Sometimes, a big market washout like we had on Friday, when the S&P 500 fell 10 points and the Dow was down 170 points at its worst level, can reveal an awful lot about individual stocks. It's days like these when the winners stick out like sore thumbs and reveal just how much demand there is for their shares. On Friday, there was a collection of such stocks.

All the following names have had astounding gains in the past year, and it sure looks like they are prepared to continue on that same trajectory. These stocks stuck out like a sore thumb on Friday because of significant buying interest in a terrible broad market tape. None of the moves in these names was driven by news

A 21-month run of rock-bottom interest rates have created a perfect environment for corporate bonds --- and as bond yields fall, bond prices rise and investors and companies have made out like bandits. This has put so much cash in corporate coffers that cash (as a percentage of S&P 500 market capitalization and excluding financials) has soared from just 3% of market value back in 1999 to more than 12.5% today! This cash is burning a hole in the pockets of many companies, and they are starting to use it to make bids for other companies so they can grab market share and expand on the cheap.

That's great news for small cap stocks with strong fundamentals, since these are always prime buyout targets. And here are three:

The East Coast is broiling, hitting temperatures of 100 degrees or more. In contrast, the Dow Jones Industrial Average (DJIA) is losing 100 points or more in a day. When it does rally, it can't seem to hold on to gains. So while Easterners burn, investors are the ones feeling the heat.

The explanation is simple: nothing's going on. Sure, there are some economic releases, but they're not very meaningful. Unemployment moves a little bit, up or down. It's only if it were to decrease significantly that it could make a real difference. Housing sales have plummeted. Turns out the housing credit of $8,000 that ended in April was important. New housing starts are down even further this month as builders aren't breaking ground for a while. All the stimulus from the government is sitting in corporate treasury bank accounts or simply in the banks, waiting to be put to work, once people get a chance to work.

MOST NOTEWORTHY: Merck, On2 Technologies and Zions Bancorp were today's noteworthy downgrades:

• UBS downgraded Merck & Co Inc (NYSE: MRK) to Neutral from Buy citing slowing Gardasil trends and vaccine supply issues.
• Merriman cut On2 Technologies Inc (AMEX: ONT) to Neutral from Buy to reflect the reduced visibility into financials and management changes.
• Baird downgraded shares of Zions Bancorporation (NASDAQ: ZION) to Neutral from Outperform to reflect deteriorating credit quality and growing capital concerns. The firm lowered their target price to $32 from $43.

OTHER DOWNGRADES:

• AstraZeneca Plc (NYSE: AZN) was downgraded to Hold from Buy at Deutsche Bank.
• JP Morgan lowered Marshall & Ilsley Corporation (NYSE: MI) to Underweight from Neutral.
• Acme Packet Inc (NASDAQ: APKT) was downgraded to Neutral from Buy at Piper.

MOST NOTEWORTHY: News Corp, Limelight Networks, Corning and Carmike Cinemas were today's noteworthy initiations:

• RBC Capital is positive on News Corporation's (NYSE: NWS) strategy of investing cash flow away from mature enterprises to fund high-growth initiatives such as Sky Italia and Fox Interactive Media. The firm initiated shares with an Outperform rating and $26 target.
  
• Kaufman Brothers rates Limelight Networks Inc (NASDAQ: LLNW) a Sell based on a significant increase in the competitive environment with Akamai discounting on large deals, Level 3 Communications Inc (NASDAQ: LVLT) introducing a competitive offering in November 2007, Korean major-CD Networks becoming aggressive, and new entrants becoming aggressive with their value propositions.
  
• Deutsche Bank initiated Corning Inc (NYSE: GLW) with a Buy rating and $31 target as they believe shares are fundamentally undervalued given the company's strong fundamentals and promising outlook.
  
• Carmike Cinemas Inc (NASDAQ: CKEC) was started at JP Morgan with an Overweight rating. The firm said the company is the most exposed to 3-D, which could lead to potential upside due to low margins and leverage capital structure.

OTHER INITIATIONS:

• UBS started shares of St. Jude Medical Inc (NYSE: STJ) with a Sell rating and $43 target and shares of Medtronic Inc (NYSE: MDT) with a Buy rating and $64 target.
  
• Bear Stearns initiated shares of TJX Companies Inc (NYSE: TJX) and Ross Stores Inc (NASDAQ: ROST) with Peer Perform ratings.
  
• KeyBanc initiated shares of LaSalle Hotel Properties (NYSE: LHO) with a Hold rating.
  
• Caris started shares of Acme Packet Inc (NASDAQ: APKT) with an Above Average rating and $17 target.

Despite the difficulties faced by Vonage (NYSE: VG), the future for VoIP -- Voice over Internet Protocol -- remains attractive to growth-oriented advisors. Jim Oberweis Jr. notes, "VoIP is finally gaining traction -- and people are now getting rid of their phone lines in droves, as the quality of VoIP has dramatically improved."

Indeed, the money manager and editor of The Oberweis Report notes, "At my home, we've replaced our regular phone service with a VoIP connection and I find it virtually indistinguishable from traditional land-line connections."

For those unfamiliar with the technology, he explains, "With VoIP, your voice is converted into a digital signal that travels over the internet. The price is right -- around $35 bucks a month -- for unlimited calls around the world."

Importantly, he does not see the upside opportunity among telephony service providers. Rather, he sees the potential among companies that make the equipment that enables VoIP networks to operate.

He notes, "VoIP is causing an exponential increase in demand for bandwidth." And that, he notes, takes lots of investment and equipment. It represents, he suggests, "the renaissance of the telecommunications equipment industry after six long years in the doldrums." So what companies will benefit from this renaissance?

Several months ago, I talked to a VC, who was kind of glum. He said: "M&A as an exit is OK for our investments. But the big returns come from IPOs. And, if things don't comeback on that front, it will be trouble for the VC industry."

Well, according to a recent piece in SiliconValley.com, there may be hope.

For example, there have been a variety of strong tech IPOs recently. Examples include: Riverbed Technologies, eHealth, and Acme Packet.

In fact, this week, we saw strong performances from Isilon Systems and IPG Photonics.

Interestingly enough, the bad-times may have meant stronger VC-backed companies. That is, they had to focus on building strong business models.

So, while the IPO market is starting to comeback, investors are getting quality deals.

Tom Taulli is the author of various books, including the Complete M&A Handbook and operates DealProfiles.com.

Most Noteworthy: Acme Packet (APKT) and Ultrapetrol (ULTR) were the only two initiations on today's list.

• Acme Packet, Inc. (NASDAQ:APKT) was initiated at ThinkEquity with a Buy and $20 target and initiated at Credit Suisse First Boston with an Outperform and $21 target, both firms cited the emerging Session Border Controller market as the reason for their positive ratings.
• Ultrapetrol (Bahamas) Ltd. (NASDAQ:ULTR) was initiated at Jefferies & Co. with a Buy and $16 target due to its attractive valuation and exposure to the high growth in the South American river barge trade and the expanding PSV market.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

Acme Packet, a company that provides session border controllers that enable interactive communications such as VoIP, has actually raised its terms for its proposed IPO set for pricing tonight.

The new proposed range is $8.00 to $9.00, up from $6.50-$7.50, so it may have an implied market cap of some $550 million. Underwriters in the deal are Goldman Sachs, Credit Suisse, J.P.Morgan and ThinkEquity.

The company has not specified plans for the money other than general corporate purposes such as acquisitions, capital expenditures and investments. Acme was founded in 2000 and it developed the Net-Net family of SBCs and started shipping in the second half of 2002. It lists Alcatel, Nokia, UTStarcom and Ercisson as its larger partners.

Acme began its sales cycle in 2003 and sales reached $36 million last year, essentially breaking even on earnings. In the first half of this year, revenue more than doubled over the prior year to $38 million and it posted an EPS equivalent on a pre-IPO basis of $0.21. Sprint and Time Warner Cable were the two largest customers, and 3 of its 200+ customers account for some 38% of revenues.

It doesn't look like any ties to VoIP have been tainted by Vonage (VG) as far as being an equipment supplier, maybe because Cbeyond (CBEY) has continued to perform so well since its IPO. The company managed to get here on only $45 million of total venture capital funding raised from Menlo Ventures, Canaan Partners, Advanced Technology Ventures, and Beachhead Capital.

Acme Packet has been assigned the ticker "APKT."

Jon Ogg is a partner in 24/7 Wall St., LLC; he does not own securities in the companies he covers.