Analyst Upgrades

• Bunge (BG) to buy from hold at Deutsche Bank.
• Textron (TXT) to overweight from neutral at JPMorgan.
• CSX (CSX) to buy from neutral and Pulte Group (PHM) to conviction buy from neutral at Goldman.
• Aol (AOL) to buy from neutral at UBS.
• Kohlberg Capital (KCAP) to outperform from market perform at JMP Securities.
• Owens Corning (OC) to buy from neutral at BofA/Merrill.
• Jefferies (JEF) to buy from neutral at Ticonderoga.
• Harris (HRS) to outperform from perform at Oppenheimer.

Analyst Upgrades

• Tyson Foods (TSN) to buy from hold at Deutsche Bank.
• Carmike Cinemas (CKEC) to buy from neutral at Merriman.
• Ambow Education (AMBO) to conviction buy from neutral at Goldman.
• Johnson Controls (JCI) to overweight from equal weight at Barclays.
• Dynex Capital (DX) to outperform from market perform at JMP Securities.
• Ensco (ESV) to outperform from neutral at Credit Suisse.
• York Water (YORW) to buy from hold at Brean Murray.
• Mid-America Apartment (MAA) to market perform from underperform at FBR Capital.
• Cheniere Energy Partners (CQP) to hold from sell at Citigroup.
• Forest Oil (FST) to positive from neutral at Susquehanna.
• Tractor Supply (TSCO) to outperform from neutral at RW Baird.

Analyst Upgrades

• Wells Fargo (WFC) to conviction buy from neutral at Goldman.
• Adobe (ADBE) to buy from neutral at UBS.
• Fifth Third Bancorp (FITB) to outperform from market perform at FBR Capital.
• Vail Resorts (MTN) and Goldcorp (GG) to buy from hold at Deutsche Bank.
• OmniVision (OVTI) to overweight from neutral at JPMorgan.
• Penn Virginia (PVA) to hold from sell at Canaccord.
• Hub Group (HUBG) to outperform from market perform at Morgan Keegan.

Every quarter, investors eagerly await the disclosures for the holdings of top-notch hedge fund managers. Which stocks are being dumped? What are the new purchases?

Just look at billionaire hedge fund manager John Paulson. Over the past couple of years, he has been a big holder of gold stocks. And yes, in light of the terrible plunge in the precious metal in January, investors are wondering if Paulson is still a bull.

Analyst Upgrades

• Wynn Resorts (WYNN) to overweight from neutral at JPMorgan.
• Oracle (ORCL) and Alliance Data Systems (ADS) to outperform from neutral at Macquarie.
• Saint Joe (JOE) to outperform from market perform at Keefe Bruyette.
• Starwood Hotels (HOT) to neutral from underperform at RW Baird.
• Middlesex Water (MSEX) to buy from neutral at Janney Capital.
• Consol Energy (CNX) to buy from hold at BB&T.

In the middle of the summer with the stock market smoldering from the economic aftershocks of the BP (BP) oil spill, I decided to post a contrarian story emphasizing a very common refrain among value investors, "my pal Warren" being head of the class: buy on fear (sell on greed). This notion is continuing to work for what I called the toxic stock portfolio.

This is the third update to my ranting five months ago that six of the most reviled and most highly traded stocks featured by daily bad press as a group would outperform the overall market. It has, with the big winner rising from being one of the biggest losers.

Qualcomm (QCOM) is scheduled to report Q4 EPS on Nov. 3 and host an analyst meeting on Nov. 17. November option implied volatility is at 34, December and January is at 28, near its 26-week average of 29, according to Track Data, suggesting larger near-term price movement.

Transocean (RIG) is expected to report Q3 EPS on November 4. November option implied volatility is at 55, December is at 47, January is at 46, versus its 26-week average of 43, according to Track Data, suggesting larger near-term price movement.

Options Update is by Stock Specialist Paul Foster of theflyonthewall.com.

A very common refrain among value investors, "my pal Warren" being head of the class, is buy on fear (sell on greed), and it is working with the toxic stock portfolio.

This is the second update to my ranting twelve weeks ago that the six most highly traded stocks receiving the most bad press would be a great contrarian investment, and that this group would outperform the overall market without much difficulty.

It was true earlier, and it is still true today as the DJIA topped 11,000 again. The toxic stocks list includes Bank of America (BAC), Citigroup (C), General Electric (GE), BP (BP), Goldman Sachs (GS) and Transocean (RIG).

CBOE Volatility Index-VIX was down 78 cents to $21.21. The 10-day moving average is 23.79, 100-day 26.89. The S&P 500 was up 1.1% to 1116.10.

Transocean LTD (RIG) closed up 2 cents to $58.84. The April 20th Gulf of Mexico explosion was aboard a Transocean owned deepwater rig. Crude oil futures are recently up 0.86% to $77.11 according to Bloomberg. RIG October put option implied volatility is at 46, November is at 44. That is near its 26-week average of 44, according to Track Data, suggesting non-directional price movement.

Otions Update is by Stock Specialist Paul Foster of theflyonthewall.com.

Buy on fear sell on greed is being put to the test today, as I post the first update to my ranting three weeks ago that the six most highly traded stocks receiving the most bad press would be a great contrarian investment. I went on further to claim that the punishment was exaggerated and that this group would easily out perform the over all market.

Normally, I would not post so soon but the market has done an about face (again) and I wanted to take a glance. The stocks I suggested buying were Bank of America (BAC), Citigroup (C), General Electric (GE), BP (BP), Goldman Sachs (GS) and Transocean (RIG).

Until recently, my largest positions were in financial stocks Citigroup (C), Wells Fargo (WFC) and Bank of America (BAC). As a contrarian investor, I do buy on fear and sell on greed as "my pal Warren" has advised for many years. This has worked out to be very profitable over the past 18 months. However, in the past 30 days the financial stocks have dropped to second place in favor of oil and gas stocks.

I think the economic recovery is moving at a snail's pace, lowering anticipated demand for oil while gas was already depressed based on the same factors and the addition of numerous new large supplies. Add to this the mess in the Gulf of Mexico and the public's already negative sentiment about oil companies and you have the makings of depressed pricing in the sector.

The U.S. Coast Guard and the Bureau of Ocean Energy Management Regulation and Enforcement are investigating events that occurred before the BP blast.

Workers who survived the blast have filed suit against Transocean Ltd. (RIG), the company that owned the rig. Michael Williams, a rig worker on the Deepwater Horizon, filed suit against Transocean in federal court in New Orleans, April 29. Williams identified several safety violations aboard the Deepwater Horizon.

Yesterday I was shocked by the response to a poll I conducted in this very same column where I suggested that six out-of-favor stocks were a buy and would out perform the over all market. The results left me puzzled for several reasons.

For one thing I have been blogging for Aol. for over four years and I cannot remember an occasion that there was so much unanimity on anything before. I expected approximately equal votes for each of four possible responses to my question, and an appreciable number that might think I was off my rocker. Instead, I was jolted to a new reality when 84% of the respondents agreed that the six toxic stocks would outperform.

The six stocks are Bank of America (BAC), Citigroup (C), General Electric (GE), BP p.l.c. (BP), Goldman Sachs (GS) and Transocean (RIG). I thought I was taking a contrarian position and based on recent market activity that would seem to be the case. This raises another question. If my readers are any reflection of the market, how could the market move in the opposite direction of such overwhelming sentiment?

Unless you are the ultimate contrarian, Friday was not a good day for the stock market. While there are always plenty of great companies to invest in, I've chosen a group of stocks that everyone else actually hates.

The stock market was none too pleased with the earnings reports from Bank of America (BAC), Citigroup (C) and General Electric (GE). I was quite surprised that the trio, which are the most heavily traded stocks on the market, jolted investors as they did. I think all three are a buy.

Not to leave out any of the recently orphaned stocks, let's add three more bad boys to the picture: BP (BP), Goldman Sachs (GS) and Transocean (RIG). They have been hurt by the misdeeds of management, which resulted in crushing blows to shareholders. These three stocks are very scary: The prospects for a turnaround remain bleak in most everyone's eyes, with little chance of the negative headlines or business improvement changing the outlook anytime soon. Could the timing be right to buy these monsters too?

Shares of oil-spill accessory Transocean Ltd. (RIG) are currently trading near $47, but one investor is bracing for a drastic downside move from the security. On Wednesday, a long-term options trader picked up some plunge protection on RIG by purchasing a large number of deep out-of-the-money puts.

Specifically, several large blocks totaling roughly 5,000 contracts traded near the ask price yesterday on RIG's January 2011 25-strike put. Implied volatility on the option rose 2% by the close, indicating rising demand for this LEAPS strike. Open interest climbed overnight by 4,710 contracts, confirming that these were newly opened bearish bets.