- FBR Capital upgraded New York Community Bancorp (NYB) to outperform from market perform following the FDIC-assisted acquisition of AmTrust. The firm raised its target price on shares to $16 from $11.
- Oppenheimer upgraded Brocade (BRCD) to outperform from perform to reflect valuation, low investor expectations, and the company's potential to gain market share in IP/Ethernet switching. The firm set a target price of $8.50 on shares.
- Stifel Nicolaus upgraded National Health Investors (NHI) to buy from hold following the announcement that the litigation vs. Care Foundation has been dismissed. The firm has a $37 target on the stock.
- American Express (AXP) was upgraded to neutral from underperform at BofA/Merrill.
- ACE Ltd. (ACE) was upgraded to buy from neutral at Goldman.
- Kohl's (KSS) was raised to outperform from neutral at Baird.
- Deutsche Bank upgraded Freeport McMoRan (NYSE: FCX) to Buy from Hold to reflect the company's better than expected Q3 results and improved volume outlook. Deutsche raised its target on shares to $100 from $72.
- Thomas Weisel upgraded Motorola (NYSE: MOT) to Overweight from Market Weight and raised its target to $11 from $7 and said they expect Motorola to benefit from several upcoming catalysts that include new Android-based smartphone products and they believe the handset division could break even by year end of 2010.
- Janney Montgomery upgraded Regal Entertainment (NYSE: RGC) and Cinemark (NYSE: CNK) to Buy from Neutral on expectations both companies will benefit from a strong box office in Q4. The firm has a $14 price target on Regal shares and a $13.50 target on Cinemark shares.
- Marshall & llsley (NYSE: MI) was upgraded to Neutral from Underweight at JPMorgan.
- F5 Networks (NASDAQ: FFIV) was upgraded to Neutral from Sell at UBS.
- William Blair upgraded Lindsay Corporation (NYSE: LNN) to Outperform from Market Perform.
- RBC Capital upgraded Bank of America (NYSE: BAC) to Outperform from Sector Perform and said the company has attractive franchise value and earnings power, and is nearing the start of a credit driven earnings recovery. The firm raised its target to $22 from $19.
- Oppenheimer assumed coverage of Amazon.com (NASDAQ: AMZN) and upgraded shares to Outperform from Perform. The firm expects Amazon's revenue growth to re-accelerate over the next several quarters, making consensus estimates too conservative. Opco set a $130 price target on the stock.
- Barclays upgraded Ford (NYSE: F) to Equal Weight from Underweight and believes the company will report Q3 results above the Street. The firm raised its Q3 EPS estimate to 7 cents from 16 cents, vs. consensus of 21 cents, and its price target to $8 from $7.
- Charles River Labs (NYSE: CRL) was upgraded to Neutral from Sell at Goldman.
- Briggs & Stratton (NYSE: BGG) was upgraded to Outperform from Neutral at Baird.
- Sealed Air (NYSE: SEE) was upgraded to Equal Weight from Underweight at Barclays.
After searching all day yesterday under every rock I could find for an answer to the puzzle and coming up empty, I concluded that this mystery could only be the work of Sherlock Holmes's evil and brilliant nemesis Professor Moriarty. And fitting to the good professor's habit of only leaving the most meager of clues, the following is all I could find to date:
There was no news anywhere, how could that be?
It turns out that the company is now listed on the "pink sheets", "over the counter" as Anglo American PLC ADS (OTC: AAUKY). There was no news Friday, no news over the weekend, no news this morning, no information under the old symbol, the new symbol or the web site, and no broker knew why there was a change, just that it happened.
In the stock market no such rule applies. When the caution flag goes up it is a sign you may be nearing an opportunity to advance your position, and it would be foolish not to do so. I think the market has definitely had the caution flag up the last two weeks as we enter earnings season.
I have written several articles regarding watch-lists encouraging our readers to be prepared for buying opportunities, and as I look at my watch-list it appears that many stocks are nearing prices that would make it attractive to add to my position.
- Jefferies upgraded SAP (NYSE: SAP) to Buy from Hold on expectations license declines will trough in Q2 and margins will expand going forward due to cost control and price increases. The firm has a $46 price target on shares.
- BofA/Merrill upgraded STMicroelectronics (NYSE: STM) to Buy from Underperform on expectations the company will benefit from improving industry fundamentals in 2010.
- Citigroup upgraded Freeport McMoRan (NYSE: FCX) to Buy from Hold to reflect the firm's positive copper outlook, as well as valuation following the recent pullback in shares. The firm has a $58 price target on the stock.
- Phototronics (NASDAQ: PLAB) was upgraded to Buy from Neutral at UBS.
- Anglo American (NASDAQ: AAUK) was raised to Hold from Sell at RBS.
- Peabody Energy (NASDAQ: BTU) was upgraded to Buy from Neutral at Goldman.
The second quarter is now behind us and for the most part it was a positive one in terms of the market pushing higher almost 40%. This is the second review of my 2009 stock picks through June 30 (see: Chasing Value: 9 picks for 2009 -- APC, GE, ISRG, WFC and more). There was a lot of talk about green shoots this past quarter as Wall Street was looking for any small bit of optimistic data to support the market.
The federal printing presses continued to run at full speed pushing the dollar lower and oil prices higher. While the feds were printing money to cover their deficits, the States do not have that same luxury and many of them are having trouble balancing their budgets to the tune of billions of dollars.
This is a continuation of a theme I have been writing about this year involving stock options referred to as naked puts.
This allows investors to take a position in a stock, most often below its current price, but depending on market sentiment. That sentiment remains relatively negative so the spreads are attractive.
I have been following BHP Billiton Ltd ADR (NYSE: BHP) the largest mining company in the world, with headquarters in Australia, for a while but I do not own the stock today. I view all mining companies as an opportunity because I think the diversified raw materials they control are the best hedge against inflation. I do not think inflation is imminent, but with the extreme increases in money supply and debt being created I do not think it will be avoidable a few years out.
- Barclays upgraded Anglo American (NASDAQ: AAUK) to Overweight from Equal Weight based on a potentially higher bid from Xstrata (OTC: XSRAY) or a white night willing to pay a premium for the group, higher copper prices, and improving operating performance.
- Janney Montgomery upgraded Chiquita Brands (NYSE: CQB) to Buy from Neutral citing improved bagged salad margins, strong free cash flow, solid banana trends, and valuation. The firm has a $13 target on the stock.
- Wunderlich upgraded Legacy Reserves (NASDAQ: LGCY) to Buy from Hold due to the firm's belief that the back of the crude board is still very cheap, the firm's increased distribution outlook, and the movement of the stock after the discontinuation of the company's talks with Apollo.
- Deutsche Bank (NYSE: DB) was upgraded to Buy from Neutral at UBS.
- UBS (NYSE: UBS) was upgraded to Outperform from Neutral at Credit Suisse.
- Illinois Tool Works (NYSE: ITW) was upgraded to Outperform from Market Perform at Wachovia.
Together, Anglo American and Xstrata would have a market capitalization of approximately $68 billion, (AAUK's $35 billion + XTA.L's $33 billion) and be larger than Rio Tinto plc ADS (NYSE: RTP), which ended the trading day last Friday with a capitalization hovering over $42 billion.
The year started off with continued turbulence. We have a new president, Barack Obama, who will boldly lead us where no man has gone before -- trillions further in debt, most likely.
Not that this is his doing, but it is his chosen calling, and right now he is calling out to the Congress to move forward on various contentious budget proposals and continued federal stimulus packages.
It was only yesterday that AAUK was downgraded from neutral to underweight by JPMorgan Chase & Co. (NYSE: JPM). No doubt they were responding to the news that Standard & Poors cut Anglo's rating two notches to 'BBB' based on it's 40% leverage and the potential for its cash-flow and income to be impacted by continuing soft markets throughout the year in many commodities.
- UBS upgraded Dollar Tree (NASDAQ: DLTR) to Buy from Neutral but lowered its target to $42 from $45 following the solid Q4 report. The firm expects Dollar Tree's cost containment to continue. JP Morgan upgraded shares to Overweight from Neutral on valuation as it believes the recent pullback is overdone and the company set achievable FY09 guidance. The firm has a $43 target on the stock.
- JP Morgan also upgraded Smithfield Foods (NYSE: SFD) to Overweight from Neutral on valuation as they find the stock oversold at current levels.
- KeyBanc upgraded Nordson (NASDAQ: NDSN) to Hold from Underweight based on valuation, strong balance sheet and cost reductions, and a solid track record of execution.
- Philips Electronics (NYSE: PHG) was upgraded to Neutral from Underweight at HSBC.
- Aeropostale (NYSE: ARO) was raised to Equal Weight from Underweight at Barclays.
- Carter's (NYSE: CRI) was upgraded at Goldman to Neutral from Sell.