Citigroup raised Ann Taylor (NYSE: ANN) to Hold from Sell. The firm upgraded shares following the company's Q2 upside and believes guidance for the second half of 2008 is appropriately conservative.
Jefferies upgraded China Sunergy (NASDAQ: CSUN) based on valuation,and improved liquidity and silicon supply outlook.
Stephens upgraded infoUSA (NASDAQ: IUSA) shares to Overweight from Equal Weight to reflect the stock's valuation, new management, improvements in expense controls and the potential to become a takeover target.
Citigroup raised BB&T (NYSE: BBT) to Buy from Hold.
JP Morgan downgraded Novartis (NYSE: NVS) to "neutral" from "overweight", according toBriefing.com. The news service also reports that Citigroup added Freeport McMoran (NYSE: FCX) to its "Top Picks" list.
MOST NOTEWORTHY: Assured Guaranty, Limelight Networks and Monotype Imaging were today's noteworthy initiations:
UBS expects Assured Guaranty (NYSE: AGO) to increase shares in the public finance guaranty market and take advantage of reinsurance opportunities. Shares were initiated with a Buy rating and $31 target.
Merriman assumed Limelight Networks (NASDAQ: LLNW) with a Neutral rating. The firm believes investors should remain cautious until a ruling in the company's patent infringement trial is handed down.
Monotype Imaging (NASDAQ: TYPE) was initiated at Banc of America with a Buy rating and $16 target. The firm highlighted the company's strong revenue visibility and attractive valuation. Shares were also initiated at JP Morgan with an Overweight rating, citing TYPE's discounted valuation and solid IP licensing franchise.
As I wrote a few weeks ago, traders and fans of low priced stocks should ignore fallen blue chips like Ford Motor Co (NYSE: F) and Sirius Satellite Radio (NASDAQ: SIRI) and focus more on smaller volatile stocks like China Precisions Steel Inc (NASDAQ: CPSL) and Solarfun Power Holdings (NASDAQ: SOLF). Not just because fallen blue chip stocks are all about guessing major business trends and the time lags involved with pricing those into their stocks -- good luck with that -- but because these lesser known plays offer much more predictability due to their speculative nature.
Earnings, profit margins, product potential is all well and good for long-term investors in higher-priced names, but here in the gutter of the stock market (also known as penny stock land), those variables are highly irrelevant to predicting hourly, daily and even weekly price swings. Down here it's all about self fulfilling prophecies, pumping and message board hype.
Take for example, Middlebrook Pharmaceuticals (NASDAQ: MBRK), mercilessly pumped by TheStreet.com's Adam Feuerstein for the past several months as a takeover candidate, as his sources indicate bidders in the $6 to $8 range. Now he might be right -- not that it's going to matter to the SEC -- and while he certainly can't compete with CNBC, in terms of effectiveness, his credibility and frequent teasing have predictably pumped this stock up a solid 20-30% so far.
MOST NOTEWORTHY: Limelight Networks, Diebold and Charles & Colvard were today's noteworthy upgrades:
Jefferies upgraded shares of Limelight Networks (NASDAQ: LLNW) to Hold from Underperform on valuation and believes it impossible to know what will happen to the company from here. On the downside, Jefferies notes a permanent injunction means the business is nearly worthless, but on the upside, is the possibility of sale to Akamai (NASDAQ: AKAM) or a large telecomm service provider.
Baird raised Diebold (NYSE: DBD) to Outperform from Neutral citing expectations of a higher bid from United Technologies (NYSE: UTX).
Merriman upgraded shares of Charles & Colvard (NASDAQ: CTHR) to Buy from Neutral on valuation, as they believe the current share price does not account for the potential wholesale value of the company's manufactured inventory and method patent. They believe Charles & Colvard is a potential acquisition target.
OTHER UPGRADES:
Goldman raised Eaton (NYSE: ETN) to Conviction Buy from Neutral and added Royal Caribbean (NYSE: RCL) to its Conviction Buy List.
Credit Suisse downgraded both Verizon (NYSE: VZ) and AT&T (NYSE: T) to "neutral" from "outperform," according toBriefing.com.
Comcast (NASDAQ: CMCSA) was downgraded to "neutral" from "outperform" at Credit Suisse, according to24/7 Wall St.. The financial website also reported that Limelight Networks (NASDAQ: LLNW) was downgraded to "market perform" from "outperform" at Oppenheimer.
MOST NOTEWORTHY: Electronics for Imaging, Fundtech and VIA Pharmaceuticals were today's noteworthy initiations:
Banc of America initiated Electronics for Imaging (NASDAQ: EFII) with a Buy rating and $26.50 target, as it sees leverage potential in 2008 from cost reductions and revenue mix and believes stronger controller revenue mix and ink from inkjets could help gross margin in 2H08.
JMP Securities expects Fundtech (NASDAQ: FNDT) to benefit from an upgrade cycle among large banks to improve their payment systems, starting shares off with a Market Outperform rating and $19 target.
Rodman & Renshaw resumed coverage of VIA Pharmaceuticals (NASDAQ: VIAP) with an Outperform rating and $4 target. The firm expects VIAP's VIA-2291, a treatment for Antherosclerosis, Ph II data expected in mid-2008 to drive shares.
OTHER INITIATIONS:
Oppenheimer initiated Ardea Biosciences (NASDAQ: RDEA) with a Buy rating and $15 target.
SAP AG (NASDAQ: SAP) was initiated with an Equal Weight rating at Lehman.
CIBC resumed coverage of Limelight Networks (NASDAQ: LLNW) with a Sector Outperformer rating.
MOST NOTEWORTHY: Concur Tech, TranS1 and Third Wave were today's noteworthy initiations:
Broadpoint initiated Concur Tech (NASDAQ: CNQR) with a Strong Buy rating and $40 target. The firm believes Concur has attractive growth drivers, room for leverage, and is a market leader for innovation and growth. Wachovia is positive on TraS1's AxiaLIF procedure in lumbar fusions as it is less invasive and patients have a faster recovery period. The firm views the potential market at over $1B and started shares off with an Outperform rating.
Shares of TranS1 (NASDAQ: TSON) were also initiated with a Buy rating and $27 target at Piper Jaffray, as they believe the company's focus on minimally invasive surgical technique for treating lower back pain provides a large market opportunity, and at Cowen with an Outperform rating, as they positive on TSON's minimally invasive platform in spinal fusions that should leaded rapid growth.
Collins Stewart said Third Wave (NASDAQ: TWTI) is on track to file PMA submissions for 2 new screening tests for HPV by early next year and started shares with a Buy rating and $11 target.
OTHER INITIATIONS:
Piper initiated Ardea Biosciences (NASDAQ: RDEA) with a Buy rating.
JP Morgan initiated Lukoil (NASDAQ: LUKOY) with a Neutral rating.
Cowen started shares of Limelight Networks (NASDAQ: LLNW) with a Neutral rating.
With the credit crunch, it seems that private equity is losing its luster, right? Maybe not. After all, with better valuations, the opportunities may be looking good.
Today we learned that the vice president and chief financial officer of Internap Network Services (NASDAQ: INAP), David Buckel, is leaving. And, yes, he's exploring opportunities in the private equity space.
Buckel has spent four years at the company, which is an operator of a content delivery network (CDN). Basically, this allows for improved distribution of online content and applications. There are more than 3,500 customers and revenues increased 32.7% to $60.9 million in Q3.
No doubt, this is far from good news for Internap. Keep in mind that the company must compete against fierce rivals, such as Akamai Technologies (NASDAQ: AKAM) and Limelight Networks (NASDAQ: LLNW). In fact, there are some signs of a price war.
So far in today's trading, Internap's stock is down nearly 8% to $10.82.
MOST NOTEWORTHY: Allscripts, Supertel Hospitality, Cephalon, Limelight Networks and Financial Federal were today's noteworthy downgrades:
Allscripts (NASDAQ: MDRX) was downgraded to Neutral from Outperform at JP Morgan following its weak Q3 results and guidance.
Supertel Hospitality (NASDAQ: SPPR) was downgraded to Neutral from Outperform at Baird and to Market Perform from Outperform at JMP Securities following its disappointing Q3 report.
JMP securities downgraded Cephalon (NASDAQ: CEPH) to Market Outperform from Strong Buy citing uninspiring Q3 revenue growth.
Friedman Billings downgraded Limelight Networks (NASDAQ: LLNW) to Market Perform from Outperform citing the tough pricing environment, competition, and upcoming IPO lockup expiration on 12/5.
The firm also downgraded shares of Financial Federal (NYSE: FIF) to Underperform from Market Perform, as they expect the company to be impacted substantially from the slowing economy.
According to the Wall Street Journal's (subscription required) "Heard on the Street" column, content firms such as Akamai Technologies (NASDAQ: AKAM) and Limelight Networks (NASDAQ: LLNW) are getting hammered, and there appears to be no letup in sight because while online traffic is up 60% a year over the last few years, those firm's shares are expensive and, says S&P's Scott Kessler, "There's plenty more room for [Akamai and Limelight] to fall."
TiVo (NASDAQ: TIVO) is looking at a new revenue source -- being paid to give out market research to advertisers, reported the Wall Street Journal. The company plans to announce today that it will add demographic data, including age, income, marital status and ethnicity, about its viewers.
The Financial Times (subscription required) reported that Ford (NYSE: F) is likely to have to pay any buyer of its Jaguar and Land Rover units because of a $2B pension deficit, according to people close to the situation.
OTHER PAPERS:
The New York Times reported that Con Edison (NYSE: ED) was fined $18M for service disruptions in 2006, including the nine-day blackout in western Queens, NY.
The Associated Press reported that Baidu (NASDAQ: BIDU) is considering listing on the Hong Kong and mainland China stock markets, according to the company's CEO.
Shares in video software company DIVX Inc. (NASDAQ: DIVX) are up about 17% before the open on strong earnings. Stock in Chinese company Xinhua Finance Media Ltd. (NASDAQ: XFML) is 12% higher on news that it will gain SOX compliance with the SEC.
Momenta Pharma (NASDAQ: MNTA) is off over 50% on news that the FDA rejected its generic blood thinner. And shares of content delivery company Limelight Networks (NASDAQ: LLNW) are down 9% on weak guidance for the fourth quarter.
Douglas A. McIntyre is an editor at 247wallst.com.
The effective Internet delivery of "rich" media content takes high-level skills and corporations are increasingly turning the matter over to specialists. These is an outfit in Tempe, Arizona that has the expertise and the sort of big-name clients it attracts.
Limelight Networks (NASDAQ: LLNW) is a high-performance content delivery network for digital media, providing global solutions for on-demand and live Internet distribution of video, music, games, software and social media. The company supports both download and streaming delivery in such formats as Adobe Flash, MP3 audio, QuickTime, RealNetworks RealPlayer and Windows Media. Clients include Microsoft (NASDAQ: MSFT) Xbox Live, Sony (NYSE: SNE) Playstation 3, Amazon (NASDAQ: AMZN) Unbox and Facebook. The firm went public on June 8 of this year.
MOST NOTEWORTHY: News Corp, Limelight Networks, Corning and Carmike Cinemas were today's noteworthy initiations:
RBC Capital is positive on News Corporation's (NYSE: NWS) strategy of investing cash flow away from mature enterprises to fund high-growth initiatives such as Sky Italia and Fox Interactive Media. The firm initiated shares with an Outperform rating and $26 target.
Kaufman Brothers rates Limelight Networks Inc (NASDAQ: LLNW) a Sell based on a significant increase in the competitive environment with Akamai discounting on large deals, Level 3 Communications Inc (NASDAQ: LVLT) introducing a competitive offering in November 2007, Korean major-CD Networks becoming aggressive, and new entrants becoming aggressive with their value propositions.
Deutsche Bank initiated Corning Inc (NYSE: GLW) with a Buy rating and $31 target as they believe shares are fundamentally undervalued given the company's strong fundamentals and promising outlook.
Carmike Cinemas Inc (NASDAQ: CKEC) was started at JP Morgan with an Overweight rating. The firm said the company is the most exposed to 3-D, which could lead to potential upside due to low margins and leverage capital structure.
OTHER INITIATIONS:
UBS started shares of St. Jude Medical Inc (NYSE: STJ) with a Sell rating and $43 target and shares of Medtronic Inc (NYSE: MDT) with a Buy rating and $64 target.
Analyst upgrades:
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With the credit crunch, it seems that private equity is losing its luster, right? Maybe not. After all, with better valuations, the opportunities may be looking good.
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