UBS initiated Interpublic Group (NYSE: IPG) and Omnicom Group (NYSE:OMC) with Buy ratings and an $11 target and $62 target, respectively. The firm views valuation as attractive.
NASDAQ has released its short interest for the end of March, with a March 31, 2008 cut off date. Overall short interest fell by a rate of some 1.2% on NASDAQ for the two-week period to 9,657,092,223. Interestingly enough, there were a few standouts that saw some major gains in short selling.
The percentage terms on Level 3 are not that great, but the raw number of shares is significant.
These were not the only gainers out there, but the bets against some of these rising short interest stocks were staggering. You can check NASDAQ short interest on any of these stocks or others at the NASDAQ Trader site dedicated to short interest.
As Joseph Lazzaro wrote earlier, the market has been selling-off today on inflation concerns, but not all stocks have been hit by today's sell off. In fact, there have been a handful of notable names that have managed to gain ground in today's session.
Shares of wireless carrier Leap Wireless International Inc. (NASDAQ: LEAP) have been surging today, even as the company reported yesterday evening a third-quarter loss of $43.3 million, or 64 cents a share. Analysts had only been expecting to see the wireless carrier show a loss of 22 cents a share, excluding items, according to Reuters Estimates. Included in the company's loss figures were 55 cents per share related to a quarterly change in tax accounting methods. Excluding that, Leap posted a loss of 9 cents a share, handily beating analyst estimates.
The company had a pretty good quarter overall. If you take a look at sales, you see a very respectable jump of 40% in the quarter, which is a great increase. The company posted a third-quarter revenue of $409.7 million, topping analysts' expectations for sales of $405.6 million.
Looking ahead, a Bear Stearns analyst said he anticipates strong gains for Leap Wireless due to the Christmas shopping season. The wireless carrier is also optimistic and expects further improvements in key areas like subscriber growth.
As the market continues to deal with mounting economic concerns, do not be surprised to see the company continue to move higher into next week.
Last week, MetroPCS Communications (NYSE: PCS) ended its $4 billion merger deal for Leap Wireless (NASDAQ: LEAP), which thought the deal wasn't good enough. Both companies provide wireless services to those that the major carriers -- like Verizon (NYSE: VZ) and AT&T (NYSE: T) -- tend to avoid (such as low-income customers).
Well, LEAP shareholders may be regretting things. On the company's latest news bomb, the stock has plunged 34% to $38.33. In fact, since late July, the stock is down a stunning 61%.
First of all, LEAP said it will have to restate financial results for 2004, 2005, 2006 and the first half of 2007. The items include service revenues, operating expenses and so on. The amount is about $20 million or so.
Not so big, huh? Maybe not. After all, the company could be in default on its $890 million of debt.
Oh, and the company garnered only 36,500 subscribers in Q3 (the goal was 40,000). And, it looks like Q4 growth will be meager too.
All in all, it's hard to find anything good here. Then again, Leap's space is full of buyout activity so I wouldn't be surprised if we eventually hear some more buyout buzz on the company, especially in light of the big cut in the valuation.
Priceline (NASDAQ: PCLN)'s higher profits are taking shares up 14%. And Rio Tinto (NYSE: RTP) is up 9% on buyout rumors.
Jones Soda (NASDAQ: JSDA) is trading off 19% due to poor earnings. And Leap Wireless (NASDAQ: LEAP) is off 15% on news that it will have to restate earnings.
MOST NOTEWORTHY: Monster Worldwide, Business Objects, Arcelor Mittal, Walgreen and Sealy Corp were today's noteworthy downgrades:
Wachovia downgraded shares of Monster Worldwide (NASDAQ: MNST) to Market Perform from Outperform citing increased risk of an economic slowdown and execution issues in its N.A. Careers segment.
Credit Suisse downgraded shares of Business Objects (NASDAQ: BOBJ) to Neutral from Outperform on valuation with shares above their $46 target.
Banc of America downgraded Arcelor Mittal (NYSE: MT) to Neutral from Buy on valuation. The firm also downgraded Walgreen (WAG) to Sell from Buy, as they see further downside following the Q4 miss and believes the problems in Q4 are company-specific and not industry-wide.
Citigroup downgraded shares of Sealy Corporation (NYSE: ZZ) to Sell from Hold following the Q3 results, as they believe Sealy faces increased competitive pressures at the high end of the market where the best margins are derived.
OTHER DOWNGRADES:
Goldman Sachs removed Cisco Systems (NASDAQ: CSCO) and Nucor (NYSE: NUE) from its Conviction Buy List.
Over the past two years, the shares of mobile-phone companies have rallied sharply, both in absolute terms and relative to the S&P 500 index.
Since September 2005, the Dow Jones U.S. Telecommunications Sector -- which has an equivalent exchange-traded fund, the iShares Dow Jones U.S. Telecommunications Sector Index Fund (NYSE: IYZ) -- has gained 40%, outpacing the broad market by more than 21 percentage points.
Despite all the euphoria, a number of recent developments suggest the bullish tide is turning and the sector could be in for a rough ride in the weeks and months ahead.
Consider the following:
Growing competition. Last Friday, BloggingStocks' Douglas McIntyre noted that "an all out price war" brewing in Japan could be a sign of things to come in a saturated U.S. market.
MOST NOTEWORTHY: CACI Int'l (CAI), Abercrombie & Fitch (ANF), Kohl's (KSS) and the software sector were today's most noteworthy upgrades:
JP Morgan upgraded CACI Int'l (NASDAQ: CAI) to Overweight from Underweight, considering the company an attractive, defensive stock and a "safe haven" based on the government exposure.
Friedman Billings upgraded Abercrombie & Fitch (NYSE: ANF) to Outperform from Market Perform citing ongoing cost-cutting and MG&A lines.
Deutsche Bank upgraded Kohl's (NYSE: KSS) to Buy from Neutral citing valuation and successful execution of its marketing, merchandising and store expansion plans.
Bear Stearns upgraded the software sector to Market Weight from Underweight on valuation...
OTHER UPGRADES:
UBS upgraded Home Depot (NYSE: HD) to Neutral from Sell.
JP Morgan raised Blockbuster (NYSE: BBI) to Overweight from Neutral.
FTN Midwest upgraded to Seagate (NYSE: STX) to Buy from Neutral.
MOST NOTEWORTHY: Websence (WBSN), RF Micro Devices (RFMD), Fiserv (FISV), Qwest (Q), and OSI Pharma (OSIP) were today's noteworthy upgrades:
JP Morgan upgraded shares of Websence (NASDAQ: WBSN) to Overweight from Underweight ahead of the renewal period starting in the December quarter and expects this momentum to drive shares higher.
RF Micro Devices (NASDAQ: RFMD) was raised to Buy from Hold at Citigroup, who said the Sirenza Microdevices (SMDI) deal gives the company its first real prospect for gross margin expansion in years.
Matrix USA upgraded Fiserv (NASDAQ: FISV) to Buy from Sell, and expects the company to benefit from the Checkfree (CKFR) acquisition.
Lehman upgraded shares of Qwest (NYSE: Q) to Overweight from Equal Weight, citing the hiring of industry veteran Ed Mueller as CEO. The firm believes the new CEO removes an overhang and could lead to a change in strategic direction and significantly increase capital spending.
JP Morgan upgraded OSI Pharma (NASDAQ: OSIP) to Overweight from Underweight based on valuation and upcoming catalysts for Tarceva that should be seen in the next year...
OTHER UPGRADES:
UBS upgraded Allstate (NYSE: ALL) to Neutral from Sell.
MOST NOTEWORTHY: Radian Group (RDN), Heelys (HLYS), Sonus Networks (SONS), Leap Wireless (LEAP) and MetroPCS (PCS) were today's noteworthy downgrades:
Radian Group (NYSE: RDN) was downgraded to Hold from Buy with a $23 target at Citigroup on concerns over the company's potential merger with MGIC Investment (MTG).
Heelys (NASDAQ: HLYS) was downgraded to Neutral from Outperform at Baird, to Hold from Buy at Brean Murray, to Neutral from Overweight at JP Morgan, to Sector Performer from Outperformer at CIBC and to Market Perform from Outperform at Wachovia following the company's FY07 guidance which was well below the consensus.
Sonus Networks (NASDAQ: SONS) was downgraded to Sell from Neutral at Merriman, as the firm believes there are a number of concerns that are not reflected in shares, including a flat N-T revenue outlook, a cut in 700bp in gross margins and a sharp uptick in receivable days, among other things.
LeapWireless (NASDAQ: LEAP) and MetroPCS were both downgraded to Hold from Buy at Citigroup, as they believe the break in subscriber momentum will last for 6-9 months. Wachovia downgraded Leap Wireless to Market Perform from Outperform citing mixed Q2 results and weak Q3 guidance.
OTHER DOWNGRADES:
UBS removed Coca-Cola (NYSE: KO) and Coach (NYSE: COH) from its Strategic Stock Selection List.
Jones Apparel (NYSE: JNY) was downgraded to Sell from Neutral at Merrill Lynch.
MOST NOTEWORTHY: Leap Wireless (LEAP), Cergaon Networks (CRNT), Cinemark (CNK), Regal Entertainment (RGC) and Ocean Power Tech (OPTT) were today's noteworthy initiations:
Leap Wireless International Inc. (NASDAQ: LEAP) was initiated with an Outperform rating and $103 target at Pacific Crest, as the firm believes the company's long-term opportunity with new-market expansion is underappreciated.
Pacific Crest also initiated shares of Ceragon Networks Ltd. (NASDAQ: CRNT) with an Outperform rating and $12 target, as the firm believes accelerating wireless data growth is driving backhaul demand.
Cinemark Holdings Inc. (NYSE: CNK) was initiated with an Overweight rating at Morgan Stanley, a Buy rating and $21 target at Banc of America and a Buy rating at Merrill Lynch; Banc of America believes the current box office strength could drive upside to estimates.
Morgan Stanley also initiated shares of Regal Entertainment Group (NYSE: RGC) with an Equal Weight rating.
Ocean Power Technologies Inc. (NASDAQ: OPTT) was initiated with a Buy rating and $24 target at Banc of America and a Neutral rating at First Albany.
OTHER INITIATIONS:
Telanetix Inc. (NASDAQ: TNXI) was initiated with a Buy rating and $8.50 target at Kaufman Bros, as the firm believes the company's market opportunity is significant and thinks it could be an interesting acquisition target if the telepresence market development accelerates.
Banc of America initiated shares of OceanFreight Inc. (NASDAQ: OCNF) with a Buy rating and $23 target.
MOST NOTEWORTHY: Bluefly, Inc (BFLY), Leap Wireless International, Inc (LEAP), Kona Grill, Inc (KONA), MetroPCS Communications, Inc (PCS) and Beacon Roofing Supply (BECN) were today's more noteworthy initiations:
Merriman believes FY07 is a transitional year for Bluefly (NASDAQ: BFLY), starting the company with a Neutral rating, and finds the stock fairly valued at current levels.
Robert W. Baird expects growth at Leap Wireless International (NASDAQ: LEAP) to be fueled by upcoming market launches, starting shares with an Outperform rating.
Thomas Weisel is positive on Kona Grill's (NASDAQ: KONA) expansion, same-store sales growth, ramping unit volumes and corporate G&A leverage, starting shares with an Outperform rating.
Robert W. Baird expects MetroPCS Communications (NYSE: PCS) growth to be fueled by upcoming market launches and initiated shares with an Outperform rating and $14 target.
Needham believes shares of Beacon Roofing Supply (NASDAQ: BECN) have overreacted to the weak residential new construction market, which represents only 20% of business, and started shares with a Buy rating and $22 target...
MOST NOTEWORTHY: Microsoft (MSFT), Dell (DELL), Hewlett-Packard (HPQ) and certain broker/dealers were some of today's notable initiations:
Soleil initiated Microsoft (NASDAQ: MSFT) with a Buy rating and $33 target, expecting a strong upgrade cycle near-term and anticipates expanding addressable markets and its global footprint in the long-term.
Dell Inc (NASDAQ: DELL) was initiated with an Above Average rating and $27 objective at Caris. The firm expects Dell to have 2-3 potentially "sloppy" quarters and believes investors will give it a "pass," as the company's current valuation reflects a majority of the near-term risk.
Caris also started Hewlett-Packard Co (NYSE: HPQ) with an Above Average rating along with a $44 objective.
Lehman Brothers started coverage on the U.S. ethanol sector with a Neutral rating. The firm initiated Aventine Renewable Energy Holdings, Inc (NYSE: AVR) with an Overweight rating and $23 target.
Wedbush started Guess?, Inc (NYSE: GES) with a Buy rating and $49 target.
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MOST NOTEWORTHY: The U.S. Retail Hardlines Sector, the BioFuels Sector, Interpublic Group and Omnicom Group were today's noteworthy initiations:
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Over the past two years, the shares of mobile-phone companies have rallied sharply, both in absolute terms and relative to the 
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