Analyst Upgrades

• Bristol-Myers (BMY) to hold from underperform at Jefferies.
• Pep Boys (PBY) to buy from hold at Stifel Nicolaus.
• Tesla Motors (TSLA) to overweight from equal weight at Morgan Stanley.
• Emerson (EMR) to buy from hold at Deutsche Bank.
• ARM Holdings (ARMH) to buy from neutral at BofA/Merrill.
• NetLogic (NETL) and Cavium Networks (CAVM) to buy from hold at Auriga.
• Aimco (AIV) to hold from sell at Citigroup.
• Ceragon Networks (CRNT) to overweight from equal weight at Barclays.

Analyst Upgrades

• RBC Capital upgraded Syniverse (SVR) to outperform from sector perform based on strong secular growth in mobile data and roaming. The firm raised its price target to $28 from $23.
• Deutsche Bank upgraded PG&E (PCG) to buy from hold with a $49 price target due to valuation.
• Jefferies assumed coverage on Sierra Wireless (SWIR) with a buy from a hold and raised its price target to $12 from $9. The analyst expects the M2M market to experience 25% growth over the next two years.
• Affiliated Managers (AMG) was upgraded to buy from neutral at Goldman.
• EastGroup Properties (EGP) was upgraded to buy from neutral at UBS.
• Gammon Gold (GRS) was upgraded to neutral from underperform at Credit Suisse.

Analyst upgrades:

• Citigroup upgraded Robert Half (NYSE: RHI) to Hold from Sell following the company's Q2 results, believing the worst may be behind the company. Citi raised its target on shares to $24 from $18.
• Goldman upgraded AnnTaylor (NYSE: ANN) to Buy from Neutral and raised its target to $13 from $6.50, citing improved merchandising and inventories.
• Baird upgraded TrueBlue (NYSE: TBI) to Outperform from Underperform and raised its target to $12 from $9, citing the better-than-expected Q2 report and guidance, strong balance sheet, and valuation.
• F5 Networks (NASDAQ: FFIV) was upgraded to Neutral from Underperform at BofA/Merrill.
• Credit Suisse (NYSE: CS) was upgraded to Buy from Hold at Deutsche Bank.
• Sanmina (NASDAQ: SANM) was upgraded to Neutral from Underperform at Credit Suisse.

Tel-Aviv based Ceragon Networks (NASDAQ: CRNT) will be releasing its second quarter earnings on July 20. After a miserable first quarter, in which profits fell 95% over the year-ago quarter, investors are skittish about the stock's prospects. My view: for investors, Ceragon is a good long-term play.

Here's why. First, the company has got a great business. It is a key player in helping wireless carriers increase the speed at which data flows over their networks. The company's equipment connects wireless base stations to a mobile operator's main network, where traffic flows. It's this transmission technology that is critically important to carriers as demand for data services -- and for smartphones -- rises. And they are both rising.

Analyst upgrades:

• Citigroup upgraded shares of Akamai (NASDAQ: AKAM) to Buy from Hold following the company's Q4 results as they believe fundamentals are stabilizing. The firm raised their target price to $22 from $12.
  
• Baird upgraded Theravance (NASDAQ: THRX) to Outperform from Neutral. The firm said the company looks poised to realize the two-product success necessary to drive profitability, and Horizon will likely play a role in succeeding $7B+ Advair. Note that last night Theravance/Glaxo (GSK) reported positive results for Horizon.
  
• RBC Capital said Aeterna Zentaris (NASDAQ: AEZS) is on the cusp of a Cetrorelix deal and has turned more positive on shares. Shares were upgraded to Outperform from Sector Perform.
  
• Marvell Tech (NASDAQ: MRVL) was upgraded to Buy from Neutral at Goldman and added to the firm's Conviction Buy List.
  
• Sangamo BioSciences (NASDAQ: SGMO) was raised to Buy from Neutral at Merriman.
  
• Arthur J. Gallagher (NYSE: AJG) was upgraded at Piper Jaffray to Buy from Neutral.

Analyst upgrades:

• Oppenheimer upgraded AmerisourceBergen (NYSE:ABC) to Outperform from Perform on the company's strong branded drug price inflation, potential for greater than expected buybacks, and their belief that prescription volume growth will stabilize after Q1. The firm raised their target to $45 from $36.
  
• Baird upgraded Ecolab (NYSE:ECL) to Outperform from Neutral based on valuation following reaffirmed guidance.
  
• Goldman removed shares of Dollar Tree (NASDAQ:DLTR) from its Conviction Sell List and upgraded it to Neutral from Sell based on valuation.
• Teppco Partners (NYSE:TPP) was upgraded to Outperform from Market Perform at Wachovia.
  
• Barrick Gold (NYSE:ABX) was raised to Buy from Hold at Canaccord.
  
• Coca Cola Femsa (NYSE: KOF)) was upgraded at Morgan Stanley to Overweight from Equal Weight.

Analyst downgrades:

• RBC Capital downgraded Apple (NASDAQ:AAPL) shares to Underperform from Sector Perform and lowered their target to $70 from $125 following the announcement that CEO Steve Jobs is taking a medical leave of absence. The analyst expects shares to be pressured by reduced earnings growth expectations and near-term leadership uncertainty.
  
• Barclays downgraded Motorola (NYSE:MOT) to Equal Weight from Overweight as they do not expect handset recovery for at least 6 to 9 months.
  
• Banc of America/Merrill downgraded Shire (NASDAQ:SHPGY) to Underperform from Buy based on earnings risk from the upcoming generic launch of Adderall XR.
• Royal Caribbean (NYSE:RCL) was added to Goldman's Conviction Sell List.
  
• Starent Networks (NASDAQ:STAR) and Ceragon Networks (NASDAQ:CRNT) were downgraded to Equal Weight from Overweight at Barclays.
  
• Casella Waste (NASDAQ:CWST) was lowered at JP Morgan to Neutral from Overweight.

Analyst initiations:

• Citigroup initiated Cliffs Natural (NYSE:CLF) with a Buy rating and $43 target. The firm believes the company's multi-tier North American contract sales arrangements should allow it weather the volatility in the spot and seaborne markets and the firm expects volumes to improve in Q2.
  
• ING started Arcelor Mittal (NYSE:MT) with a Sell rating and believes the economic slowdown will have a greater than expected impact on the steel industry.
  
• Friedman Billings believes weakness in M&T Bank's (NYSE:MTB) regional economy could hinder the company's growth prospects and the firm is concerned about the bank's concentration in commercial and industrial loans. The firm has an Underperform rating and $30 target on the stock.
• S&T Bancorp (NASDAQ:STBA) was initiated with a Market Perform rating at Keefe Bruyette.
  
• RBC Capital initiated Norfolk Southern (NYSE:NSC) with a Sector Perform rating and $61 target.

Shares of battered Israeli WiMax company Ceragon Networks (NASDAQ: CRNT) are surging today on the heels of a strong earnings report. As reported by Briefing.com: "earnings of $0.13 per share, in-line with the First Call consensus of $0.13; revenues rose 48.0% year/year to $55.2 mln vs the $49.5 mln consensus."

Ira Palti, President and CEO of Ceragon, spoke about strong rising global demand for the company's products. Demand was also strong in the Asia-Pacific region. Shares in Ceragon, along with fellow Israeli WiMax company Alvarion (NASDAQ: ALVR), have been hit very hard during this bear market, on concerns that WiMax is more hype than a business. Today's earnings from Ceragon reinforce the fact that these companies continue to grow very rapidly and continue to sign deals.

Long term technology investors should keep an eye on this space.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer's fund has a position in both CRNT and ALVR. He has no positions in any other stock mentioned, as of 7/21/08.

MOST NOTEWORTHY: American Eagle, Hologic and British Airways were today's noteworthy downgrades:

• Friedman Billings downgraded American Eagle (NYSE: AEO) to Underperform from Market Perform citing slowing top-line growth, difficult macro-environment, and the challenging women's category.
  
• Soleil cut Hologic (NASDAQ: HOLX) to Hold from Buy as it believes the cancellation of the FDA Radiological Devices Panel means a further delay in the tomosynthesis pre-market approval application.
  
• ABN downgraded shares of British Airways (Other OTC: BAIRY) to Sell from Hold as it believes the recent rally in the face of higher oil prices is unjustified. Shares were also lowered at Deutsche Bank to Sell from Buy as it believes the company may not be able to raise ticket prices enough to offset higher fuel costs.

OTHER DOWNGRADES:

• ArthroCare (NASDAQ: ARTC) was cut to Accumulate from Buy at ThinkPanmure.
  
• ING downgraded J Sainsbury (Other OTC: JSAIY) to Sell from Hold.
  
• RBC Capital downgraded Ceragon Networks (NASDAQ: CRNT) to Sector Perform from outperform.

I've focused some of my writing and research on these pages on the hype surrounding WiMAX, an emerging telecommunications technology that could make broadband wireless access a reality. Some of the best WiMAX technology in being developed in Israel by firms like Alvarion (NASDAQ: ALVR) and Ceragon (NASDAQ: CRNT). In spite of on-again, off-again news coming out of big players like Sprint Nextel (NYSE: S), my thesis has always been that we can debate all we want as to whether WiMAX will hit in the U.S. The truth is that WiMAX is already happening in the rest of the world.

MarketWatch is out with a story this morning about some of the action happening in the telecommunications space surrounding WiMAX. In Big investments rumored for wireless technology, MarketWatch reporter, Therese Poletti takes the usual tack by pointing out both sides of the argument that WiMAX "is full of potential to drive cheaper, high-speed wireless data, voice and video communications, or a dismal failure, depending on who you talk to."

The same article cites a spokesperson for chip-giant, Intel (Nasdaq: INTC), as saying that Intel "remains bullish on WiMAX, saying the technology is definitely 'ready for prime time.'"
.

Remember the January Effect? A phenomenon where stocks, especially small caps, rally from the end of December, through the first week of trading in January, as investors are able to buy into names that had been sold in order to recognize tax losses. This has been a forgotten strategy for investors over the last few years, but my hunch is that we will see it return stronger than ever this year. Why? Because some of these stocks have gotten crushed due to the market volatility since the summer, and their big losses were exaggerated by tax loss selling. Here are two picks that are poised to gain from the January Effect:

Federal Home Loan Mortgage Corp. (NYSE: FRE) - while not a small-cap, this stock nonetheless should be in store for a spike. The government-sponsored enterprise creates liquidity in the residential mortgage market by guaranteeing, purchasing, securitizing and investing in such loans. FRE has lost more than have of its value recently, and certainly part of that was caused by sellers looking for a loss.

Ceragon Networks (NASDAQ: CRNT) - The WiMax company has been in a downturn ever since it had trouble doing a secondary offering, which ended up being priced just before the announcement that Sprint/Nextel (NYSE: S) was exiting this WiMax network. Investors should look at this with a bit of perspective, as Intel (NASDAQ: INTC) and Nokia (NYSE: NOK) are all still forging ahead with the technology. My buddy Zack Miller has a nice analysis of this. Look for Ceragon to have a strong bounce over the next few weeks.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. Disclosure: Writer has no position in any stock mentioned as of 12/19/07.

Investment banks kicked off coverage today of a small Israeli wireless backhaul firm, Ceragon Networks (NASDAQ: CRNT). The banks generally seem to like it. I see Jeffries, Bank of America and Lehman all with buys on the small firm.

As I see it, there are a couple of issues with the current wireless infrastructure:

• Current backhaul infrastructure in emerging markets cannot handle huge traffic growth
• Because the market is quite consolidated, it's hard for new entrants to penetrate into the industry
• Carriers are looking to deploy fully-IP networks

These dynamics bode well for Ceragon, which commands about a 10% market share in its niche. Ceragon is a pure-play in the wireless backhaul and stands to benefit from robust growth driven by expansion into new markets and increasing use of data applications. The company also white-labels its products to sell through Nokia (NYSE: NOK). This dependence, while a boon for the company and helps to contribute to 35% yearly growth estimates, also entails risk as the global wireless powerhouse has been a 10% customer for the past few quarters.

"We believe that the proper comparables for Ceragon [are] those vendors directly competing in the wireless backhaul space, along with the broader communications equipment universe that service the carrier channel," the Lehman Brothers initiation report on the company said. "Given the company's revenue growth dynamics and exposure to wireless data growth, we believe that Ceragon should trade at a premium to wireless backhaul providers and legacy, lower growth vendors in the carrier channel." Lehman put a $16 price target on the firm.

Zack Miller is the managing editor of IsraelNewsletter.com and a former equity analyst for a leading multinational hedge fund. Author holds no positions in the stocks mentioned above.

Investors learned last week that Sprint Nextel Corporation (NYSE: S) and Clearwire Corporation (NASDAQ: CLWR) were ending their agreement to create a nationwide, high-speed WiMAX network, citing the complexity it would have added to their businesses. Sprint said in a separate statement that it would review its WiMAX business plan and outlook in light of the announcement and plans to make further comments on the topic early next year.

BloggingStock's Aaron Katsman seemed to blame some of this fallout on Sprint's own internal issues, but deferred positing a true forecast on the future of WiMAX. Whether or not WiMAX overhauls telecommunications as we know it, there are two smallish firms already benefiting from the limited roll-out of WiMAX in emerging markets -- both happen to be Israel-based.

Alvarion Ltd. (NASDAQ: ALVR)'s strength comes in winning projects in emerging markets. Markets that the big-boys aren't ready to play in. The company finished the 3rd quarter with 200 commercial deployments, up from about 170 at the end of their second quarter. Sprint's decision not to move forward with their large WiMAX project doesn't seem to have affected Alvarion's ability to win new deals, though the stock has been pounded after a recent earnings report. Cisco recently purchased a WiMAX firm called Navini, and I wouldn't seem surprised to see another large player buy Alvarion.

Well, the speculation (finally) turned into a news story: Israel's prime minister, Ehud Olmert, announced yesterday that he's fighting prostate cancer.

Whether the market agrees or not with Olmert's Kadima government politics, the Tel Aviv stock market was spooked yesterday at the premonition that something was wrong, really wrong with Olmert. Rumors arose that he was suffering from an advanced neurological disorder that would prevent him from continuing in office.

I could almost hear Benjamin Netanyahu buttoning-up to come in off the bench.

In spite of the ongoing instability in the Israeli government, the Israeli economy and stock market continues to smoke. The Israeli shekel has appreciated strongly versus the dollar (8.5% since August alone) and the country has seemed to rein in inflation (1.5% over 12 months). Export growth has moderated somewhat, but should still put in a strong showing at somewhere between 9% and 10%. GDP growth probably will check in around 5% this year. Check out what Bank of Israel governor (and previous vice chairman of Citigroup) Stanley Fischer had to say earlier this year about Israel's macroeconomic strength.

Israel's economy from a macro perspective is interesting. But as a whole, there are other economies with higher GDP growth. What makes Israel really interesting is its technology export industry. After the United States, Israel has the most number of companies listed on the NASDAQ. Recent high-fliers like Zoran Corp. (NASDAQ: ZRAN) and Ceragon (NASDAQ: CRNT) make for some interesting investment opportunities in small cap and mid cap companies.

I like to think of investing in some of the smaller Israeli companies as late-stage venture investing. Home runs are certainly possible; you just need to do the work.

Stay tuned.

Ceragon Networks (NASDAQ: CRNT) provides microwave transmission terminal hardware and network management software that enable wireless service providers to deliver voice, Internet browsing, music and video applications. The firm's systems are used by more than 150 service providers and hundreds of private networks, in 85 countries. Ericsson (NASDAQ: ERIC) is a major competitor.

Investors were pleased earlier in the week, when the company reported Q3 EPS of 13 cents and revenues of $44.5 million. The Street had been looking for 12 cents and $39.3 million. Management also guided FY07 revenues to about $159.4-$162.6 million, versus Street consensus of $151.76 million. Broadpoint Capital subsequently reiterated a "strong buy" on the stock and declared a price target of $25. RBC Capital Markets reiterated an "outperform" and declared a $22 target. The stock popped on the news and then passed 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.

MOST NOTEWORTHY: Toronto Dominion, Cytec Industries, Ceragon Networks, Micron and Navteq were today's noteworthy downgrades:

• CIBC downgraded shares of Toronto Dominion (NYSE: TD) to Sector Performer from Outperformer following the Commerce Bancorp (NYSE: CBH) acquisition, as they see integration risks and believes the deal will limit the company's ability to buyback stock.
  
• Cytec Industries (NYSE: CYT) was downgraded to Hold from Buy at Jefferies, as they believe near-term risks to demand and margins could bring a better entry point by 1H08. Target lowered to $75 from $79.
  
• Collins Stewart downgraded shares of Ceragon Networks (NASDAQ: CRNT) to Underperform from Buy on valuation and uncertainties surrounding the stock, which include the NEC infringement issue and increased competition.
  
• Micron Technology (NYSE: MU) was downgraded to Accumulate from Buy at ThinkEquity. The firm is cautious on the sustainability of PC related demand and questions component order levels relative to PC sell through.
  
• Banc of America downgraded shares of Navteq Corporation (NYSE: NVT) to Neutral from Buy following Nokia's (NOK) proposed buyout.

OTHER DOWNGRADES:

• JP Morgan downgraded Companhia Vale do Rio Doce (NYSE: RIO) to Neutral from Overweight.
  
• Goldman removed Johnson Controls (NYSE: JCI) from its Conviction Buy List.
  
• Citigroup downgraded GameStop Corp (NYSE: GME) to Hold from Buy.
  
• Friedman Billings downgraded Brookfield Asset Management (NYSE: BAM) to Neutral from Outperform.