Analyst Upgrades

• Xilinx (XLNX) to buy from hold at Auriga.
• Orion Energy (OESX) to buy from neutral at Roth Capital.
• Goodyear Tire (GT) to buy from fair value at CRT Capital.
• RadioShack (RSH) to neutral from underperform at Wedbush.
• Novo Nordisk (NVO) to buy from neutral at Goldman.

Some positive signs are blowin' in the wind. Maybe they're enough to underpin a real recovery. Maybe not. But they are definitely positive, and together, may be the foundation of a stock rally with some strength. Here are some of them.

Dividends: General Electric (GE), Weyerhaeuser (WY) and many other companies are raising theirs. GE's quarterly dividend went from 10 cents a share early this year to 12 cents to 14 cents. If you own it by December 27, you'll get it on January 25. GE is almost a surrogate for the economy as a whole since it has so many divisions, offering many products and services. When GE raises its dividend it means the board and management see better times ahead. Companies hate to raise or initiate dividends only to rescind them a few months or even a year later. They know some investors buy the stock for income, and if that shrinks, those investors sell, push the price down and move to another stock. Watch for more companies to raise their payouts (especially banks). It's a sure sign they see better earnings ahead.

MAJOR PAPERS:

• The Wall Street Journal reported that President Bush picked former advisor Robert Zoellick to take over the World Bank from Paul Wolfowitz; Mr. Zoellick, now a vice chairman at Goldman Sachs Group Inc (NYSE: GS), was a trade representative and deputy secretary of state.
• The Institutional Shareholder Service has advised shareholders of medical device maker Biomet Inc (NASDAQ: BMET) to turn down a $10.9B private equity deal for the company, according to the Wall Street Journal.
• The Financial Times reported that the IntercontinentalExchange Inc (NYSE: ICE) has signed an exclusive deal with the CBOT Holdings Inc (NYSE: BOT), a move that could advance ICE's unsolicited bid for the Chicago Board of Trade.
• Rather than focus on potential take-out targets, Barron's Online's "Weekday Trader" said that the smart bet for investors is to focus on companies with rising profits, cash flows and dividends, such as Loews Corp-Carolina Group (NYSE: CG) and Imperial Tobacco Group plc (NYSE: ITY), which boast free cash and dividends.

OTHER PAPERS:

• Best Buy Co Inc (NYSE: BBY) is in talks with Vivek for a "foray" into India, the Economic Times reported.
  
• The Washington Post reported that Nigeria filed criminal charges against Pfizer Inc (NYSE: PFE) over child deaths.

Billionaire investor Carl Icahn gets lots of satisfaction needling companies. So he is surely happy today as he has increased the pain for one of his biggie targets, the beleaguered Motorola, Inc. (NYSE: MOT).

That is, Icahn got the support of the Institutional Shareholder Services (ISS) for his proxy fight. That's a big win because many institutional investors tend to follow ISS.

Oh, and ISS had this zinger: "MOT has significantly underperformed its peers over recent quarters and by most accounts is expected to struggle the remainder of the year."

Ouch.

No doubt, Icahn has years and years of practice with proxy fights. And in the case of Motorola, it's looking like he will get some traction (he also owns roughly 3% of the outstanding shares).

On the news, Motorola's stock increased 1.59% to $17.92.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

The powerful shareholder advisory firm, Institutional Shareholder Services (ISS), indicated that shareholders should reject the $1.25 billion buyout of Genesis HealthCare Corp. (NASDAQ: GHCI). The buyers include private equity firms Formation Capital LLC and JER Partners.

Apparently ISS thinks that other bidders didn't have a chance to make a play for the company. In other words, Genesis shareholders may be leaving money on the table.

Genesis, of course, begs to differ. In fact, the company wrote a letter to shareholders saying that the deal is "compelling" and is valued at "all-time" highs for financial multiples for Genesis. Besides, the deal is getting close to completion and there could be a drop in the stock price if things don't go through.

Investors, however, don't seem to agree. The stock price for Genesis is currently at $63.26, above the buyout price of $63. In other words, meaning they think the price will get bumped up.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

The New York Times Co. (NYSE: NYT) shareholders were urged by Institutional Shareholder Services, an influential proxy advisory service, to withhold their votes from the company's board of directors to protest the newspaper publisher's corporate governance.

At issue is the dual-class stock ownership structure at the Times, which enables the Sulzberger-Ochs family to retain control. Morgan Stanley (NYSE: MS) fund manager Hassan Elmasry has tried unsuccessfully to get the Times to change the stock ownership structure. Sulzberger responded by withdrawing his family's money from Morgan Stanley.

ISS recommends that the jobs of publisher and chairman held by Arthur Sulzberger Jr. be split up. It didn't call for the removal of the directors but argued that they should be more accountable to shareholders.

Good point

Shares of the New York Times have dropped more than 50 percent over the past five years. There is little hope that they are going to recover anytime soon.

As I've said before I think the Times is a great but flawed newspaper and would be far better off as a private company. Note that I've done freelance work for the paper.

The Wall Street Journal (subscription required) sums up the situation well.

"The fight is quixotic, however, because the stock structure can be changed only by the controlling shareholders, and they have been unwilling to do so," the paper said.

It's coming up on that time of year again! Proxy season: the one time where corporate management teams can actually be held accountable to their shareholders. According to the Wall Street Journal (registration required), only about one third of individual shareholders actually vote their proxies, which allow them a say in electing directors, certain corporate policy proposals and, more often now, executive compensation.

How well is a stock you own doing on the corporate governance front? Institutional Shareholder Services prepares Corporate Governance Quotients on many publicly traded companies. You can view the company score on Yahoo!finance. For example, on the profile page for McDonald's, we see that: "McDonald's Corp.'s Corporate Governance Quotient (CGQ®) as of 1-Mar-07 is better than 59.5% of S&P 500 companies, and 94.3% of Consumer Services companies." For a more detailed look at a company CGQ score, you can go to the ISS's Issue Atlas page for the company.

Factors influencing the CGQ, according to the ISS website include: (1) board structure and composition, (2) audit issues, (3) charter and by-law provisions, (4) laws of the state of incorporation, (5) executive and director compensation, (6) qualitative factors, (7) D&O stock ownership, and (8) director education. The score for each core topic reflects a set of key governance variables.

Use the CGQ to examine the corporate governance of every stock you own. Browse around on the ISS page for additional information about corporate governance and proxy voting.