Analyst upgrades:

• Goldman said International Paper (NYSE: IP) is its top pick in the group citing leverage to early cycle containerboard. The firm upgraded shares to Conviction Buy from Buy and has a $26 target on the stock.
• Morgan Keegan upgraded Healthcare Realty Trust (NYSE: HR) to Outperform from Market Perform citing valuation and better-than-expected Q2 results.
• William Blair upgraded Harbin Electric (NASDAQ: HRBN) to Outperform from Market Perform as it believes the Chinese economy is likely to accelerate and the company's balance sheet is strengthened following the retirement of debt.
• Allstate (NYSE: ALL) was upgraded to Buy from Neutral at BofA/Merrill.
• VeriSign (NASDAQ: VRSN) was upgraded to Outperform from Neutral at Credit Suisse.
• Commercial Vehicle Group (NASDAQ: CVGI) was upgraded to Overweight from Underweight at JPMorgan.

Analyst upgrades:

• Societe General upgraded BASF AG (OTC: BASFY) to Buy from Hold. The firm believes the bad news is out and that BASF has a strong market position.
  
• Pali Capital upgraded Hot Topic (NASDAQ: HOTT) to Buy from Neutral based on the ongoing merchandise catalyst, the opportunity to reclaim the mainstream kid and closing underperforming stores, which create the most favorable conditions in the last 5+ years.
  
• Stanford upgraded L-1 Identity (NYSE: ID) to Buy from Hold on valuation, and the firm sees little risk to the company from the Obama Administration.
• Gymboree (NASDAQ: GYMB) and Windstream (WIN) were raised to Overweight from Neutral at JP Morgan.
  
• Doral Financial (NYSE: DRL) was upgraded at B. Riley to Buy from Neutral.
  
• Alumina (NYSE: AWC) was upgraded to Buy from Neutral at UBS.

Analyst downgrades:

• Credit Suisse downgraded Targanta (NASDAQ: TARG) to Underperform from Outperform following the FDA Panel's rejection of Oritavancin.
  
• Citigroup downgraded BASF AG (OTC: BASFY) to Sell from Hold and sees no reason to own the stock following the company's profit warning. Shares were also downgraded at WestLB to Hold from Add.
  
• Deutsche Bank downgraded shares of Amedisys (NASDAQ: AMED) to Hold from Buy and lowered its target to $53 from $75 on concerns over the company's deteriorating A/R aging trends.
• VeriFone Holdings (NYSE: PAY) and Navios Maritime (NYSE: NMM) were lowered to Neutral from Overweight at JP Morgan.
  
• NTT DoCoMo (NYSE: DCM) was downgraded at Citigroup to Hold from Buy.

Analyst initiations:

• Needham expects shares of Cepheid (NASDAQ: CPHD) to be driven by continued market penetration in the hospital acquired infection market, new test introductions, GeneXpert Infinity sales, and molecular diagnostics growth from sales outside of traditional molecular testing areas. Shares were initiated with a Buy rating and $21 target.
  
• Needham also initiated Gen-Probe (NASDAQ: GPRO) with a Hold rating and expects market share gains for the company when PANTHER is approved in 2010/2011.
  
• William Blair believes Harbin Electric (NASDAQ: HRBN) is an "interesting" opportunity for exposure to rapid growth in infrastructure within the People's Republic of China. The firm started shares with a Market Perform rating.
• Boston Scientific (NYSE: BSX) was initiated with a Buy rating and $11 target at UBS.
  
• NutriSystem (NASDAQ: NTRI) was initiated with a Neutral rating at Janney Montgomery.
  
• Ener1 (NYSE: HEV) was assumed at JMP Securities with an Outperform rating and $9 target.
  

As a strong player in the market of motoring China -- by this I mean providing motors to a wide variety of sectors -- Harbin Electric, Inc. (NASDAQ: HRBN) is a company with great long term potential.

Its specialty is linear motors and special electric motors, which it designs and markets not just to China but also abroad. Linear motors are more efficient motors, and Harbin holds three patents on its core technology that helps give it an edge over competition. The company supplies motors for a variety of industries and services, including factory automation, conveyor systems, oilfield services, packaging equipment and mass transportation systems. Based in Harbin, China it currently has 275 employees.

Although the company's fiscal year consensus EPS estimate was recently lowered from $0.89 to $0.74, I still think there is plenty of room for long-term growth. Based on the phenomenal industrial growth in China, which equates with a need for more motors in these key areas, along with the efficacy of HRBN's linear motors and its proprietary technology, as well as its push into new markets, I think Harbin will see excellent growth in the years to come.

Only recently listed on the NASDAQ exchange, Harbin also recently announced formation of a new subsidiary in the U.S. that focuses on expanding the company into the automation controllers market, and this along with its motor technology could allow it to lead the industrial motor marketplace. I think HRBN shows great potential within the next two to three years.

Type of stock: Cyclical stock in the industrial materials sector, Harbin Electric supplies linear motors and special electric motors to a wide variety of industries in China as well as abroad.

Price target: Harbin is a stock to buy and hang onto over the long-term (I emphasize long-term). Currently trading toward the higher end of its 52-week range, at $14.67, I'd feel comfortable buying Harbin now and socking it away in the portfolio for a few years. Within 24 months, you should see a double.

Hilary Kramer is a financial editor and money coach for AOL and an authority on investing. Visit her at www.hilarykramer.com.

Last December, over 100 stocks were featured in our Top Picks for 2007 report. Now, at mid-year, we turn to the 20 advisors whose picks showed the strongest gains to get an update on their previous picks, as well as a new favorite stock for the second half of the year.

Ian Wyatt, editor of Growth Report, chose LJ International (NASDAQ: JADE) as his favorite for 2007, which rose an exceptional 173% and put Wyatt in the top spot among all advisors in the annual report. Here is his original recommendation and his current opinion on the stock.

For his favorite for the balance of 2007, he continues to look toward China, with his selection of Harbin Electric Inc. (NASDAQ: HRBN). The advisor explains, "Harbin is a growing manufacturer of linear motors in China. Revenues are currently derived in China, but the company has its sights on international markets.

"Strong demand for industrial applications in China will drive the market for linear motors, including factory automation, airport applications, packaging and the oil service industries. Low-cost manufacturing facilities in a modern, 200,000-square-foot manufacturing facility, coupled with cheaper labor costs in China, give Harbin an added competitive advantage.

"A linear motor is an electric motor that produces linear force, in contrast to the rotary torque produced by conventional motors. More important, linear technology is clean, efficient, and generates high speeds. Other advantages include quietness, lower long-term maintenance costs, small size, easy control and installation, and the ability to be used in adverse conditions.