Analyst upgrades:

• Wells Fargo transferred coverage of Cooper Industries (NYSE: CBE) with an Outperform rating, upgraded from the previous analysts' Market Perform rating. The firm believes commercial construction will be of less of a headwind for the company than the Street thinks, and has a $38-$41 valuation range on the stock.
• Kaufman Bros. upgraded SuccessFactors (NASDAQ: SFSF) to Buy from Hold after channel checks indicated demand trends picked up in July. The firm raised its target on shares to $15 from $12.
• UBS upgraded eBay (NASDAQ: EBAY) to Buy from Neutral and believes Marketplace transaction growth is "turning the corner." Additionally, the firm believes the secondary market represents a long-term opportunity for the company. The firm raised its target to $28 from $24.
• Novartis (NYSE: NVS) was upgraded to Buy from Hold at Jefferies.
• Arcelor Mittal (NYSE: MT) was upgraded to Buy from Hold at Citigroup.
• Cardinal Health (NYSE: CAH) was upgraded to Buy from Neutral at Goldman.
• Yahoo! (NASDAQ: YHOO) was upgraded to Outperform from Market Perform AMC Monday at Bernstein.

Analyst upgrades:

• Oppenheimer upgraded OceanFreight (NASDAQ:OCNF) to Perform from Underperform on valuation and a lack of negative catalysts following the recent weakness.
  
• UBS raised Micron (NYSE:MU) to Buy from Neutral citing supply cuts which should improve prices. The target remains $5.
  
• Jesup & Lamont upgraded Atlas Air (NASDAQ:AAWW) to Buy from Hold is positive on the company's 20 year blocked space agreement with DHL and expects the stock to continue higher.
• AK Steel (NYSE:AKS) was added to Goldman's Conviction Buy List and upgraded to Buy from Neutral.
  
• Goldman also upgraded Northern Trust (NASDAQ:NTRS) to Buy from Neutral.
  
• Digital River (NASDAQ:DRIV) was upgraded to Hold from Sell at Stanford.

Analyst downgrades:

• Stephens downgraded shares of Titan Machinery (NASDAQ:TITN) after their survey of farmers indicated declining sales of agricultural equipment. The firm lowered their target to $19 but believes Titan Machinery's long-term growth story remains intact.
  
• Jefferies downgraded Helen of Troy (NASDAQ:HELE) and Blyth (NYSE:BTH) to Underperform from Hold as they believe the further deterioration in the U.S. consumer macro environment could pressure near-term results. The firm lowered its target on Helen of Troy to $13 from $16.50 and on Blyth to $5.50 from $8.
  
• UBS cut Indevus (NASDAQ:IDEV) to Neutral from Buy and lowered its target to $5.50 from $5 following the acquisition offer by Endo Pharmaceuticals (NASDAQ:ENDP).
• AECOM Tech (NYSE:ACM) was lowered to Equal Weight from Overweight at Morgan Stanley.
  
• Amerisafe (NYSE:AMSF) was downgraded at Oppenheimer to Perform from Outperform.
  
• Tractor Supply (NASDAQ:TSCO) was cut to Neutral from Buy at Piper Jaffray.

Analyst initiations:

• KeyBanc initiated Urban Outfitters (NASDAQ:URBN) with a Buy rating and $22 target. The firm believes the Urban Outfitters and Antropologie divisions are under penetrated and have visible growth.
  
• Kaufman Bros. started SuccessFactors (NASDAQ:SFSF) with a Hold rating and $7 target and believes the current demand backdrop could be worse than reflected in current consensus estimates.
  
• CarMax (NASDAQ:KMX) was initiated at Baird with a Neutral rating and $10 target. The firm is impressed with CarMax's business model but does not see a way around the near-term economic headwinds.
• Manulife Financial (NYSE:MFC) and Sunlife Financial (NYSE:SLF) were assumed with Equal Weight ratings at Morgan Stanley.
  
• Oppenheimer started Pacific Sunwear (NASDAQ:PSUN) with a Perform rating.
  
• Kite Realty Trust (NYSE:KRG) was initiated with a Buy rating at Janney Montgomery.

MOST NOTEWORTHY: SuccessFactors, Taleo and Penn National were today's noteworthy initiations:

• Oppenheimer initiated SuccessFactors Inc (NASDAQ: SFSF) with an Outperform rating and $15 target. The firm believes the company's double-digit revenue growth will continue as its differentiated HCM solutions gain broad-based adoption. Deutsche Bank believes the company has a strong opportunity to build a highly profitable business as it broadens its footprint, and started shares with a Buy rating and $15 target.
• Deutsche Bank also reinstated coverage of Taleo Corporation (NASDAQ: TLEO) with a Buy rating and $35 target. The firm believes the Vurv acquisition will create significant accretion in 2009 and that investors should take advantage of the recent share weakness.
• Oppenheimer assumed coverage of Penn National Gaming Inc (NASDAQ: PENN) with an Outperform rating and believes the termination of Penn's acquisition by Fortress Investment and Centerbridge will be catalysts for the stock, as they think it provides the company with financial flexibility. In addition, the firm believes Penn's management team has historically made prudent capital decisions.

OTHER INITIATIONS:

• Petrobras Brasileiro SA (NYSE: PBR) was initiated with a Buy rating and $92 target at Goldman.
• Cowen resumed coverage of LeMaitre Vascular Inc (NASDAQ: LMAT) with an Outperform rating.
• Sanofi-Aventis SA (NYSE: SNY) was started at ING with a Hold rating.

Minyanville's Sean Udall dares to share the kind of keen insight and actionable information you won't find in any prospectus. Here he discusses some players in the tech sector. For more original thought, visit www.minyanville.com.

SuccessFactors (NASDAQ: SFSF): The stock prices secondary at $11.80 and is holding pretty tough. I'm watching this one pretty closely and was hoping for some post-secondary weakness to possibly add a starter here. A pretty good balance sheet just got better, but I guess the question is, "What is it going to do with that cash?"

Digital TV Holding (NYSE: STV): This company may have made a bottom recently and the deal announced today is exactly what the company talked about in its last quarterly call. I've commented on the possibility of it securing more revenue streams (partnering for recurring advertising revenue) in the past. It looks to be developing the conduits to deliver on that.

comScore (NASDAQ: SCOR): Google (NASDAQ: GOOG) news is hurting the stock badly. I sold my mine some time back after that series of paid click reports ahead of Google's last quarter that proved to be quite inaccurate. All that aside, I don't think comScore's core business is going to disappear within a compressed time frame and may be worth a long side trade if it moves near or under $20. I'll leave it be and see what develops, as the knife could cut further.

Gordon Ritter, the founder and general partner of Emergence Capital Partners, is one of the top venture capitalists in the on-demand space. Besides being the original VC in Salesforce.com (NYSE: CRM), his firm has also funded companies like SuccessFactors (Nasdaq: SFSF), HireRight (Nasdaq: HIRE) and Lithium Technologies.

Well, last week I had a chance to meet with Gordon and we talked about what grabs his interest when an entrepreneur makes a pitch.

Of course, he wants a company that has a big market opportunity (say $1 billion) as well as a qualified team (or, at least, there is a team identified).

True, these are typical things. What else is important?

"What we find that's critical is that a company has shown an ability to build a relationship with customers," said Gordon. "It doesn't have to be a lot of customers. Instead, we want to see evidence that the company is engaging customers."

Unit economics is also key. "What are the customer acquisition costs?" said Gordon. "Is there a low-cost access to leads? We also want to see a short sales cycle."

Something else: Gordon wants a team with strong domain expertise. "On-demand is getting verticalized," he said. "In a way, it's about selling knowledge.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

MOST NOTEWORTHY: Smart Balance, Cascal NV and Ashland were today's noteworthy initiations:

• Citigroup initiated Smart Balance (NASDAQ: SMBL) with a Hold rating and $9 target, as they believe success of the company's new products is not a foregone conclusion and prefers to wait for increased visibility before becoming more positive on the name.
  
• JP Morgan believes Cascal NV (NYSE: HOO) will leverage its global scale and expertise in water infrastructure markets to drive 25% annual EPS growth through 2010. The firm has an Overweight rating on the stock.
  
• Ashland (NYSE: ASH) was started with a Positive rating as Susquehanna, as they are positive on ASH's earnings power. The firm views shares as a compelling risk/reward opportunity.

OTHER INITIATIONS:

• Broadpoint assumed SuccessFactors (NASDAQ: SFSF) with a Strong Buy rating and $12 target.
  
• Morgan Stanley initiated Fastenal (NASDAQ: FAST) with an Equal Weight rating and $40 target.
  
• RBC Capital started Ultra Petroleum (NYSE: UPL) with a Sector Perform rating and $80 target.

MOST NOTEWORTHY: Advanced Analogic, Navios Maritime and Lockheed Martin were today's noteworthy initiations:

• JMP Securities started shares of Advanced Analogic (NASDAQ: AATI) with a Market Outperform rating and $13 target, as they are positive on AATI's increasing margins driven by proprietary portable power management designs and cost-effective manufacturing technology.
  
• Cantor assumed coverage of Navios Maritime (NYSE: NMM) with a Buy rating and $21 target and believes the company's focus on long-term charter contracts and substantially fixed operating costs helps provide clear earnings visibility to support its dividend policy.
  
• American Technology views Lockheed Martin (NYSE: LMT) as a compelling long-term investment opportunity given the overall predictability of the sector and an attractive valuation. The firm initiated shares with a Buy rating and $129 target.

OTHER INITIATIONS:

• Morgan Stanley initiated SuccessFactors (NASDAQ: SFSF) with an Overweight rating.
  
• Cowen initiated Liz Claiborne (NYSE: LIZ) with a Neutral rating and Polo Ralph Lauren (NYSE: RL) with an Outperform rating.

Before tailgating begins today, I like to take the time to run through some equity research. While not as exciting as reading Tim Ferriss' 4-Hour Work Week and some of the radical lifestyle experimentation he writes about on his blog, I stumbled upon a company whose IPO I missed, SuccessFactors (NASDAQ: SFSF).

I've written before about new Software as a Service (SaaS) firms like Salesforce.com (NYSE: CRM) and Concur Technologies (NASDAQ: CNQR) that deliver their software via the internet. Companies employing the software typically rent it and pay as they use it. The software is hosted, which means the software provider manages updates and versions.

I thought it would be worthwhile summarizing some of the research put out this week on the firm by the likes of JPMorgan and Goldman Sachs.

MOST NOTEWORTHY UPGRADES:

• Tortoise Capital (NYSE: TTO) was upgraded to Buy from Neutral at Merrill Lynch.
• Brean Murray upgraded shares of California Water Service (NYSE: CWT) and SJW Corp. (NYSE: SJW) to Buy from Hold on valuation following the recent weakness.

MOST NOTEWORTHY DOWNGRADES:

• Broadpoint downgraded shares of Cache Inc. (NYSE: CACH) to Neutral from Buy and lowered their estimates after the company reduced its Q4 guidance. The broker also removed its $21 target.
• Piper downgraded shares of Salix Pharmaceuticals (NASDAQ: SLXP) to Sell from Neutral to reflect concerns over the company's IBD franchise and potential Xifaxan patent concerns.

MOST NOTEWORTHY INITIATIONS:

• Pacific Crest initiated shares of SuccessFactors (NASDAQ: SFSF) with an Outperform rating and $18 target, and believes the company has better visibility than its On-Demand peers with 2.5 year deals.