Analyst upgrades:

• Keefe Bruyette upgraded shares of AllianceBernstein (NYSE: AB) to Outperform from Market Perform as they find AB's risk/reward attractive given its attractive long-term business model. Wachovia upgraded Watson Pharma (NYSE: WPI) and Teva Pharma (NASDAQ: TEVA) to Outperform from Market Perform citing valuations and positive drivers for generics that include patent expirations and market share expansion.
• UBS raised Lloyds TSB Group (NYSE: LYG) to Neutral from Sell on expected pricing power following the HBOS (OTC: HBOOY) acquisition.
• Otter Tail (NASDAQ: OTTR) was upgraded to Outperform from Neutral at Baird.
• GFI Group (NASDAQ: GFIG) was upgraded at Citigroup to Hold from Sell.
• Merrill upgraded Logitech (NASDAQ: LOGI) to Neutral from Underperform.

Analyst downgrades:

• JP Morgan downgraded shares of Lloyds TSB Group to Underweight from Neutral on capital concerns and believes the HBOS acquisition is not in the best interest of shareholders.
• Stephens downgraded Universal Truckload (NASDAQ: UACL) to Equal Weight from Overweight on valuation and concerns about a slowdown in the flatbed sector. The firm's target remains $28.

MOST NOTEWORTHY: Super Micro Computer, Corning and Vertex Pharmaceuticals were today's noteworthy initiations:

• Merriman believes Super Micro Computer (NASDAQ: SMCI) is a unique value in the Data Center sector and thinks it could trade to a range of $10-$12 in the near-term. Shares were initiated with a Buy rating.
  
• Citigroup started Corning (NYSE: GLW) with a Hold rating and $23.50 target. The firm sees limited upside given the risks to LCD glass demand.
  
• Vertex Pharmaceuticals (NASDAQ: VRTX) was assumed with an Overweight rating and $57 target at Thomas Weisel, as they are positive on its telaprevir opportunity.

OTHER INITIATIONS:

• Lehman reinitiated Cablevision (NYSE: CVC) with an Equal Weight rating.
  
• Silicon Motion (NASDAQ: SIMO) was initiated at Cowen with an Outperform rating.
  
• Brinks (NYSE: BCO) was initiated with a Positive rating at Susquehanna.

The demand for digital multimedia products is growing, as consumers become increasingly fond of complex communications, entertainment and business devices. There is a firm in Taiwan with a solid reputation for the development of semiconductors that serve this market.

Silicon Motion Technology (NASDAQ: SIMO) designs, develops and markets semiconductors for the multimedia consumer electronics market. It offers mobile storage products, used in flash memory cards and USB flash drives. It also provides the multimedia system-on-chip devices used in MP3 players, personal computer cameras, personal computer notebooks and broadband multimedia phones. Mobile storage products account for about 85% of sales.

The firm surprised investors last week, when it reported Q3 EPS of 30 cents and revenues of $45.8 million. Analysts had been expecting 29 cents and $44.3 million. Management also guided FY07 EPS to $1.20-$1.30, versus consensus of $1.18. Deutsche Securities subsequently reiterated its "buy" rating on the issue and boosted its price target to $31. The share price popped on the news and then moved into a bullish "pennant" consolidation pattern. Stocks frequently exit pennants moving in the same direction they were traveling on entry. In this case, that would be to the upside.

MOST NOTEWORTHY: Advanced Micro Devices, Hancock Holding, Town Sports and Gerdau SA were today's noteworthy initiations:

• Nollenberger started shares of Advanced Micro Devices (NYSE: AMD) with a Buy rating and $18 target. The firm believes the company's issues are widely known and already baked into the valuation and feels the Barcelona ramp and performance are likely ahead of expectations and demand for the latest family of ATI graphics is solid.
• B. Riley initiated shares of Hancock Holding Company (NASDAQ: HBHC) with a Buy rating of $43 target as the firm believes a higher premium is warranted given the company's superior growth prospects and conservative management profile.
• Town Sports International Holdings (NASDAQ: CLUB) was initiated with a Sector Outperformer and a $23 target at CIBC. The firm expects shares to be driven by improving fundamentals.
• Citigroup believes Gerdau SA's (NYSE: GGB) acquisition of Chaparral was expensive and will provide near-term headwinds for the stock, starting shares off with a Hold rating.

OTHER INITIATIONS:

• UBS initiated shares of Baker Hughes Incororated (NYSE: BHI), Halliburton (NYSE: HAL) and Schlumberger Limited (NYSE: SLB) with Buy ratings and targets of $102, $52 and $121, respectively.
• BMO initiated shares of Health Care Reit (NYSE: HCN) with a Market Perform rating.
  
• Lazard initiated shares of Micron Technology (NYSE: MU), SanDisk Corporation (NASDAQ: SNDK) and Silicon Motion Technology (NASDAQ: SIMO) with Buy ratings and targets of $14, $63 and $29.

The demand for digital multimedia products has grown enormously, as consumers become increasingly enamored of complex communications, entertainment and business devices. Semiconductors power it all and there is a firm in Taiwan that ranks among the leaders in innovative chip development.

Silicon Motion Technology Corp. (ADR) (NASDAQ:SIMO) designs, develops and markets semiconductors for the multimedia consumer electronics market. It offers mobile storage products, used in flash memory cards and USB flash drives. It also provides the multimedia system-on-chip devices used in MP3 players, personal computer cameras, personal computer notebooks and broadband multimedia phones. Mobile storage products account for about 85% of sales.

The firm surprised investors last week, when it reported Q4 EPS of 32 cents and revenues of $35.6 million. Analysts had been expecting 30 cents and $33.9 million. Management also guided Q1 revenues to $28.5-$30.2 million ($25.98 million consensus) and FY07 EPS to $1.20-$1.30 ($1.09 consensus). The CEO said the company set new records for sales and net income, largely on robust demand for its controllers. He made it plain that Silicon Motion plans to roll out several new controllers, to address specific opportunities in the flash memory market. The news popped the shares out of a late January "cup" into the early February "handle" of a Cup & Handle formation. The price is now showing signs of completing the pattern with a bullish rise from the right-hand side of the "handle".

Brokers recommend the issue with two "strong buys" and five "buys." Analysts see a 28% average annual growth rate, through the next five years. The SIMO PEG ratio (0.84), Sales Growth rate (51.49%), EPS Growth rate (33.33%), Operating Margin (25.51%), Net Profit Margin (27.38%), Return on Assets (19.70%), Return on Investment (23.61%) and Return on Equity (23.63%) compare favorably with industry, sector and S&P 500 averages.

Institutional investors hold about 50% of the outstanding shares. Over the past 52 weeks, SIMO has traded between $11.50 and $21.50. A stop-loss of $18.25 looks good here.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.