MOST NOTEWORTHY: Time Warner Telecom, Verigy and Brinker were today's noteworthy initiations:

• Friedman Billings expects Time Warner Telecom (NASDAQ: TWTC) to post free cash flow growth above consensus expectations and believes carrier spending-concerns are overdone. The firm initiated shares with an Outperform rating and $20 target.
  
• Oppenheimer initiated Verigy (NASDAQ: VRGY) with a Perform rating and $23 target, pointing to the company's tough year over year comps as PC unit growth slows in 2008 as well as its exposure to flash memory chips.
  
• Brinker (NYSE: EAT) was assumed with a Neutral rating at Suntrust, as they expect Chili's to continue to be impacted by weak consumer spending.

OTHER INITIATIONS:

• Baird assumed Ulta Salon (NASDAQ: ULTA) with an Outperform rating and $18 target.
  
• Lions Gate (NYSE: LGF) was initiated at Jefferies with a Hold rating and $10-$11 target.
  
• Landstar System (NASDAQ: LSTR) was initiated with a Market Perform rating at Morgan Keegan.

Verigy Ltd (NASDAQ: VRGY) is a leading manufacturer of advanced test systems for the flash memory, high speed memory and system-on-a-chip segments of the semiconductor industry. Verigy's scalable systems are used by chip makers in the design validation, characterization and high volume testing of their products. An Agilent Technologies (NYSE: A) spin-off in 2006, the firm traces its roots back to Hewlett-Packard (NYSE: HPQ).

The company surprised the Street earlier in the week, when it reported fiscal Q4 EPS of 58 cents and revenues of $209 million. Analysts had been expecting 50 cents and $200 million. Management also guided Q1 EPS to 49-54 cents (38 cent consensus) and Q1 revenues to $195-205 million ($180.27M consensus). Stifel Nicolaus subsequently boosted its recommendation to "buy" and declared a $32 price target.

The semiconductor industry is one of the most competitive anywhere and efficient product testing is an essential part of the manufacturing process. One of the recognized leaders in the art of making reliable test equipment is headquartered in Singapore.

Verigy Ltd (NASDAQ: VRGY) is a leading manufacturer of advanced test systems for the flash memory, high speed memory and system-on-a-chip segments of the semiconductor market. Verigy's scalable systems are used by chip makers in the design validation, characterization and high volume testing of their products. An Agilent Technologies (NYSE: A) spin-off in 2006, the firm traces its roots back to Hewlett-Packard (NYSE: HPQ).

The company surprised the Street late last month, when it reported Q2 EPS of 40 cents and revenues of $183 million. Analysts had been expecting 35 cents and $176.2 million. Management also guided Q3 EPS to 45-50 cents (39 cent consensus) and Q3 revenues to $195-$205 million ($173.56M consensus). Banc of America Securities subsequently reiterated its "buy" recommendation and boosted its price target to $34. VRGY shares popped on the news and subsequently moved into a bullish "flag" consolidation pattern. Prices frequently exit flags moving in the same direction they were traveling when they entered them. In this case, that would be to the upside.

Altogether, brokers recommend the issue with two "strong buys," four "buys" and one "hold." Analysts see a 32% growth rate through the next five years. The stock's Price to Sales ratio (2.25), Price to Book ratio (3.93), EPS Growth rate (-0.22 to 0.40 yr/yr), Return on Assets (12.56%), Return on Investment (21.45%) and Return on Equity (23.54%) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 77% of the outstanding shares. Over the past 52 weeks the stock has traded between $13.55 and $30.00. A stop-loss of $25.30 looks good here.

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

MOST NOTEWORTHY: Delta Air Lines (DAL), Diana Shipping Inc (DSX), Adobe Systems Inc (ADBE), Eagle Materials, Inc (EXP), ACR Group (BRR) and Autodesk, Inc (ADSK) were today's noteworthy initiations:

• Goldman is positive on Delta Air Lines (NYSE: DAL), starting shares with a Buy rating and $25 target based on above average growth, best-in-class unit costs, free cash flow and less labor cost risk.

• Diana Shipping (NYSE: DSX) was started at JP Morgan with an Overweight rating based on valuation and positioning. Lazard started Diana with a Buy rating, expecting demand for dry bulk shipping will outperform supply through 2010.

• Soleil expects Adobe Systems (NASDAQ: ADBE) recently released Creative Suite 3 to be the near-and-medium term growth driver and started shares with a Buy rating.

• JP Morgan started Eagle Materials Inc (NYSE: EXP) with an Underweight rating, expecting a decline in wallboard industry profitability due to increased capacity and lower demand.

• B. Riley started ACR Group (AMEX: BRR) with a Buy rating calling the stock "cheap."

• Soleil believes a catch up on the Autodesk's (NASDAQ: ADSK) SEC filings and a strong Q1 will prove near-term catalysts and started shares off with a Buy rating and $56 target.

OTHER INITIATIONS:

• Merrill Lynch started Super Micro Computer, Inc (NASDAQ: SMCI) and Capital Product Partners LP (NASDAQ: CPLP) with Buy ratings.

• Banc of American started Verigy Ltd (NASDAQ: VRGY) with a Buy rating and $32 target.

• Stephens initiated Kaman Corp (NASDAQ: KAMN) with an Overweight rating and $34 target.

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