MOST NOTEWORTHY: Acergy, Casey's General and Corinthian Colleges were today's noteworthy downgrades:

• Citigroup downgraded shares of Acergy (NASDAQ: ACGY) to Sell from Hold as they see risk to the company's backlog and believes the recent share rally is not supported by business operations.
  
• Casey's General (NASDAQ: CASY) was downgraded at Friedman Billings to Underperform from Market Perform citing headwinds that include weak gas comps.
  
• Banc of America downgraded shares of Corinthian Colleges (NASDAQ: COCO) to Neutral from Buy as they believe the post-legislation lending overhang will limit further share upside until COCO can show its students can access federal funds with minimal disruption.

OTHER DOWNGRADES:

• Bernstein cut EMC Corp (NYSE: EMC) to Market Perform from Outperform.
  
• Baird lowered Woodward Governor (NASDAQ: WGOV) to Neutral from Outperform.
  
• Merrill downgraded Sealed Air (NYSE: SEE) and Bemis (BMS) to Sell from Neutral.

Woodward Governor Company (NASDAQ:WGOV) designs, manufactures, and services energy control systems and components for aircraft engines, industrial engines, turbines, and mobile industrial equipment. The company's customers are primarily original equipment manufacturers in the power generation, oil and gas processing, and marine industries.

The firm pleased investors in November, when it reported fourth-quarter EPS of 55 cents and revenues of $232.9 million. The Street had been looking for 48 cents and $228.2 million. Management also guided FY07 EPS to $2.05-$2.15 ($2.03 consensus) and FY07 revenues to about $957.6-$983.3 million ($924.4M consensus).

The news popped WGOV shares into a positive eight-week trading channel, which has since been supported by word of a four-year supply agreement with General Electric Energy (NYSE:GE) and a burner system development agreement with Tenneco Inc. (NYSE:TEN). The price is currently consolidating at the base of the channel, where oversold CCI, MACD, and Stochastic technical parameters suggest the potential for a rise back toward the top. Correspondence of the stock's 30-day moving average to the base of the channel backs the rebound notion.

Brokers recommend the issue with two "strong buys," one "buy" and two "holds." The WGOV P/E ratio (19.47), Price to Sales ratio (1.55), Price to Book ratio (2.72), Price to Cash Flow ratio (13.13), and EPS Growth rate (71.88%) compare favorably with industry, sector, and S&P 500 averages.

The stock is one of those used to calculate the S&P 600 SmallCap Index. Institutional investors hold about 63% of the outstanding shares. Over the past twelve months, WGOV has traded between $27.45 and $40.94. A stop-loss of $34.20 looks good here. Note that the company is expected to report fiscal first-quarter results in mid-February.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.