Canadian banks are scheduled to step into the earnings spotlight this week, with third-quarter reports coming from Bank of Montreal (NYSE: BMO), Bank of Nova Scotia (NYSE: BNS), Canadian Imperial Bank of Commerce (NYSE: CM), Royal Bank of Canada (NYSE: RY), and Toronto-Dominion Bank (NYSE: TD). While Canadian banks on the whole held up better than their U.S. counterparts during the financial crisis, these five are expected to report that their earnings are still declining in the most recent quarter.

Analysts surveyed by Thomson Reuters are looking for EPS for these banks to have fallen from 15% to 25% from a year ago. Their long-term EPS growth forecast is for between 10% and 12%, which is in the same range as U.S. rivals JPMorgan Chase & Co. (NYSE: JPM) and Wells Fargo & Co. (NYSE: WFC), but better than Bank of America Corp. (NYSE: BAC) and Citigroup Inc. (NYSE: C). Earnings multiples for these Canadian banks are 10x to 12x, but none of them have a First Call consensus recommendation is to buy. The Motley Fool, though, considers TD as a value stock and RY a stock poised to pop. All of them are trading much closer to their 52-week highs than lows, and shares of all are up more than 100% since March lows.

Tuesday Morning Corporation (NASDAQ: TUES) is a closeout retailer of home items in the United States. With the stock down nearly 70% year-to-date, I'd bet that value investors are starting to do their due diligence on this company. I, too, have done my due diligence and I've come to a conclusion rather quickly: stay away, at least for the time being.

There's an old saying on Wall Street: don't try and catch a falling knife. This simply means don't try to buy a stock making new lows before it begins showing some strength. I've tried to catch a falling knife before in The Bon-Ton Stores, Inc. (NASDAQ: BONT) here and it ended up humbling me, to say the least. I think that Tuesday Morning is a falling knife and you, the investor, should avoid being the cutting board into which this knife stabs.

Tuesday Morning revised its outlook yesterday and it wasn't pretty. Before this cut, analysts and management were expecting roughly 85 cents per share in earnings for the year; however, management brought its expectations down to about 60 cents per share on greatly-reduced sales estimations.

MOST NOTEWORTHY: WellCare Health, Beacon Power, Tuesday Morning, West Pharmaceutical Services and Vectren were today's noteworthy upgrades:

• Jefferies upgraded shares of WellCare Health (NYSE: WCG) to Buy from Hold, as they believe the investigation could most likely result in fines as opposed to the loss of contracts with the company's government customers.
  
• Merriman raised its rating on Beacon Power (NASDAQ: BCON) to Buy from Neutral, as they believe the company is well-positioned for significant penetration of the growing frequency regulation markets.
  
• Piper upgraded shares of Tuesday Morning (NASDAQ: TUES) to Outperform from Market Perform as they believe the company's sales and margins trends are stabilizing.
  
• UBS upgraded West Pharmaceutical Services (NYSE: WST) to Buy from Neutral on valuation.
  
• Citigroup upgraded shares of Vectren (NYSE: VVC) to Buy from Hold, as they believe 2008 will be an inflection point with the share issuance and rate relief aiding earnings.

OTHER UPGRADES:

• Goldman added Roche (OTC: RHHBY) to its Conviction Buy List.
  
• Zumiez (NASDAQ: ZUMZ) was upgraded to Buy from Hold at McAdams, Wright.
  
• Thomas Weisel upgraded MasterCard (NYSE: MA) to Market Weight from Underweight.
  
• UBS upgraded Arcelor Mittal (NYSE: MT) to Buy from Hold.

Tuesday Morning Corp. (NASDAQ:TUES) is a closeout retailer of decorative home accessories and gifts, operating from 795 stores in 47 states during periodic "sale events." The company is able to offer brand name merchandise at steep discounts, by selling from low-rent locations and using seasonal help.

Tuesday Morning surprised investors last week, when it said it expected fourth quarter EPS of 53-56 cents and revenues of $321.3 million. Analysts had been looking for 50 cents and $318.85 million. The CEO noted that the firm "ended the year with a significant cash position, zero debt and substantial operating income." Shares popped through 30-day and 50-day moving average resistance on the news and are now consolidating the gain in a bullish "flag" pattern. Equities frequently exit flags moving in the same direction they were traveling when they entered them. In this case, that would be to the upside.

Brokers recommend the issue with three "strong buys," ten "holds" and three "sells." The TUES P/E ratio (15.34), PEG ratio (1.10), Price to Sales ratio (0.79), Price to Book ratio (3.35), Price to Cash Flow ratio (11.40), Return on Assets (11.67%), Return on Investment (17.90%) and Return on Equity (23.09%) compare favorably with industry, sector and S&P 500 averages.

The stock is one of those used to calculate the S&P 600 SmallCap Index. Over the past twelve months, it has traded between $12 and $23.96. A stop-loss of $15.25 looks good here. Note that the company is expected to report fourth quarter results on February 27th, before the opening bell.

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