"The urge to merge is growing among global corporations. Near-record cash holdings, improved stock markets and increased regulations (which often drive consolidation) should fuel an increase in deal activity," says dividend expert Chuck Carlson.

Th editor of The DRIP Investor explains, "While I don't recommend stocks simply because they represent attractive takeover stocks, takeover appeal is an added kicker. Three such targets are Cabot Corp. (CBT), Molex (MOLX) and Hess Corp. (HES).

Like many oil and oil services companies, the stock of integrated oil and natural gas giant Hess Corp. (HES), first discussed here April 22, 2009, at a price of $50.41, has vectored higher this winter, rising from $67 to $82. Hence, if you haven't already, now would be a good time to take some profits with HES if you're in near $50.

However, those investors who can tolerate the risk can maintain their full position with HES, as the shares are headed north.

After meandering for the better part of 2010 due to sluggish U.S. gasoline sales amid the recession, in 2011 Hess has provided a textbook example concerning why one should sell an integrated oil stock reluctantly: for reasons why, note the price of gasoline at your local gas station.

Talk about close calls. The shares of integrated oil/natural gas giant Hess Corp (HES), came very close to being stopped out at $47, after totally misbehaving since early spring/summer, during a plunge from $66.

However, after testing $48 four times, the shares found support, and HES has since zoomed higher, taking out $70 resistance, including a gap-up at $69.

Given, the close call, now may be a good time to consider taking some profits off the table with Hess. Those investors who can tolerate the risk can hold on to their full position, and go for a bigger gain: Hess should trade in the $80-85 range in 2011.

Analyst Upgrades

• Wells Fargo upgraded PG&E (PCG) to outperform from market perform and raised its range for shares to $50 to $52 from $44 to $46, citing the proposed settlement in the company's 2011 General Rate Case.
• Jefferies upgraded Huntsman (HUN) to buy from hold and raised its price target for shares to $17 from $12, citing valuation and the likelihood for favorable earnings revisions.
• RBC Capital upgraded Jack in the Box (JACK) to outperform from sector perform with a $28 target, citing checks showing improved fast food sales in recent months and easy comps.
• Sonic (SONC) was upgraded to outperform from sector perform at RBC Capital and $12 price target.
• Synaptics (SYNA) was upgraded to overweight from neutral at JPMorgan and $40 price target.
• Excel Maritime (EXM) was upgraded to buy from hold at Cantor and raised its price target to $7 from $5.

The shares of integrated oil/natural gas giant Hess Corp (HES), have totally misbehaved since early spring, with the stock falling more than 20% after testing highs near $67. Hess was first discussed here on April 22, 2009 at a price of $50.41.

Hess also came dangerously close to the sell/stop loss at $47. A considerable portion of that selling was U.S. deepwater offshore drilling moratorium-related, as about 16% of Hess' production is based in the Gulf. Still, the moratorium will affect 2011 volumes, not 2010, but it appears some institutional investors exited the stock as soon as the U.S.'s moratorium was put in place.

Analyst upgrades:

• Oppenheimer upgraded Goldman Sachs (GS) to Outperform from Perform following the company's $550M settlement with the SEC. Opco has a $213 price target for Goldman shares. BofA/Merrill upgraded Goldman Sachs to Buy from Neutral and raised its price target to $182 from $160.
• Wells Fargo upgraded JP Morgan (JPM) to Outperform from Market Perform following the company's Q2 results citing valuation and lower credit costs. The firm keeps a valuation range for shares of $48-$51.
• Goldman upgraded Murphy Oil (MUR) to Buy from Neutral and has a $61 price target on the stock. The firm cites Murphy's Eagle Ford growth and valuation for the upgrade.
• Precision Cast (PCP) was upgraded to Outperform from Neutral at Credit Suisse.
• Pride International (PDE) was upgraded to Buy from Hold at Jefferies.
• BHP Billiton (BHP) was upgraded to Overweight from Neutral at HSBC.

Analyst Upgrades

• UBS upgraded UPS (UPS) and FedEx (FDX) to buy from hold based on recent weakness and leverage to a recovery. The firm raised its price target on UPS to $74 from $72 and on FedEx to $100 from $97.
• Bernstein upgraded Medicis (MRX) to outperform from market perform based on valuation and said the company has been executing well over the past few months. The firm has a $28 price target on the stock.
• Citigroup upgraded Weingarten Realty (WRI) to buy from hold, citing valuation and the company's improved balance sheet. The firm maintains a $24 price target for shares.
• Home Depot (HD) and Lowe's (LOW) were upgraded to market perform from underperform at BMO Capital.
• NextEra Energy (NEE) was upgraded to outperform from neutral at Baird.
• Nokia (NOK) was upgraded to neutral from reduce at WestLB.

Hess Corp. (HES), which I first wrote about on April 22, 2009, at a price of $50.41, has registered more progress since the last look. Look for integrated oil giant Hess to post a solid revenue/earnings performance in 2010, propelled higher by increases in upstream (oil and gas production) operations, which will benefit from high oil prices.

Downstream, Hess' refining sector, like other refiners, will be hurt by continued, low margins, due to relatively low gasoline demand in the U.S. It's possible that margins could begin to recover in early 2011, if 2010 U.S. job growth exceeds 2 million positions.

Analyst Upgrades

• B. Riley upgraded Prosperity Bancshares (PRSP) to buy from neutral after the company acquired 19 Texas branches of Missouri-based First Bank. The firm has a $45 price target on shares.
• JPMorgan upgraded Fortinet (FTNT) to overweight from neutral on valuation following the recent pullback in shares. The firm has a $20 price target on the stock.
• Wells Fargo upgraded Lamar Advertising (LAMR) to outperform from market perform. The firm believes the stock's risk/reward ratio is compelling, as its checks indicate that advertising continues to accelerate in Q1.
• Caterpillar (CAT) was upgraded to overweight from underweight at Morgan Stanley.
• SAP AG (SAP) was upgraded to market perform from underperform at FBR Capital.
• BioMarin (BMRN) was raised to buy from hold at Roth Capital.

One of the first rules of behavioral maturity is, "Don't expend $1,000 worth of emotion over a 5-cent irritation."

Hence, don't get upset over those prices at the pump -- prices that almost certainly are headed much higher -- but profit from them, by owning Hess Corp (HES). I'm obviously reiterating my buy rating for the company's shares, first recommended on April 22, 2009 at a price of $50.41.

If you bought HES in April 2009, you're up about 20%. If you didn't, don't fret; there's more upside ahead.

Analyst upgrades:

• Pali Capital upgraded Lazard (LAZ) to buy from neutral, citing a healthy restructuring environment, improving M&A and strength in the asset management segment. The firm has a $46 target on shares.
• Baird upgraded Scansource (SCSC) to outperform from neutral, citing strength in the channel business and growth drivers from improved telephony and security. The firm has a $30 target on shares.
• Citigroup upgraded Liberty Interactive (LINTA) to buy from hold, citing the company's QVC unit's return to growth. The firm raised its target on shares to $13.25 from $12.
• Hess Corp (HES) was upgraded to overweight from equal weight at Morgan Stanley.
• Vulcan Materials (VMC) was upgraded to buy from neutral at UBS.
• Dillard's (DDS) was upgraded to buy from hold at Deutsche Bank.

So far, institutional investors (IIs) have not noticed that Hess Corp.'s (NYSE: HES) upstream operations (exploration and production) should benefit from high oil prices in the $80 per barrel range. But the argument here is that eventually they will, preferably starting in early 2010, which is why I'm reiterating my Buy rating for the company, first recommended on April 22, 2009 at a price of $50.41.

Right now, IIs are fixated on the lower margins of downstream operations, which Hess and other refiners are coping with, as a result of recession-induced sluggish U.S. gasoline sales. The First Call FY2009/FY2010 EPS estimates for HES are $1.63 to $3.66.

Analyst upgrades:

• Citigroup upgraded Schlumberger (NYSE: SLB) to Buy from Hold on valuation and the company's exposure to a potential upturn in international drilling. The firm raised its target on shares to $80 from $56.
• UBS upgraded Allegheny Tech (NYSE: ATI) to Buy from Neutral and raised its target to $43 from $31 and believes the end of jet engine and other destocking will result in an initial recovery into 2010, even before an order ramp into 2011.
• Merriman upgraded Acorda Therapeutics (NASDAQ: ACOR) to Buy from Neutral based on the favorable FDA panel outcome and set a $30-$33 target range on the stock. Baird upgraded Acorda to Outperform from Neutral and raised its target to $28 from $24. Following the panel review, Baird expects Amaya to be approved in 1H10 and would be buyers into the mid/high $20s.
• Chicago Bridge & Iron (NYSE: CBI) was upgraded to Buy from Neutral at Goldman.
• PG&E (NYSE: PCG) was upgraded to Buy from Neutral at UBS.
• Newfield Exploration (NYSE: NFX) was upgraded to Outperform from Market Perform at Wells Fargo.

It's a difficult call, but I'm Reiterating my Buy rating for Hess Corp. (NYSE: HES), first recommended on April 22, 2009 at a price of $50.41.

Hess' shares have underperformed over the past half-year, but I'm sticking with the play, for now, pending results over the next two quarters.

Analyst upgrades:

• Keefe Bruyette upgraded KeyCorp (NYSE: KEY) to Outperform from Market Perform due to valuation and the company's capital position. The firm has an $8 target price on the stock.
• BofA/Merrill upgraded its view of the semiconductor sector and upgraded Intel (NASDAQ: INTC) and Marvell Technology (NASDAQ: MRVL) to Buy from Neutral, LSI Corp. (NYSE: LSI) to Buy from Underperform, and Maxim (NASDAQ: MXIM) and National Semiconductor (NYSE: NSM) to Neutral from Underperform. The firm now sees 2010 revenue growth of 21% vs. its prior estimate of 14% due to improving electric demand and lean inventories.
• Thomas Weisel upgraded Vital Images (NASDAQ: VTAL) to Overweight from Market Weight based on compelling valuation and potential upside from its new ViTAL Enterprise product offering.
• Jones Apparel (NYSE: JNY) was upgraded to Buy from Neutral at Goldman.
• Hess Corp. (NYSE: HES) was upgraded to Overweight from Equal Weight at Barclays.
• Nationwide Health (NYSE: NHP) was upgraded to Outperform from Market Perform at Morgan Keegan.