MOST NOTEWORTHY: Applied Materials (AMAT), Southern Union (SUG), Alcatel-Lucent (ALU), Lamar (LAMR) and Trump Entertainment (TRMP) led the noteworthy upgrade list today:

• UBS upgraded shares of Applied Materials (NASDAQ: AMAT) to Buy from Neutral as they expect the company to benefit from increased capital spending by Rexchip, the joint venture of Elpida and Powerchip. After speaking to contacts, UBS believes shipments to Rexchip will total around $640M in 2007.

• Southern Union (NYSE: SUG) was upgraded to Overweight from Neutral at JP Morgan.

• Credit Suisse upgraded shares of Alcatel-Lucent (NYSE: ALU) to Outperform from Neutral on improved earnings visibility and the potential for incremental cost savings.

• SMH Capital upgraded shares of Lamar Advertising (NASDAQ: LAMR) to Buy from Neutral after the conference call indicated the run rate for digital deployment is increasing, while capex per board is declining. The firm thinks the Street may be overlooking the potential for significant earnings acceleration into 2008.

• Nollenberger upgraded shares of Trump Entertainment Resorts (NASDAQ: TRMP) to Neutral from Sell based on valuation and believes fair value is $14/share...

OTHER UPGRADES:

• SunTrust upgraded shares of American Eagle Outfitters (NYSE: AEO) to Buy from Neutral.

• Raymond James raised Steak n Shake (NYSE: SNS) to Market Perform from Underperform.

• Nvidia Corp (NASDAQ: NVDA) upgraded shares to Buy from Hold.

• Buckingham upgraded Blackrock Inc (NYSE: BLK) to Strong Buy from Neutral.

• RBC Capital upgraded US Auto Parts Network (NASDAQ: PRTS) to Outperform from Sector Perform.

• HSBC raised Chartered Semiconductor (NASDAQ: CHRT) to Neutral from Underweight.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

Want to hold a small but interesting stock that is rather thinly followed by analysts? Try Texas Roadhouse, Inc. (NASDAQ: TXRH), a casual dining steakhouse that features in-house meat cutting. Pick your own steak and watch it being cooked just for you. All the home-made bread you can eat. Throw your peanut shells on the floor. Average meal price is $14.00. Texas Roadhouse currently has 250 restaurants in 43 states, with plans to open another two dozen before the end of 2006. In addition to steaks, the menu also features beef ribs, pork and chicken. Carnivores rule here.

Texas Roadhouse went public in 2004. The stock split 2:1 on September 26, 2005. Shares have slowed a bit since then. Senior management made a presentation on September 19, 2006 at Bank of America's 36th Annual Investment Conference in San Francisco. Highlights of the presentation are: $600 million in total revenues for 2006. Income from operations is forecast to exceed $55 million (I said it was a small company). Earnings per share should be in the 39-43 cents range. Average per restaurant sales volume for 2006 is forecast at $4 million. Sames stores sales growth is modest at 2-3%.

Currently, Texas Roadhouse serves dinner during the week, but expands to include lunch as well as dinner on weekends. Restaurant stocks are notoriously fickle investment vehicles, but Texas Roadhouse compares favorably with its closest competitors, Outback Steakhouse and TGI Fridays.

TXRH closed at $13.53 on September 19, 2006, up 3 cents per share. 798,041 shares traded hands.

[Photo The Jamoker]