Analyst Upgrades

• Google (GOOG) to outperform from neutral at Wedbush.
• Nike (NKE) to buy from neutral at UBS.
• Apollo Group (APOL) to market perform from underperform at FBR Capital.
• JDSU (JDSU) to overweight from neutral at Piper Jaffray.
• NetApp (NTAP) to overweight from equal weight and Verigy (VRGY) to equal weight from underweight at Barclays.
• RSC Holdings (RRR) to outperform from neutral at RW Baird.
• Exelon (EXC) to buy from hold at Jefferies.
• Aon (AON) and Willis Group (WSH) to outperform from market perform at Keefe Bruyette.
• BMC Software (BMC) to outperform from neutral at Cowen.

Take it Private! is a series looking at one company each week that, in my opinion, has no reason for being public. To find these companies, I screen for the following:

• high insider ownership
• a history of solid profitability
• a paltry Price/Earnings and/or Price/Cash Flow multiple
• a stagnant stock price accompanied by low volume indicating a lack of interest in the stock.

My purpose in highlighting these companies? This screen can be a good way to find deep value stocks, especially companies that may be attractive to a strategic buyer, private equity firm or management-led buyout at a premium to the current share price. However these profiles should not be interpreted as a recommendation to buy a certain stock. Let's take a look at Rex Stores (NASDAQ: RSC), a stock that I've followed with interest since 2004. Rex Stores owns and operates 111 electronics retail stores in 34 states, a business that has struggled in the face of lower-priced competitors from Best Buy (NASDAQ: BBY) to Wal-Mart (NYSE: WMT)

MicrocapTrader made a compelling and difficult to refute argument about the stock's value in this post from April of 2007: "In any event, assigning a proper valuation to RSC's property brings its tangible book value up to ~ $15 per share without even considering its inventory, worth another $6 per share at its carrying value."

And then there's the ethanol.

MOST NOTEWORTHY: AstraZeneca plc (AZN) and the interactive Eetertainment sector were today's noteworthy initiations:

• Coverage on AstraZeneca (NYSE: AZN) was resumed with a Buy rating at Deutsche Bank. The firm believes the company's change in EPS guidance to a cash basis is likely to lead to significant increases to EPS estimates.

• Lehman initiated Electronic Arts (NASDAQ: ERTS) with an Overweight rating, THQ Inc (NASDAQ: THQI), RSC Holdings (NYSE: RRR) and Activision (NASDAQ: ATVI) with Equal-Weight ratings and Take-Two Interactive Software (NASDAQ: TTWO) with an Underweight rating...

OTHER INITIATIONS:

• Sirtris Pharmaceuticals (NASDAQ: SIRT) was initiated by Rodman with an Outperform rating, at JP Morgan with an Overweight rating, at JMP Securities with a Market Outperform rating and at CIBC with a Sector Outperformer rating.

• RSC Holdings (NYSE: RRR) was initiated at Baird with an Outperform rating, at Morgan Stanley with an Overweight rating, at CIBC with a Sector Outperform rating and at Deutsche Bank with a Buy rating.

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