Analyst upgrades:

• Merriman upgraded Sunpower (NASDAQ: SPWRA) two levels to Buy from Sell after transitioning coverage. The firm believes Sunpower is emerging from the current recession as the CleanTech leader and has a $38-$48 price range on shares.
• Citigroup upgraded Varian Medical (NYSE: VAR) to Buy from hold as it believes capex pressure and health care reform uncertainty is priced into shares, and demand will return as hospital budgets stabilize. Citi raised its target on shares to $45 from $36.
• FBR Capital upgraded Gap (NYSE: GPS) to Outperform from Market Perform following the Q2 results to reflect product improvement and ongoing inventory control. The firm raised its target on shares to $24 from $18.
• Schnitzer Steel (NASDAQ: SCHN) was upgraded to Neutral from Sell at UBS.
• UDR Inc. (NYSE: UDR) was upgraded to Market Perform from Underperform at Wells Fargo.
• The Buckle (NYSE: BKE) was upgraded to Buy from Hold at Roth Capital.

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.

"A top speculative idea for 2008 is Calgary-based Penn West Energy Trust (NYSE: PWE)," says Jack Adamo, editor of Insiders Plus. "We would consider this stock a 'smart money' buy.

"Commodities guru Jim Rogers said four years ago that energy prices would go a lot higher and stay there longer than anyone supposed. We believed him, and loaded up on energy, with spectacular results. We're up 45% this year alone.

"The thesis still stands. Within five years Mexico, our second largest oil supplier, will be a net importer of oil. Prices will remain high.

"Penn West Energy Trust is out of favor because Canadian tax laws change in 2009, and it faces corporate taxes. But with the units currently yielding 15%, even a few quarters of lower payouts in a recession, and a 30% tax bite in 2009, the units will still yield near 10%.

"With its long-lived reserves, the company has good growth prospects to boot. Great for current income or long-term total return. Buy up to $33.50."

Two of the savviest advisors around are Mark Skousen and Richard Lehmann. Both are noted experts in income investing and both have recently issued buy recommendations for the same stock.

Skousen, in his High-Income Alert, and Lehmann, in his Forbes/Lehmann Income Securities Investor, both look at Penn West Energy Energy Trust (NYSE: PWE).

Skousen explains, "The dollar continues to slide. Oil is approaching $100 a barrel, and gold, a sign of global instability, now is above $800. And the mortgage credit market continues to soften.

"All of these conditions make it difficult to profit, even in our high dividend-paying stocks. Fortunately, history is on our side. Studies show that a well-diversified portfolio of dividend-paying stocks tend to be more stable during difficult times.

"Our safest position is in oil stocks, so we are going to add another oil & gas stock to our portfolio: Penn West Energy. The trust bought out Canetic recently to create the largest oil and gas trust in North America.

"The combined trust is worth more than $15 billion and has the equivalent production of more than 200,000 barrels of oil a day. Penn West holds interests in western Canadian oil and natural gas pools, along with opportunities in oil sands, coal-bed methane, shale gas, and enhanced oil recovery.

"Penn West is paying an incredible dividend that now is about 35 cents a month, compared to 30 cents a year ago. The company's current dividend yield exceeds 13%."

MOST NOTEWORTHY: British Airways (BAIRY), Symantec (SYMC), OfficeMax (OMX), Qwest (Q) and Metlife (MET) were today's noteworthy upgrades:

• ABN Amro upgraded British Airways (OTC: BAIRY) to Hold from Sell on valuation.

• Friedman Billings believes Symantec's (NASDAQ: SYMC) fundamentals are about to show significant improvement over the next year and upgraded shares to Outperform from Market Perform.

• JP Morgan raised OfficeMax (NYSE: OMX) shares to Overweight from Neutral on valuation.

• Qwest (NYSE: Q) was upgraded to Sector Outperformer from Sector Performer, expecting revenue growth to be driven by the improving enterprise business. JP Morgan added Qwest to its Focus List.
  

• Metlife (NYSE: MET) was upgraded to Buy from Neutral at Merrill, based on valuation...
  

OTHER UPGRADES:

• ValueClick (NASDAQ: VCLK) was upgraded to Sector Perform from Underperform at Pacific Crest.

• Penn West (NYSE: PWE) was upgraded to Sector Perform from Underperform at RBC Capital.

• Friedman Billings upgraded Cubic (AMEX: CUB) to Market Perform from Underperform.

• Morgan Stanley upgraded shares of Jones Apparel (NYSE: JNY) to Equal Weight from Underweight.

• Broadcom (NASDAQ: BRCM) was raised to Sector Outperformer from Sector Performer at CIBC.

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

"Since tax changes on Canadian trusts were announced last October, their valuation premiums have vanished," notes Gavin Graham, contributing editor to Gordon Pape's The Income Investor.

And while the advisor notes that takeover speculation alone is not a reason to buy oil and gas trusts, he says, "It would not be unreasonable to wonder if a number of foreign oil companies aren't running their numbers on some of the large Canadian trusts."

One favorite, which he calls a "blue-ribbon energy trust" is Penn West Energy Trust (NYSE: PWE) -- one of the largest oil and gas trusts listed on the Toronto and New York stock exchanges. The firm is involved in gas, light crude, heavy crude, and oil sands operations in north-eastern British Columbia, Alberta, and south-western Saskatchewan.

He notes, "Penn West converted from a corporate structure 18 months ago and therefore has a long track record of proven delivery. It is run by Murray Edwards, one of the most successful Calgary-based oil entrepreneurs. Overall, we believe Penn West offers a good combination of current income and growth potential."

Each year Steven Halpern, editor of TheStockAdvisors.com, surveys the leading financial newsletter advisors asking for their favorite stocks for the coming year. This article is part of his 24th annual Top Picks Report.

Penn West Energy Trust (NYSE: PWE) is a top conservative idea for 2007 from income expert Richard Lehmann, editor of The Forbes/Lehmann Income Securities Investor. He explains, "I am a steadfast believer in the Canadian oil and gas trusts, despite the Canadian government's decision, on October 31, 2006, to begin taxing the trusts as regular corporations after 2010.

"Currently, the trusts pay out income to investors as dividends and are not taxed on the corporate level. In addition, these dividends are treated as qualified dividend income for U.S. investors and subject to the preferential 15% tax rate.

"Recent proposed changes in the Canadian tax law slammed all trusts and brought PWE down from $37 to a current price of $31. This brings the yield up to almost 12%. I like Penn West because it is one of the largest trusts, with over nine years of proven reserves and extensive holdings of unproven ones.

"They have four years to restructure their finances to offset the increase in taxes -- something that may not even come about if past lobbying efforts are any indication.

"Given that the current dividend represents only 63% of cash flow, the monthly dividend is safe from cuts down to a $50 a barrel price for oil. Investors are likely to sell shares of Penn West to lock-in tax losses in December, but I see price appreciation early in 2007 as investors buy in for the irresistible yield."