Teradata (NYSE: TDC - option chain) shares are rising today after the stock received positive coverage in Barron's (subscription required) over the weekend. An analyst wrote in the magazine that the stock could rise by as much as 80 percent over the next two years, helped by the company's high cash reserves, good client roster, and technical advantages. This could be a good sign for TDC. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on TDC.

TDC opened this morning at $29.58. So far today the stock has hit a low of $29.11 and a high of $29.75. As of 11:25, TDC is trading at $29.36 up $1.03 (3.6%). The chart for TDC looks neutral and S&P gives TDC a neutral 3 STARS (out of 5) hold ranking.

Analyst upgrades:

• Jefferies upgraded Aruba Networks (NASDAQ: ARUN) to Buy from Hold following the company's Q3 results to reflect improved visibility. The firm raised its target price to $6.50 from $3.
• Citigroup upgraded Mosaic (NYSE: MOS) and Potash (NYSE: POT) to Buy from Hold and Agrium (NYSE: AGU) to Hold from Sell as it believes stronger grain fundamentals more than offset China contract risk. The firm raised its target on Mosaic to $72 from $48, on Potash to $145 from $83 and on Agrium to $55 from $36.
• Fulton Financial (NASDAQ: FULT) Was upgraded to Market Perform from Underperform at Keefe Bruyette.
• Rio Tinto (NYSE: RTP) was raised to Neutral from Sell at Goldman.
• Noble Corp. (NYSE: NE) was upgraded at Deutsche Bank to Buy from Hold.

MOST NOTEWORTHY: Capstone Turbine, Insulet and Teradata were today's noteworthy initiations:

• Merriman believes Capstone Turbine (NASDAQ: CPST) is well-positioned for rapid growth as capacity constraints and dependence on subsidies drive the adoption of clean, dependable hydrocarbon-based technologies. Shares were assumed with a Buy rating.
  
• JMP Securities initiated Insulet (NASDAQ: PODD) with an Outperform rating and $29 target and expects increased adoption of the company's OmniPod disposable, tubeless insulin pump.
  
• Pacific Crest initiated Teradata (NYSE: TDC) with an Underperform rating. The firm is a seller of shares given the slowing economy and the company's exposure to larger IT deals.

OTHER INITIATIONS:

• Commercial Metals (NYSE: CMC) was initiated at UBS with an Outperform rating and $37 target.

I've recently taken a quick look at Teradata Corp. (NYSE: TDC). Teradata was a well-received spin-off of NCR Corp. (NYSE: NCR). Teradata is a commercial data warehousing, processing, and analyzing specialist for major business enterprises. The company focuses on the development of retail market intelligence based on consumer habits and trending, among other analytical data specialties.

It was recently announced by Teradata that a 550 store, an Italian supermarket chain, is expanding its Teradata system. Streetinvesting.com reported that the Italian firm wishes to more fully utilize its Teradata based information management systems across a broader range of its operations. Streetinvesting.com stated, "Teradata CRM provides a detailed understanding of customer purchase behaviors and preferences, and enables personalized offers to customers. Teradata's scalability supports growing businesses with increasingly complex business demands driven by robust growth requirements and the need for pervasive business intelligence."

In my opinion, Teradata has been performing adequately as a company, reporting $200 million net income for 2007 on sales of $1.7 billion. Currently, the company's share performance is lagging noticeably within its peer group, even though its income statement is showing four consecutive years of gross income increases. Operating expenses do appear to be weighing heavily on the company's performance, and taxes are certainly an issue.

At the time of this research, Teradata's shares are trading very near their 52-week low, prepared to open Monday at $21.77 against a 52-week high of $30.08. Analyst sentiment appears to be confident but reserved in regard to this stock. The consensus is calling it a buy.

Gary Sattler is a freelance blogger with no stock picking credentials. He does not knowingly hold interest in the companies mentioned in this post.

This week, NCR Corp (NYSE:NCR) announced that it will spin-off its Teradata division, which is a top player in data warehousing. NCR, on the other hand, will focus on its self-service business, such as ATMs, kiosks and so on.

The deal should take six to nine months to complete. However, according to a report from The Daily Deal [a paid service], Teradata may not even hit the public markets. That is, it could be bought-out.

By private equity firms? Well, given Teradata's cash flows – and long-term contracts – it would be attractive to a financial buyer. But, the company would also make a great fit for major tech companies, such as Oracle (Nasdaq: ORCL), IBM (NYSE: IBM) and even Hewlett-Packard (NYSE: HPQ). All of these companies have been quite acquisitive.

Valuation for Teradata is tough to determine – with a range of $2 billion to $4.5 billion. Although, given the future growth prospects for the company, it's a good bet that the valuation is at the top end.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.