Analyst Upgrades

• Citigroup upgraded OpenTable (OPEN) to buy from hold, citing stronger than expected near-term trends and traction for the company's Spotlight offering. Citi upped its price target for shares to $70 from $46.
• Wells Fargo upgraded Werner (WERN) to outperform from market perform, citing valuation, the company's reduction in cost, and its above peer exposure to the pricing cycle.
• Goldman upgraded CarMax (KMX) to neutral from sell based on valuation and higher used car profitability. The firm has a $24 target on the stock.
• Apollo Group (APOL) was upgraded to overweight from equal weight at Morgan Stanley.
• Nokia (NOK) was upgraded to overweight from equal weight at Barclays.
• Zions Bancorp (ZION) was upgraded to outperform from market perform at Bernstein.

In the wake of the environmental disaster stemming from the BP (BP) oil spill in the Gulf of Mexico, Congress summoned oil officials to testify over the safety of their offshore drilling.

The oil spill that started back on April 20 when one of BP's offshore drilling platforms exploded continues to leak into the ocean, and could take up to another two months to stop. Following the accident, President Obama imposed a six-month moratorium on deep-water drilling and Congress is now trying to determine the likelihood of another disaster taking place.

The world learned the details about the Apple Inc. (AAPL) iPhone 4G from Steve Jobs yesterday, and while he was presenting the amazing device with 100 new features and 24% slimmer profile, the company stock was sinking. Actually, most stocks were sinking.

The biggest reason for the stocks recent demise: the big cats decided it was time -- and others started to follow. There is nothing wrong with Apple at all and yesterday Jobs pushed out further in the race to produce the best product, stretching a lead he is intent on maintaining. I'm no Apple cheerleader having posted Apple $300 -- Not This Year! last February, when I thought the fanboys were confusing dreams with facts.

"Fear is back and it can be seen in the internals. So what is one to do? What we always do: identify quality, establish value, and take advantage of opportunity when it presents itself," suggests Kelley Wright.

The editor of Investment Quality Trends -- an advisory service that assesses blue chip stocks by analyzing their historic dividend yield levels -- adds, "While all ships go out with the tide, value is eventually rewarded. Remember, we are in this for the long haul.

"Our current Timely Ten -- featured below -- is our reasoned expectation based on our methodology and experience for what we believe will perform best over the next five years. Do we believe that all 10 will go up simultaneously or immediately? Of course not.

The endless oil rising from the floor of the Gulf of Mexico has sunk BP (BP) stock; investors fly away, while the vultures are circling above.

It is sad to learn of BP's poor adherence to basic safety precautions and the conflicts between managers on the drilling rig. It appears from the news reports that have trickled out that this mess was created by more than damaged equipment and poor decisions. The actual decision-making process on the leased Transocean (RIG) platform was faulty from the beginning. Sadly BP is not alone in this regard -- just the most recently exposed.

The market continues to be very volatile and trending down. When the seas are this turbulent you want to be on the biggest ships and thus I continue my review of the super cap stocks. This time, I'm going to examine return-on-equity (ROE) and return on-invested-capital (ROIC).

I started with the 12 highest valued companies but remained with 10 after running them through several screens. Among those 10 super, caps the company that is producing the highest returns is Microsoft (MSFT).

It's a cliché but it rings so true: just show me the money! In the case of stocks that's profits and distributions, or dividends.

The super cap review, in which I examine large cap stocks through different valuation methods, started with the 12 stocks with the highest capitalization and through several stock screens has been trimmed to just 10 stocks.

It has been widely reported that dividends contribute as much as 40% of the market stock appreciation on long term holdings. All things being equal, a diversified basket of dividend paying stocks should outperform a similarly diversified portfolio that does not.

Over the years I have referred to "my pal Warren" (Warren Buffet) on many occasions. He has taught me a great deal. I have learned a few things from Sir John Templeton (RIP) as well. But when I think about the price-to-earnings-to-growth (PEG) ratios, it is Peter Lynch who stands tall.

Lynch has been retired for many years and has been generous enough to share some of his thoughts in a couple of worthy books: One Up on Wall Street and Beating the Street. I highly recommend these best sellers to anyone that wants to expand their knowledge of value investing or manage their own finances.

In my search for value investments among the top twelve stocks by capitalization -- the "super caps" -- I began by reviewing the price-to-earnings and price-to-sales ratios. Today we will move on to examine price-to-book (P/B) and price-to-cash flow (P/CF).

If you are one of the lucky ones that benefited from the market's long rise from the depths of Hades and are now looking to rotate into less volatile positions, or you still remain apprehensive and want to stake out a new position, some of these super caps may be just for you.

It does not come as a surprise that the government leaders and bankers of the European Union have put up what they hope will be a buttress against further erosion of the Euro, and the nightmare that is the Greek economy. Over the weekend with the Sword of Damocles hanging over their heads, they fabricated a $962 billion bailout package not unlike some of the wonders created last year by the United States.

I was surprised by the size of this economic band-aid and while the market has bounced back on the news, the best news might be for the maker of Band-Aids, Johnson and Johnson (JNJ). Last week Barron's was talking it up, and I did not give it much thought because there are better opportunities for growth and/or dividends. However, I think it is time to reconsider it because the economic band-aids are not solutions. They do not heal anything they only help to prevent infection. If the illness is the cancer of deficit spending, then they do even less. For real protection, it may be time to compromise on some growth and settle for blue chip stocks and JNJ is among the bluest of the blue.

One of our regular readers, Dan B., asked me Monday morning if I thought British Petroleum p.l.c. ADS (BP) was a buy, given how much it has collapsed in the wake of the Gulf of Mexico oil spill resulting from an explosion on a Transocean (RIG) deep water drilling vessel that killed 11 people, who have yet to be found.

The oil spill is certainly a black swan as it was only a short while ago I recommended Transocean and RIG has been clobbered along with BP.

Dan, no doubt, is aware that the stock market pendulum often over-swings the mark and is wondering if now is the time of opportunity, or will it come later? To buy, or not to buy, that is the question.

By and large, earnings expectations remain high as earnings season rolls on this week. Analysts surveyed by Thomson Reuters expect double-digit annual earnings growth from Avon (AVP), Kellogg (K) and Whirlpool (WHR) to Chicago Mercantile Exchange (CME), DuPont (DD) and Northrop Grumman (NOC).

Big Oil steps into the earnings spotlight this week as well. Wall Street is anticipating big profit growth from BP (BP), Chevron (CVX), ConocoPhillips (COP), which we look at more closely below, Exxon Mobil (XOM) and Royal Dutch Shell (RDS.A), as well as from Apache (APA) and Occidental (OXY). Even Hess (HES) is forecast to have swung to a profit from last year's net loss.

It is mind boggling that Hugo Chavez, the authoritarian President of Venezuela is racing towards a mock socialist political system when the two largest socialist regimes in the world, China and Russia, have done the opposite. Even our long standing communist adversary (now trading partner) Vietnam entered the 21st Century on a capitalist influenced spring loaded economic boom.

BusinessWeek reports in its latest edition that the Chavez government has been taking privately held supermarkets under government control:

Analysts surveyed by Thomson Reuters are looking for life insurance giant MetLife Inc. (MET) to report that its earnings rose 80.0% from a year ago to $0.95 per share for the three months that ended in December. Revenue, however, is expected to total $12.6 billion, which is down 10.1% from a year ago, during a fourth quarter in which it offered guidance and declared a quarterly dividend. The analysts' forecast for the full year calls for earnings of $2.89 per share (-25.7%) on $48.3 billion in revenue (-5.3%). This New York-based insurer's earnings results have been better than expected in three of the past four quarters, beating estimates by as much as 20 cents per share.

MetLife's long-term EPS growth forecast is 10.7%, which is better than that of competitor Prudential Financial Inc. (PRU), and its earnings multiple is 8.8x. The First Call consensus recommendation has been to buy MET for more than 90 days, despite a recent downgrade of the stock. The mean price target is $42.87. Shares have been trading between $32.00 and $40.00 since August and closed the week at $35.32.

Here are some highlights from this past week's earnings coverage on BloggingStocks:

• Amazon.com Inc. (AMZN) better-than-expected Q4 numbers due to strong holiday sales of media products.
• BlackRock Inc. (BLK) reported strong Q4 results and doubled assets under management due to an acquisition.
• Caterpillar Inc. (CAT) shares fell despite better-than-expected Q4 earnings as guidance fell short of the Street view.
• DeVry Inc. (DV) reported better-than-expected Q2 numbers due to increasing enrollments, which lifted shares.
• EMC Corp. (EMC) reported strong Q4 results that beat the Street view and offered full-year guidance.
• General Dynamics Corp. (GD) Q4 results fell short of expectations and its guidance was less than estimates.