joseph.

• LG Phillips LCD Co, Ltd (NYSE: LPL) was raised to Buy from Hold at Citigroup.

• Cowen raised Inverness Medical Innovations, Inc (AMEX: IMA) to Neutral from Underperform.

• Jefferies upgraded shares of The Pantry, Inc (NASDAQ: PTRY) to Buy from Hold.

• Gold Fields Ltd (NYSE: GFI) was raised to Outperform from Market Perform at BMO Capital.

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

MOST NOTEWORTHY: Gap Inc (GPS), World Wrestling Entertainment, Inc (WWE), AstraZeneca plc (AZN), and Nike, Inc (NKE) top today's list of noteworthy upgrades:

• Wachovia upgraded shares of Gap Inc (NYSE: GPS) to Outperform from Market Perform citing increased visibility on the turnaround and execution given modest merchandising improvements at Old Navy and GapKids, potential cost-cutting by late Spring and Summer and potential improved products at Gap adult by the holiday season into Spring 2008.

• Susquehanna upgraded shares of World Wrestling Entertainment inc (NYSE: WWE) to Positive from Neutral.

• Bernstein upgraded AstraZeneca plc (NYSE: AZN) to Market Perform from Underperform citing valuation and more realistic expectations.

• Off The Record Research changed their view to Positive on Nike Inc (NYSE: NKE) shares given the company's lack of discounting, share gains at Foot Locker (FL) and momentum in Europe.

OTHER UPGRADES:

• Lehman Brothers upgraded LG Phillips LCD Co, Ltd (NYSE: LPL) to Overweight from Equal Weight citing a fundamentals turnaround in display and structural changes occurring now rather than in the second-half of 2007.

• Friedman Billings believes TD AmeriTrade Holding Corp (NASDAQ: AMTD) has compelling risk/reward and upgraded shares to Outperform from Market Perform given significant free cash flow and an attractive valuation that increases the likelihood that the company could become a takeover target.

• Goldman Sachs upgraded The Mosaic Co (NYSE: MOS) to Buy from Neutral on valuation.

• Matrix USA upgraded Avocent Corp (NASDAQ: AVCT) to Buy from Hold on valuation.

• AG Edwards upgraded American Home Mortgage nvestment Corp (NYSE: AHM) to Buy from Hold and believes the market has over-reacted, pulling shares down with it.

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

MOST NOTEWORTHY: US Steel Corp (X), Nvidia Corp (NVDA), Hansen Natural Corp (HANS), Take-Two Interactive Software, Inc (TTWO) were some of today's noteworthy upgrades:

• UBS upgraded US Steel Corp (NYSE: X) to Neutral from Reduce to reflect the Q2 price hike and strong international demand.

• Stifel upgraded Nvidia Corp (NASDAQ: NVDA) to Hold from Sell on valuation.

• JP Morgan upgraded Hansen Natural Corp (NASDAQ: HANS) to Overweight from Neutral citing valuation and recent positive developments.

• Soleil believes Take-Two Interactive Software Inc (NASDAQ: TTWO) could enjoy support from the success of the investor group in voting in 5 new board directors and replacing the current CEO.

OTHER UPGRADES:

• Lehman upgraded LG Philips LCD Co, Ltd (NYSE: LPL) to Equal-Weight from Underweight to reflect an earlier-than-expected turnaround for the LCD industry.

• RBC hiked Sonic Corp (NASDAQ: SONC) up to Peer Perform from Underperform with a $23 target.

• Credit Suisse believes Caterpillar Inc (NYSE: CAT) has the most attractive risk/reward in the construction and farm machinery sector and added the stock to its Focus List today.

• Stifel upgraded Broadcom Corp (NASDAQ: BRCM) To Buy from Hold with a $40 target.

• Matrix USA upgraded NetGear, Inc (NASDAQ: NTGR) to Buy from Hold on valuation.

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