Analyst Upgrades

• Expedia (EXPE) to buy from hold at Citigroup.
• Weatherford (WFT) to outperform from market perform at Wells Fargo.
• Abercrombie & Fitch (ANF) to buy from neutral at BofA/Merrill.
• MDC Holdings (MDC) to outperform from neutral at Credit Suisse.
• AutoNavi (AMAP) to buy from neutral at Goldman.
• Ciena (CIEN) and Nvidia (NVDA) to neutral from underweight at JPMorgan.
• Canadian Pacific (CP) to outperform from market perform at Raymond James.
• First Midwest (FMBI) and Quiksilver (ZQK) to buy from hold at Jefferies.
• Sonic (SONC) to neutral from negative at Susquehanna.
• MIPS Technologies (MIPS) to buy from hold at Benchmark Co.
• Arrow Electronics (ARW) and Avnet (AVT) to buy from hold at Stifel Nicolaus.

Avnet Inc. (NYSE: AVT) is one of the largest distributors of semiconductors and computer-related products in the world.

After falling from more than $40 in 2007, its common stock bottomed in October 2008, well before the bear market low in March. Since then, it has been trading in a bull channel with a top around $29 and low at $23.

The long-term trend of this favored blue chip is up, but recent profit-taking has driven it below $25 and could even result in a test of the support line at $23. S&P rates this stock as a strong buy (five stars) with a price objective of $33. From a technical standpoint, the chart's objective is also $33.

When selecting which stocks to buy, ratings from agencies like Standard & Poor's can be useful in creating a balanced portfolio.

But did you know technical analysis is the most accurate way to predict where a stock -- or the market for that matter -- is going?

Technical analysis is more of an art than a science, but when used correctly it can boost your profits to new heights. I took a look at stocks that S&P has a four- or five-star rating on and analyzed their charts to come up with six great technical trades for you.

The earnings crunch is in full swing, and here are a few of the highlights of this past week's earnings coverage from BloggingStocks:

• American Express Co. (NYSE: AXP) reported a slip in profits and warned of slow growth in 2008.
• Alberto-Culver (NYSE: ACV) returned to profitability after a spin-off and restructuring.
• Avnet Inc. (NYSE: AVT) beat expectations and offered a revised forecast.
• Black & Decker Corp. (NYSE: BDK) beat expectations but lowered its outlook due to the housing slump.
• Eastman Kodak Co. (NYSE: EK) fell short of earnings estimates, sending shares lower.
• Hershey Co. (NYSE: HSY) responded to disappointing results by announcing price increases.
• Kraft Foods Inc. (NYSE: KFT) fourth-quarter profit fell on higher costs for raw materials.
• Lenovo Group Ltd. (OTC: LNVGY) nearly tripled quarterly earnings on strong demand for PCs in Asia.
• MasterCard Inc. (NYSE: MA) beat expectations, even after excluding a one-time investment gain.
• McCormick & Co. (NYSE: MKC) posted solid results on strength in international markets.
• McDonald's Corp. (NYSE: MCD) beat expectations, but reported flat same-store sales in December.
• Procter & Gamble Co. (NYSE: PG) reported strong second-quarter results on strength in emerging markets.
• SanDisk Corp. (NASDAQ: SNDK) reported a profit but missed revenue expectations.
• Sherwin-Williams Co. (NYSE: SHW) missed estimates and lowered expectations for the next quarter.
• 3M Co. (NYSE: MMM) beat expectations despite a decline in profits.
• Tyson Foods Inc. (NYSE: TSN) profits fell and it announced a plan to raise prices.
• Verizon Communications Inc. (NYSE: VZ) met earnings estimates but fell short of revenue expectations.

For additional BloggingStocks earnings highlights, see Yahoo!, Google, Amazon, Countrywide, Merck, UBS and others and Exxon, Boeing, Halliburton, Sony, UPS, Honda and others.

Avnet (NYSE: AVT) distributes electronic components, computer products, software and embedded subsystems to more than 100,000 manufacturers and resellers in the Americas, the Middle East, Asia, Africa and Europe. The Electronics Marketing division provides such products as semiconductors, electronic connectors, electronic wires and cables, electromechanical products and interconnect assemblies. The Technology Solutions division sells mid- to high-end servers, enterprise computing systems, data storage products and software. The firm also provides financial and technical services. Suppliers include Cisco Systems (NASDAQ: CSCO), Hewlett-Packard (NYSE: HPQ) and Oracle (NASDAQ: ORCL).

The firm pleased investors last week, when it announced fiscal Q2 EPS of 89 cents and revenues of $4.75 billion. Analysts had been expecting 85 cents and $4.56 billion. Management also guided Q3 EPS to 85-89 cents (85 cent consensus) and Q3 revenues to $4.37-$4.57 billion ($4.35B consensus).

Manufacturers and resellers generally prefer to do business with large, well-established distributors. On the electronics side, one of the biggest such outfits is headquartered in Phoenix. It serves customers in 70 countries.

Avnet (NYSE: AVT) distributes electronic components, computer products, software and embedded subsystems to more than 100,000 manufacturers and resellers in the Americas, the Middle East, Asia, Africa and Europe. The Electronics Marketing division provides such products as semiconductors, electronic connectors, electronic wires and cables, electromechanical products and interconnect assemblies. The Technology Solutions division sells mid- to high-end servers, enterprise computing systems, data storage products and software. The firm also provides financial and technical services. Suppliers include Advanced Micro Devices (AMD), Cisco Systems (CSCO), Hewlett-Packard (HPQ), IBM (IBM), Microsoft (MSFT), Motorola (MOT) and Oracle (ORCL).

The firm pleased investors earlier in the month, when it announced fiscal Q4 EPS of 81 cents and revenues of $4.24 billion. Analysts had been expecting 76 cents and $4.2 billion. Management also guided Q1 EPS to 69-73 cents (73 cent consensus), Q1 revenues to $4.0-$4.2 billion ($4.12B consensus) and FY08 EPS to $3.17-$3.31 ($3.15 consensus). Citigroup subsequently upgraded the issue from "hold" to "buy." The earnings news ultimately popped the stock into a bullish "pennant" consolidation pattern. Prices frequently exit pennants moving in the same direction they were traveling when they entered them. In this case, that would be to the upside.

Altogether, brokers now recommend the shares with two "strong buys," four "buys" and four "holds." Analysts see a 17% average annual growth rate through the next five years. The AVT P/E ratio (14.92), Price to Sales ratio (0.37), Price to Book ratio (1.72), Price to Cash Flow ratio (13.04), Price to Free Cash Flow ratio (8.77), Sales Growth rate (17.32%) and EPS Growth rate (35%) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 95% of the outstanding shares. The stock is one of those used to calculate the S&P 400 MidCap Index. Over the past 52 weeks, it has traded between $18.28 and $44.68. A stop-loss of $33.70 looks good here.

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

MOST NOTEWORTHY: Hess Corp (HES), American Home Mortgage Investment Corp (AHM) and Anglo American plc (AAUK) were today's noteworthy downgrades.

• Lehman Brothers downgraded Hess Corp (NYSE: HES) to Underweight from Equal-Weight based on valuation.
• American Home Mortgage Investment Corp (NYSE: AHM) was cut to Underperform from Market Perform at Keefe Bruyette, to Market Perform from Outperform at Friedman Billings, to Equal-Weight from Overweight at Lehman Brothers, to Sell from Hold at Citigroup and to Hold from Buy at Deutsche Bank.
• Anglo American plc (NASDAQ: AAUK) was downgraded to Underperform from Market Perform at BMO Capital Markets based on valuation.

OTHER DOWNGRADES:

• Murphy Oil Corp (NYSE: MUR) was cut to Equal-Weight from Overweight at Lehman.
• Credit Suisse downgraded Alaska Air Group, Inc (NYSE: ALK) to Neutral from Outperform.
• Gabelli downgraded shares of A. Schulman, Inc (NASDAQ: SHLM) to Hold from Buy to reflect the company's weak second-quarter.
• Raymond James downgraded Avnet, Inc (NYSE: AVT) to Market Perform from Outperform.
• Blyth, Inc (NYSE: BTH) was cut to Sell from Hold on valuation.

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