MOST NOTEWORTHY: Yahoo! was today's noteworthy downgrade:

• Yahoo! (NASDAQ: YHOO) was downgraded to Sell from Accumulate at ThinkPanmure as they value the company at $20 on a standalone basis. The price target lowered to $20 from $31.
• Yahoo was also downgraded to Sell from Buy at Citigroup based on Microsoft (NASDAQ: MSFT) withdrawing its bid for the company. Target was reduced to $26 from $34.
• Yahoo was also downgraded to Sell from Accumulate, target $20 at ThinkPanmure.
• Yahoo was downgraded to Sell from Hold at Soleil with a $22 target as they do not believe Yahoo can re-attain the $33 a share that Microsoft offered through execution alone.

OTHER DOWNGRADES:

• PeopleSupport (NASDAQ: PSPT) was downgraded to Market Perform at JMP Securities on valuation, and because they are increasingly concerned about the long-term safety of the company's J.P. Morgan Chase credit card contract. The firm downgraded the shares from Market Outperform.
• Skyworks (NASDAQ: SWKS) was downgraded to Accumulate from Buy at ThinkPanmure following checks that indicate some "inventory digestion" at a couple of its key OEM customers, which could put estimates at risk

Way back in early March I highlighted 10 horrifically downtrending stocks and said not to even think about buying them until they broke their nasty trendlines to the upside.

Over the past few weeks, many have displayed solid sideways price action, but it wasn't until yesterday that the high volume breakouts occurred. I'm talking about those 50+ million shares traded, 10%+ price surges beautifully accomplished by such popular names like Sprint Nextel Corp (NYSE: S), Broadcom Corp (NASDAQ: BRCM) and Level 3 Communications Inc (NASDAQ: LVLT).

Unsurprisingly, several other stocks also showed similarly strong price action:

RF Microdevices Inc (NASDAQ: RFMD)
Anadigics Inc (NASDAQ: ANAD)
Skyworks Solutions Inc (NASDAQ: SWKS)
Triquint Semiconductor Inc (NASDAQ: TQNT)
China Life Insurance Co. Ltd (NYSE: LFC)
Raymond James Financial Inc (NYSE: RJF)
Cerner Corp (NASDAQ: CERN)

Readers of this space know that the investment bias is toward large-cap companies with demonstrated business models and who have a competitive advantage in established markets, preferably with a favorable global trend as a support. But every once in while an exception is made for a non-conforming but innovative/promising company, and along this line Skyworks looks attractive. (Note: Skyworks is only for investors who can tolerate high-risk.)

Skyworks Solutions, Inc. (Nasdaq: SWKS) is a leading supplier to major mobile phone/PDA manufacturers.

Analysts really like Skyworks' radio frequency and manufacturing expertise, which enables the company to secure design wins with existing and new customers.

Skyworks, which began as a defense contractor, makes its integrated circuits out of gallium arsenide, a material that performs at higher speeds and with less energy consumption than the sector standard, silicon.

The earnings crunch is in full swing, and here are a few of the highlights of this past week's earnings coverage from BloggingStocks:

• Abbott Laboratories (NYSE: ABT) swung to a profit on the strength of drug sales.
• AK Steel Holding Corp. (NYSE: AKS) swung to a fourth-quarter profit and easily beat estimates.
• Aladdin Knowledge Systems Ltd. (NASDAQ: ALDN) posted solid results and raised its forecast.
• Amdocs Ltd. (NYSE: DOX) reported a record quarter and reaffirmed its guidance.
• Amgen Inc. (NASDAQ: AMGN) beat exectations, but concerns remain about FDA scrutiny.
• Apple Inc. (NASDAQ: AAPL) easily beat expectations and offered revised guidance (see live blog, transcript).
• Caterpillar Inc. (NYSE: CAT) posted a solid quarter on strong international growth.
• Coach Inc. (NYSE: COH) beat estimates on strong direct-to-customer and same-store sales.
• ConocoPhillips (NYSE: COP) posted a strong fourth quarter due to rising oil prices.
• CSX Corp. (NYSE: CSX) beat expectations as increased productivity offset increased fuel costs.
• Eaton Corp. (NYSE: ETN) posted solid fourth quarter results due to growth overseas.
• Equity LifeStyle Properties Inc. (NYSE: ELS) beat expectations in the fourth quarter and offered guidance.
• Franklin Resources Inc. (NYSE: BEN) reported solid results and increased its quarterly dividend.
• Johnson & Johnson (NYSE: JNJ) posted a solid fourth quarter and affirmed its 2008 guidance.
• Microsoft Corp. (NASDAQ: MSFT) posted strong results due in part to demand for Vista.
• Nintendo Co. (OTC: NTDOY) profit soared on demand for the Wii, and the company raised is sales outlook.
• Nokia Corp. (NYSE: NOK) reported a strong fourth quarter and increased market share in handset sales.

Skyworks Solutions (NASDAQ: SWKS) designs, manufactures and markets analog and mixed signal semiconductors that enable wireless connectivity. It offers power amplifiers, front-end modules and integrated radio frequency devices for cellular handsets and makes a variety of linear products that support automotive, broadband, cellular infrastructure, industrial and medical applications. Motorola (NYSE: MOT), Nokia (NYSE: NOK) and Sony (NYSE: SNE) are major customers.

The firm had good news for investors last week, when it reported Q1 EPS of 17 cents and revenues of $210.5 million. Analysts had been expecting 16 cents and $208.1 million. Management also guided Q2 EPS to 15 cents (13 cent consensus) and Q2 revenues to $200.0 million ($194.04M consensus). Regarding Q2, the CFO remarked that Skyworks expected to largely offset handset seasonality with growth from the linear products and the multimode handset content portfolios. The stock popped into a bullish "flag" consolidation pattern on the announcement. Prices frequently exit flags moving in the same direction they were traveling on entry. In this case, that would be to the upside.

Brokers recommend the issue with four "strong buys", seven "buys" and five "holds". Analysts expect a 23% growth rate, through the next year. The SWKS Price to Sales ratio (1.76), Price to Book ratio (1.64), Price to Cash Flow ratio (13.57) and EPS Growth rate (54.55%) compare favorably with industry, sector and S&P 500 averages. Institutions own about 95 % of the outstanding shares. The stock is one of those used to calculate the S&P 600 SmallCap Index. Over the past 52 weeks, it has traded between $5.56 and $9.55. A stop-loss of $7.40 looks good here.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com. He does not hold positions in any of the stocks mentioned above.

But wait ... there's more! In the giving spirit of the holidays, here's a bonus pick for bargain-hunters looking for stocks under the $10 threshold. Skyworks Solutions (NASDAQ: SWKS), manufactures semiconductors that are used primarily in wireless telephone handsets and infrastructure products. Nearly 40% of the company's sales are thanks to Motorola (NYSE: MOT) and Sony Ericsson Mobile.

The firm has been a solid performer in the earnings confessional of late, topping analysts' expectations consistently for the past five quarters, by an average surprise of nearly 15%. On November 1, the company reported fourth-quarter profit of $22 million, or 14 cents per share, a penny above Street expectations and a welcome change from a year-ago loss of $96.4 million (60 cents per share). Looking ahead to the current (first) quarter, SWKS officials targeted first-quarter profit -- excluding items -- of 15 to 17 cents per share.

MOST NOTEWORTHY: Atmel, Skyworks, Alcatel-Lucent, Parexel and Map Pharma were today's noteworthy initiations:

• Kaufman Bros. initiated Atmel (NASDAQ: ATML) with a Buy rating and $6 target, as they believe the company's increasing focus around its core microcontroller business can drive an improved growth and profitability profile going forward and would be buyers at current levels.
  
• The firm also started shares of Skyworks (NASDAQ: SWKS) with a Buy rating and a $10 target, as they like the company's balanced customer positioning and find the stock attractively valued at current levels.
  
• JP Morgan initiated Alcatel-Lucent (NYSE: ALU) with an Overweight rating and believes the risks are more than fully priced into shares at current levels.
  
• Parexel (NADSAQ: PRXL) was initiated with a Neutral rating at Broadpoint, as they believe the company's improved execution is already priced into shares.
  
• Deutsche Bank finds shares of Map Pharmaceuticals (NASDAQ: MAPP) attractively valued given the opportunity from the company's two late stage product candidates, UDB and Tempo Migraine. The firm started shares off with a Buy rating and $19 target.

OTHER INITIATIONS:

• Wachovia initiated coverage of leisure stocks, starting shares of Carnival (NYSE: CCL), Cedar Fair (NYSE: FUN) and Royal Caribbean (NYSE: RCL) with Outperform ratings.
  
• Credit Suisse initiated PepsiCo (NYSE: PEP) and Coca-Cola (NYSE: KO) with Outperform ratings and targets of $87 and $68, respectively.

Skyworks Solutions (NASDAQ: SWKS) is a mobile product provider based in Massachusetts. Despite the stock's recent run, it still has much more upside because the company's solid numbers into next year are going to make the stock drastically more attractive.

Before I get too specific about the company itself, I'd like to first discuss the company's sector and why its going to be such a hot space in the next few months. Basically, the company's products are going to be in tremendous use in the next few quarters as a result of the launch of Apple's (NASDAQ: AAPL) iPhone and continued advancements to Research in Motion's (NASDAQ: RIMM) BlackBerry. These smart phones are going to be huge contributors to Skyworks's top line because they need the company's products to perform the more advanced tasks being placed on smart phones, such as WiFi and GPS. The positive headlines which I expect to be flowing from this sector shortly (starting with Apple's upcoming quarter) should bolster Skyworks's stock appropriately.

But this stock isn't just a name that will move due to positive news from the smart phone space; this is a solid company that's hitting an inflection (turning) point. Despite showing weak performance sequentially and year over year in recent years, I think the company's revenue growth is going to return to positive territory within the next two quarters. I think the company is going to do about $190 million in sales next quarter -- a sequential increase of about 8%, but still a year-over-year decline of 4.5%. This figure is ahead of company guidance, which I think is low because the company was overly conservative when modeling Motorola's (NYSE: MOT) impact on sales. This Motorola factor is another potential catalyst because the company has the potential to easily beat estimates if Motorola steps up its business. Even if Motorola actually doesn't do much business with the company, I think Skyworks will be able to cover that lost business with new clients, just like it did last quarter.

The company positioned itself properly for this quarter. Because it expected increased demand for its FEM chips, it ramped up its inventory for this quarter to be able to match the demand. I think the company easily met Apple and Research in Motion's needs for the quarter.

MOST NOTEWORTHY:

Standard Pacific (NYSE: SPF) and Skyworks Solutions (NASDAQ: SWKS) top today's extensive list of upgrades.

• Standard Pacific Corp. was upgraded to Outperform from Neutral at Credit Suisse. The firm considers SPF a clever land purchaser and a quality builder.
• Skyworks Solutions Inc., the developer and manufacturer of semiconductors for wireless communications products, was upgraded by four firms this morning: To Neutral from Underperform at Credit Suisse, to Buy from Hold at Stifel Nicolaus, to Market Perform from Underperform at BMO Capital Markets and to Buy from Neutral at Pacific Growth Equities. Skyworks announced a corporate restructuring and reaffirmed Q3 guidance.

OTHER UPGRADES:

• American Tower Corp (NYSE: AMT) was added to J.P. Morgan's Focus List this morning. The upgraded was based on valuation, multiple expansion and catalysts including a stock buyback plan and the potential removal of the stock options accounting overhang.
• Lehman Bros. is positive on Apache Corp.'s (NYSE: APA) international opportunities and upgraded them to Overweight from Equal Weight.
• Scientific Games Corp (NASDAQ: SGMS) was added to Goldman Sachs America's Conviction Buy List. The firm is positive on the Global Draw deal that they believe will expand capabilities into video lottery.
• Merrill Lynch upgraded St. Jude Medical Inc. (NYSE: STJ) to Buy from Neutral on the belief they will continue to take market share away from Boston Scientific (BSX).

Analyst initiations provided by TheFlyOnTheWall.com.