With a name like Rock of Ages Corporation (NASDAQ: ROAC), you know the company must be a tombstone and memorial marker maker. Correct. But the company also supplies granite for products unrelated to memorial purposes, such as countertops, landscape and/or sidewalk designs, and various types of plaques and awards. The company operates its own quarry in New England, and has spent the last year restructuring itself back towards profitability. A combination of cost control measure plus enhanced productivity initiatives seems to be helping Rock of Ages carve a niche for itself in the granite products industry. In recent 2Q 2007 earnings, CEO Kurt Swenson stated the company will return to profitability for 2007 as a whole. If the recent quarter is any indication, Swenson is correct. Rock of Ages narrowed its losses by 60% in the first half of 2007. The company posted revenues of $3.9 million in 2Q 2007, very welcome news from the $307,000 net loss posted in 2Q 2006.

Profit margins are up and the company's retail backlog is up by almost $1 million, meaning it has more work coming in that it can handle immediately. Gross profit increased almost 20% for the quarter, with all three business segments - quarry operations, manufacturing (products) and retail sales (memorials) - posting double digit profit margins. Winter weather stayed late this spring, so the company lost some ground due to inability to fully utilize quarry operations. But the introduction of more efficient equipment means the company can make up some of that loss. Administrative expenses declined and the company did not incur any additional restructuring charges this quarter. Income from continuing operations was a healthy $0.53 per diluted share, a vast improvement over a $0.04 diluted share loss one year ago. The stock currently trades at just under $6 per share. Every portfolio needs a few oddball investments. This one qualifies as that.

MOST NOTEWORTHY: Granite Construction Inc (GVA), Sunterra Corp (SNRR), Halliburton Co (HAL) and Golfsmith International Holdings, Inc (GOLF) were today's notable downgrades:

• Matrix USA downgraded Granite Construction Inc (NYSE: GVA) to Sell from Buy on valuation.

• CL King cut Sunterra Corp (OTC: SNRR) to Neutral from Strong Buy.

• UBS removed Halliburton Co (NYSE: HAL) from its U.S. Strategic Stock Selections List.

• JP Morgan cut Golfsmith (NASDAQ: GOLF) to Neutral from Overweight, cutting risk to full-year guidance.

OTHER DOWNGRADES:

• Bank of America cut Spirit Finance Corp (NYSE: SFC) to Neutral from Buy following news that an Australia-based consortium led by Macquarie Bank Ltd will acquire Spirit for $14.50/share.

• Baird downgraded Diamond Management & Technology Consultants Inc (NASDAQ: DTPI) to Neutral from Outperform following its lowered Q4 outlook.

• Goldman cut Holly Energy Partners (NYSE: HEP) to Neutral from Buy on valuation.

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