Analyst upgrades:

• Societe Generale upgraded shares of Veolia Environment (NYSE: VE) to Buy from Hold as they believe the company's new finance chief implement additional cost savings.
  
• Citigroup upgraded shares of Sun Healthcare (NASDAQ: SUNH) to Buy from Hold and added the stock to their Top Picks Live List as they believe the market is pricing in a more severe Medicaid and Medicare reimbursement outlook than is probable. The firm has a $14 target on the stock.
  
• Calyon believes in 2010, American Express (NYSE: AXP) will have easy comps, reserve releases, and income statement leverage. The firm upgraded shares to Outperform from Underperform.
• Societe Generale (OTC: SCGLY) was upgraded to Buy from Hold at Citigroup.
  
• Caterpillar (NYSE: CAT) was raised to neutral from Sell at UBS.
  
• Goldman upgraded Biogen Idec (NASDAQ: BIIB) to Buy from Neutral and added shares to the Conviction Buy List; Goldman also added Bristol-Myers (NYSE: BMY) to the Conviction Buy List.

This post is part of a special report, A Dozen Ways to Play an Obama Building Boom.

"Stocks in the water sector could soon flood their shareholders with a deluge of profits," says value investor Nathan Slaughter. In his Half -Priced Stocks, he explains, "Even in the 21st century, UNICEF reports that a staggering 1.1 billion in emerging markets still lack access to safe drinking water.

"And here in the U.S., the EPA has said we need to spend $275 billion to replace aging facilities -- including 800,000 miles of leaky, corroded pipeline that haven't been upgraded since the 1800's in some places.

"We see an incredible opportunities for the companies trying to combat the problem, particularly those involved with water distribution pipes, treatment facilities, purification technologies and other critical infrastructure.

"My top play in the sector is Veolia Environnement (NYSE: VE), a global juggernaut with $45 billion in annual revenues, operating on every continent.

"From humble origins supplying water to Parisians over 150 years ago, Veolia has grown to become the world's largest water utility. Today, it provides water and sewerage services to 130 million people in nearly 60 countries worldwide.

"During times such as these, I like to focus on big companies with clean balance sheets that pay decent dividends," says Glenn Rogers.

Here, the contributing editor to Internet Wealth Builder reviews his current stock holdings for a trio of global favorites offering upside potential while still allowing investors to "sleep well at night."

"Diageo Plc (NYSE: DEO) is well down from my original recommended price but compared to the overall market they have performed respectably.

"Meanwhile, the company recently issued a statement confirming its previous guidance of profit growth of between 7% and 9% in 2008.

"The company reported that organic net sales grew 6% in the three months to Sept. 30 and that there has been no material change in the financial position of the group during the period. Buy, with a target of $90.

"I have owned Knightsbridge Tankers (NASDAQ: VLCCF) longer than any other in my portfolio and it has never failed to pay a hefty dividend. The stock is currently trading at $17.40, thus yielding an incredible 17.2% based on a quarterly dividend of 75c a share.

Analyst upgrades:

• Jefferies upgraded shares of Constellation Energy (NYSE: CEG) to Buy from Hold and raised its target to $26.50 from $25 on valuation as they believe MidAmerican Energy will consummate the merger. The firm points out shares are trading at a 14% discount to the $26.50 offer.
  
• Merriman upgraded Denny's Corp. (NASDAQ: DENN) to Buy from Neutral as they believe the company's restructuring and successful menu and food cost management should stabilize operating margins.
  
• Daimler (NYSE: DAI) was upgraded at Merrill to Buy from Neutral on valuation as they believe the stock is oversold at current levels.
• Taiwan Semi (NYSE: TSM) was upgraded to Overweight from Neutral at HSBC.
  
• Veolia Environnement (NYSE: VE) was lifted to Neutral from Underperform at Credit Suisse.
  
• Goldman raised PMC Sierra (NASDAQ: PMCS) to Buy from Neutral.

Analyst downgrades:

"One essential commodity that is often overlooked by investors is water," says Gregory Dorsey, contributing editor to Stephen Leeb's Income Performance Letter.

He explains, "It's absolutely vital and is in growing demand for many reasons. And we've found an excellent way for income investors to ride this trend -- Paris-based Veolia Environnement (NYSE: VE). Here is his review.

"Veolia is not your typical utility, but it's still a utility that every income investor should consider. Veolia is the world leader in the management of water and wastewater services for local governments, industrial and service sector clients.

"It's also a world leader in the design, construction and operation of facilities for water and wastewater systems. With a focus on managing the complete water cycle from extraction to treatment to waste, Veolia stands ahead of its competitors.

"But although water is the chief attraction for us, Veolia generates steady revenue and income from other businesses as well.

"Its Veolia Environmental Services covers the entire solid waste cycle, including urban cleaning services, soil and site remediation, collection, sorting, transfer, treatment and recycling/recovery and is the world's largest waste management company.

Two leading global experts have both turned bullish on France's Veolia Environnement (NYSE: VE). Vivian Lewis, in her Global Investing, notes, "Veolia is the way to play the 'water works square' on the monopoly board."

Nicholas Vardy, editor of Global Stock Investor suggests, "The smart money is betting that water may be the 'oil of the 21st century.' And Veolia is my number one way to profit from this global megatrend."

Vivan Lewis says, "We recommend buying French water and sewage conglomerate Veolia at current prices; the stock has been brought down by niggling Euro-concern about its levels of debt. The company is also being penalized for acquisitions.

"Veolia is the former Générale des Eaux, a municipal service firm. This history creates an image problem for VE which is seen as a utility.

"Our main reason for the buy, apart from price, is that this is a fast growing company with good earnings in a hot sector. In 2007, VE had revneues of euros 32.6 bn, up 14% on which its recurring net profit fost 22.5% to euros 933.2 mn. Earnings per share were euros 2.16, up 13.7%.

"Another reason for liking VE is that it is moving into China big-time, with waterworks in Tianshin and Shibai and environmental service in Juijiang. All in all, France still represents 44% of sales and the rest of Europe 36%. VE does about 10% of its business in the U.S. and the Chinese are part of the remainder.

MOST NOTEWORTHY: Nokia, Thornburg Mortgage and AbitibiBowater were today's noteworthy upgrades:

• Oppenheimer upgraded shares of Nokia (NYSE: NOK) to Outperform from Perform on valuation following the recent weakness, as their checks indicate demand remains solid. WestLB raised Nokia to Buy from Add on valuation, as they believe concerns about Chinese demand are overdone.
  
• Bear believes Thornburg Mortgage (NYSE: TMA) is much more likely to survive given liquidity from the Fed's Term Securities Lending Facility. Bear upgraded Thornburg to Peer Perform from Underperform.
  
• BMO Capital upgraded AbitibiBowater (NYSE: ABH) to Market Perform from Underperform citing the company's $496M private debt exchange offer.

OTHER UPGRADES:

• JMP raised Cash America (NYSE: CSH) to Outperform from Market Perform.
  
• Veolia Environment (NYSE: VE) was upgraded to Buy from Neutral at Goldman.
  
• Deutsche Bank raised Groupe Danone (OTC: GDNNY) to Buy from Hold.

This is the eighth in a series of trend-spotting tips from Hilary Kramer's newly-released book, Ahead of the Curve.

More than ever, we should turn our trend-spotting eyes to beyond our borders. In our increasingly globalized economy, there is money to be made everywhere. Trends that used start in the United States can be seen starting in China, India, Japan, Germany, Argentina... to name but a few countries. Right now, the dollar is weak, so investing in foreign companies may make more sense than ever.

Looking outside your borders, you will see that China is growing in leaps and bounds, which means it needs more and more water systems, but it has a serious pollution problem.