MOST NOTEWORTHY: BAE Systems, VASCO Data Security, Salesforce.com, Tempur Pedic and Fidelity National were today's noteworthy upgrades:

• Goldman added BAE Systems (OTC: BAESY) to its Conviction Buy List, as they believe the company's defensive growth characteristics will lead to outperformance.
• Jefferies upgraded shares of VASCO Data Security International Inc (NASDAQ: VDSI) to Buy from Hold on valuation following the recent sell-off in the stock.
• Salesforce.com Inc (NYSE: CRM) was upgraded to Outperform from Market Perform at Piper to reflect the company's strong cash flow generation and the firm's belief that CRM is a core holding in the enterprise application market.
• Citigroup upgraded shares of Tempur Pedic International Inc (NYSE: TPX) to Buy from Hold, as they believe double-digit sales growth and margin expansion will drive 25% EPS growth over the next few years.
• SunTrust raised its rating on Fidelity National Information Services Inc (NYSE: FIS) to Buy from Neutral on valuation.

OTHER UPGRADES:

• JP Morgan raised its rating on Mattel Inc (NYSE: MAT) to Overweight from Neutral.
• Broadpoint upgraded Pacific Ethanol Inc (NASDAQ: PEIX) to Underperform from Sell.
• Merrill upgraded Wyeth (NYSE: WYE) to Buy from Neutral.
• CIBC upgraded Acuity Brands Inc (NYSE: AYI) to Sector Outperformer from Sector Performer.

Most mergers are driven by the notion, sometimes wildly mistaken, that the combination will bring both a competitive advantage. Some pairs of companies, however, seem so intuitively right for one another, no bottom-line considerations should be allowed to interfere with their matrimony. Like a toddler and a sleeping cat, the interactions of these two seem inevitable.

Poor Mattel, Inc., (NYSE: MAT). The company with fun as its main product has been repeatedly hammered with product recalls for lead-contaminated toys, just as the Christmas season toy stock build-up is in full swing. Santa won't be lining up this year for Mattel's lead-painted Barbies, Pixar Cars, Fisher-Price toys or "It's A Really Big World" sets. The company's supply chain needs a couple of extra links: China to Mattel to Retailer to Mattel to The Dump. Some see this as tragic, but I see an opportunity for integration.

Waste Management Inc. (NYSE: WMI) has a solid grasp on a seemingly limitless American resource: trash. From the curbside to the rapidly growing U.S. mountain ranges of disposed goods, the company thrives on our discards.

A few weeks ago, I ranted and raved about the danger in which I put myself and my children when I struggle to open their toys' packages. I received a lot of comments from like-minded individuals. My favorite: "I am a service tech (HVAC)and a father of three, and the first thing I do when it is time to open the holiday gifts is make my way out to my service van and grab my tool bag ... The best tool for you to have is a set of wire cutters, linemans pliers, needle nose pliers, dikes or some form of plier with a wire cutter on it." Great! So all we need is a fully-equipped industrial-strength tool box.

My children, as they're quite cute and I can't resist them, received several new toys this year, nearly all from Mattel, Inc. (NYSE:MAT)'s Fisher Price unit. I thought I was exaggerating, just a little bit, when I mentioned hunting knives and threat of bodily harm when I wrote my original piece. But no.

One package, that holding the Diego Talking Rescue 4x4 (for which I paid $15.99 at Fred Meyer), took three adults about 15 minutes to open. One metal-reinforced twisty in particular was so well-wrapped that both my dad and I worked on it. Dad got out his new utility hunting knife, bought at Baker's General Store by my mom for a stocking stuffer. The twisty tie broke his knife. To quote Dave Barry, I am not making this up.

Another toy, the Little People Lil' Movers Dump Trucks (suggested ages: one year old), took me over 20 minutes to untwist from its packaging. It only has three pieces, but yet it must have had six or eight twisties, all tied and bent and threaded so securely that I almost gave up and returned the darned thing.

Mattel! What are you thinking? What good could possibly come of this ultra-secure packaging?

It was what thousands of parents of whiny kids were waiting for. Out of the blue, the Tickle-Me-Elmo floodgates are open and (among others) Wal-Mart Stores, Inc. (NYSE:WMT) makes oodles of TMX Elmo dolls available on the company's web site. From an, umm, "hidden cache." According to Heather, a TMX Elmo searcher in my office, she finally discovered an Elmo available "suddenly" from Fisher Price. Another warehouse abruptly appear out of the fog in El Segundo? (Do they have fog in El Segundo?)


All at once, eBay, Inc. (NASDAQ:EBAY) listings are everywhere, 22,446 results for my search for "TMX Elmo" and not just lots of results but falling prices. When I first checked around 10:45 a.m. there were dozens of listings closing around $5 or $10 over the suggested retail price of $39.99. 20 minutes later, when I was finishing up this piece? It was more like $5 or $10 under the suggested retail price. The Spanish version was going for a ridiculously cheap $26.55. Market floodage has commenced.

When Black Friday was approaching and customers were gearing up for their long wait in line to be one of the few, the proud, the early purchasers of TMX Elmo dolls, a few less festive souls whispered of "artificial shortages" and wondered if Mattel was purposely creating a frenzy over the toys. Most parents and eBay sellers accused them of a distinct lack of holiday spirit, and oh yeah, not enough capitalism.

Barbie is inviolate. Girls since the beginning of time (let's be clear: time didn't start, toywise, until the Barbie) have begged for Barbies, and no more time more loudly and earnestly than at Christmas. Even my four-year-old, mud-puddle-jumping, super-hero-adoring son wants a Barbie.

That was. Until Bratz came along. For the past few years Mattel, Inc. (NYSE:MAT) has been fighting tooth and nail to keep up with the overly-madeup, hiphop bad girls with the big heads. Where Barbie is too curvaceous, Bratz are too too -- too street, too saucy. If Barbie represents the unrealistic dimensions of a Vogue model, Bratz represent the unwanted idealization of a girl who hangs out at a strip mall when she should be in government class, spends her allowance on collagen lip injections, and dates a rapper twice her age.

Barbie sales have been falling in the past several years thanks to the formidably mispelled bad girls of the fashion doll world. They attempted to combat closely-held MGA Entertainment, Inc., who manufactures the Bratz dolls, in the marketplace by positioning its My Scene dolls to compete directly (although MGA sued Mattel last year, claiming that Mattel had changed the My Scene dolls to imitate Bratz too closely). When that didn't work so well, they brought out the big guns: an IP lawsuit.