TheStreet.com's Jim Cramer says all that money has to go somewhere, and this is a likely destination.
Clash of the ideals! Oil's down, and what can you buy when there's so much bad bank news? What can you buy when Wachovia (NYSE: WB) (Cramer's Take) is boosting reserves and Morgan Stanley (NYSE: MS)) (Cramer's Take) is still being pursued by authorities and JPMorgan (NYSE: JPM) (Cramer's Take) says July stunk and UBS (NYSE: UBS) (Cramer's Take) is so tarnished that you can't believe it was once the most conservative blue chip out there.
The answer is tech, of course!
Wait a second. Would anyone mind if we actually had a reason to buy tech beyond the Kindle, the device that made Citigroup gaga about Amazon (NASDAQ: AMZN) (Cramer's Take) -- not that you needed a device to do that.
Sure, we have pre-seasonality. Remember, you are supposed to buy tech at the end of the summer, not that anyone waits that long.
MOST NOTEWORTHY: RF Micro Devices, QLT Inc and Everest RE Group were today's noteworthy upgrades:
Jefferies upgraded RF Micro (NASDAQ:RFMD) to Buy from Hold citing strong proprietary Asian channel checks. The firm believes RF Micro is past the worst of the inventory handset correction in Asia and that the MPG business is also recovering.
RBC Capital said QLT Inc's (NASDAQ:QLTI) risk/reward has improved and expects divestment announcements to start in late Q2. The firm raised shares to Outperform from Sector Perform.
Citigroup upgraded Everest RE (NYSE:RE) to Buy from Hold citing valuation, likely buybacks, the low risk of asbestos charges and the seasonal trade ahead.
Way back in early March I highlighted 10 horrifically downtrending stocks and said not to even think about buying them until they broke their nasty trendlines to the upside.
Over the past few weeks, many have displayed solid sideways price action, but it wasn't until yesterday that the high volume breakouts occurred. I'm talking about those 50+ million shares traded, 10%+ price surges beautifully accomplished by such popular names like Sprint Nextel Corp (NYSE: S), Broadcom Corp (NASDAQ: BRCM) and Level 3 Communications Inc (NASDAQ: LVLT).
Unsurprisingly, several other stocks also showed similarly strong price action:
MOST NOTEWORTHY: RF Micro Devices, Western Digital and Boyd Gaming were today's noteworthy downgrades:
Jefferies downgraded shares of RF Micro Devices (NASDAQ: RFMD) to Hold from Buy to reflect the continued softness in the China Market after Asian channel checks suggested the March quarter will be weak.
Citigroup downgraded shares of Western Digital (NYSE: WDC) to Hold from Buy, as they believe the HDD industry is nearing a cyclical peak. They also view the likelihood of consolidation as less likely given the current conditions.
Boyd Gaming (NYSE: BYD) was lowered to Neutral from Add at Calyon following its Q4 report.
Goldman Sachs and Merrill Lynch cut 2008 earnings forecasts for JP Morgan (NYSE: JPM), according toBriefing.com. The news service also reports that Jefferies cut RF Micro (NASDAQ: RFMD) from "buy" to "hold."
Moody's Investors Service put Fannie Mae's (NYSE: FNM) "B+" bank financial strength rating on its review list for a possible downgrade, according to the AP.
Douglas A. McIntyre is an editor at 247wallst.com.
MOST NOTEWORTHY: The trucking sector, Banco Santander and StatoilHydro were today's noteworthy upgrades:
Bear upgraded the trucking sector to Market Weight from Underweight and continues to expect weak pricing but believes valuations are near a bottom. The firm raised Con-way Inc. (NYSE: CNW) and Knight Transportation (NYSE: KNX) to Peer Perform from Underperform.
WestLB upgraded shares of Banco Santander (NYSE: STD) to Buy from Add as they believe the company's diversified business would shield it from an economic slowdown in Spain.
StatoilHydro (NYSE: STO) was upgraded to Buy from Hold at Societe Generale on valuation, as they believe the company has one of the most risk/reward profiles in the industry.
OTHER UPGRADES:
Under Armour (NYSE: UA) was upgraded to Buy from Hold at Citigroup.
B. Riley upgraded Actuate (NASDAQ: ACTU) to Buy from Neutral.
Deutsche Bank raised RF Micro (NASDAQ: RFMD) to Hold from Sell.
MOST NOTEWORTHY: Genentech, HSBC Holdings, Suntech Power, SunPower and Force Protection were today's noteworthy initiations:
UBS is positive on Genentech Inc's (NYSE: DNA) leading industry franchises and potential upside from development projects and started shares with a Buy rating and $101 target.
HSBC Holdings (NYSE: HBC) was assumed with a Reduce rating at WestLB, as the firm believes subprime concerns may hold back shares in the near-term.
Jefferies initiated shares of SunTech Power Holdings (NYSE: STP) with a Buy rating and $45 target. The firm believes the company is positioned to beat 2007 and 2008 expectations by ramping manufacturing capacity and production faster than expected.
Jefferies also resumed coverage of SunPower Corporation (NASDAQ: SPWR) with a Hold rating and $90 target, citing valuation, but believes the stock's higher multiple is justified given the company's superior growth potential.
Force Protection Inc (NASDAQ: FRPT) was initiated with a Market Perform rating and Friedman Billings, as they believe near-term production expectations are too high given emerging DOD funding issues.
OTHER INITIATIONS:
Lehman started shares of Arcelor Mittal (NYSE: MT) with an Overweight rating.
MOST NOTEWORTHY: GameStop (GME), Brocade (BRCD), Tween Brands (TWB), Plantronics (PLT) and Arcelor Mittal (MT) were today's more notable upgrades:
First Albany sees upside potential in GameStop (NYSE: GME) through 2008 and upgraded shares to Strong Buy from Buy.
JMP Securities upgraded Brocade (NASDAQ: BRCD) to Market Outperform from Market Perform on valuation.
Tween Brands (NYSE: TWB) was upgraded to Buy from Sell on valuation at Matrix USA.
JMP Securities' checks indicate Altec Lansing's im600 iPod docking station/FM radio is selling better than expected, and upgraded shares of Plantronics (NYSE: PLT) to Market Outperform from Market Perform.
Merrill upgraded shares of Arcelor Mittal (NYSE: MT) to Buy from Neutral to reflect the company's inclusion in the Euro Stoxx 50 Index in September as well as the positive global carbon steel environment...
OTHER UPGRADES:
Pepsi Bottling (NYSE: PBG) was upgraded to Overweight from Neutral at HSBC.
Morgan Stanley raised RF Micro Devices (NASDAQ: RFMD) to Equal Weight from Underweight.
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: Joseph A. Bank Clothiers, Inc (JOSB), Take-Two Interactive Software, Inc (TTWO), McDonald's Corp (MCD) and RF Micro Devices (RFMD) were today's more notable upgrades:
First Albany upgraded shares of Joseph A. Bank Clothiers (NASDAQ: JOSB) to Neutral from Sell, following the Q1 upside and indications that Q2 is off to a strong start.
Kaufman Brothers raised Take-Two Interactive Software (NASDAQ: TTWO) to Hold from Sell with an $18 target following the release of Q2 results, saying they see evidence the company is stabilizing. JP Morgan also upgraded TTWO shares to Overweight from Neutral, as the company considers shares attractive ahead of the Grand Theft Auto IV launch in October.
Goldman added McDonald's Corp (NYSE: MCD) to their Americas Conviction Buy List citing expectations for upward earnings revisions.
ThinkEquity upgraded shares of RF Micro Devices (NASDAQ: RFMD) to Buy from Source of Funds based on valuation.
MOST NOTEWORTHY: Hewlett-Packard Co (HPQ), Tekay Offshore Partners LP (TOO), Auxilium Pharmaceuticals, Inc (AUXL) and Northwest Airlines Corp (NWA) were today's more noteworthy initiations:
Friedman Billings started Hewlett-Packard (NYSE: HPQ) with an Outperform rating and $53 target.
Teekay Offshore (NYSE: TOO) was initiated with a Hold rating and $30 target by Deutsche Bank based on valuation.
Banc of America noted that if approved, Auxilium Pharmaceuticals' (NASDAQ: AUXL) lead candidate, AA4500, could become a first-in-class therapy, with an over-$800M sales potential in niche markets, with no competition. Bank of America started AUXL with a Buy rating and $22 target.
Northwest Airlines (OTC: NWACQ) was initiated at Morgan Stanley with an Equal Weight rating...
MOST NOTEWORTHY: GlaxoSmithKline plc (GSK), RF Micro Devices, Inc (RFMD), BMC Software, Inc (BMC) and Tween Brands Inc (TWB) were today's noteworthy upgrades:
GlaxoSmithKline (NYSE: GSK) was upgraded to Hold from Sell at Societe General on valuation.
Jefferies upgraded shares of RF Micro Devices (NASDAQ: RFMD) to Buy from Hold and raised the target to $9.00 from $7.00 after their channel checks indicated RFMD's business has improved since its last earnings call.
Cowen raised BMC Software (NYSE: BMC) to Neutral from Underperform citing valuation and improvements in the cash flow for their upgrade.
Susquehanna upgraded Tween Brands (NYSE: TWB) to Positive from Neutral based on Justice's performance and recent buyback activity...
OTHER UPGRADES:
Lenovo Group Ltd (OTC: LNVGY) was upgraded at Credit Suisse to Neutral from Underperform; JP Morgan upgraded Lenovo to Overweight from Neutral.
Morgan Keegan upgraded Symmetricom, Inc (NASDAQ: SYMM) to Outperform from Market Perform.
Goldman upgraded CDI Corp (NYSE: CDI) to Buy from Neutral.
MOST NOTEWORTHY: RF Micro Devices, Inc (RFMD), Bristol-Myers Squibb Co (BMY), Colgate-Palmolive Co (CL), EarthLink. Inc (ELNK) and Hutchinson Technology Inc (HTCH) were today's more noteworthy upgrades:
CIBC upgraded shares of RF Micro Devices Inc (NASDAQ: RFMD) to Sector Outperformer from Sector Performer as the firm expects the company to benefit from improving late CY07 trends.
Deutsche Bank upgraded shares of Bristol-Myers Squibb Co (NYSE: BMY) as the firm believes strong Q1 results suggest sustained earnings recovery may be ahead.
AG Edwards believes Colgate's (NYSE: CL) cost cutting efforts have been paying off, creating a greater "position of strength" for the company, upgrading shares of to Buy from Hold.
Cowen raised EarthLink Inc (NASDAQ: ELNK) to Neutral from Underperform, believing downside was limited given core business cash flow.
Hutchinson Technology Inc (NASDAQ: HTCH) was upgraded to Hold from Sell at W.R. Hambrecht, believing their thesis has played out and that further risks to estimates are priced into shares at current levels...
OTHER UPGRADES:
Ciena Corp (NASDAQ: CIEN) was upgraded to Overweight from Market Weight at Thomas Wiesel, citing accelerated strength growth specific opportunities and improving sector fundamentals.
Banc of America raised shares of M&T Bank Corp (NYSE: MTB) to Neutral from Sell.
MOST NOTEWORTHY: UnitedHealth Group Inc (UNH), RF Micro Devices Inc (RFMD), UTi Worldwide Inc (UTIW) and Viacom B (VIA, VIA.B) were some of today's more notable downgrades:
UBS cut UnitedHealth Group Inc (NYSE: UNH) to Neutral from Buy citing moderating fundamentals in commercial performance and large government exposure that will make it difficult for the company to outperform its peer group.
Jefferies downgraded RF Micro Devices Inc (NASDAQ: RFMD) to Hold from Buy with a $7 target as the firm believes the company's June guidance signals a slow down of second-half fundamentals.
Stephens cut UTi Worldwide Inc (NASDAQ: UTIW) to Equal Weight from Overweight based on ongoing cost issues.
Viacom (NYSE: VIA, VIA.B) was downgraded to Sell from Hold at Sanders Morris to reflect weak ad growth at MTV, digital revenues that the firm believes are a displacement rather than accretive to the revenue base and the lawsuit against Google's (GOOG) YouTube, which the firm feels is the wrong call.
Friedman Billings downgraded shares of Maguire Properties, Inc (NYSE: MPG) to Market Perform from Outperform citing the fallout from subprime-exposed office space.
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