Shares of rural broadband and telecom provider Windstream Corp. (WIN), which I first discussed here on January 18, 2010, at a price of $10.92, have recently pulled back about 10% to $12.70. But just view that retreat as an investment opportunity, if you can tolerate the risk.

Underscoring -- WIN's shares are not for the squeamish. If you can tolerate the volatility and you're patient, though, you're likely to be rewarded with WIN.

Analyst Upgrades

• Las Vegas Sands (LVS) to outperform from neutral at Credit Suisse.
• Boston Scientific (BSX) to outperform from sector perform at RBC Capital.
• Windstream (WIN) to buy from hold at Citigroup.
• Expeditors (EXPD) to buy from neutral at UBS.
• A123 Systems (AONE) to neutral from underperform and Chesapeake Midstream (CHKM) to buy from neutral at BofA/Merrill.
• AvalonBay (AVB) to outperform from neutral and Post Properties (PPS) to neutral from underperform at Cowen.

Rural broadband and telecom provider Windstream Corp. (WIN), first discussed here on January 18, 2010, at a price of $10.92, remains in a bouncy uptrend; hence the shares are not for the squeamish. However, if you can tolerate the volatility and you're patient, you're likely to be rewarded with WIN. Here's why.

Windstream, with a presence in 16 states, will likely post a 2% to 4% revenue gain in 2011 as broadband subscriber increases offset a phone revenue decline. Windstream should also benefit from a rise in business broadband subscription as business formation increases with the U.S. economic recovery. An impressive $1 annual dividend adds to the positive story.

Analyst Upgrades

• Cisco (CSCO) to outperform from perform at Oppenheimer.
• Cognizant (CTSH) to buy from neutral at Goldman.
• Polypore (PPO) to outperform from neutral at RW Baird.
• Elan (ELN) to buy from neutral at UBS.
• Millicom (MICC) and NuStar GP Holdings (NSH) to overweight from equal weight at Morgan Stanley.
• Teekay LNG (TGP) to equal weight from underweight at Morgan Stanley.
• American Railcar (ARII) to outperform from market perform at Morgan Keegan.
• Texas Instruments (TXN) to buy from neutral at Sterne Agee.

The shares of rural broadband and telecom provider Windstream Corp. (WIN), first discussed here on January 18, 2010 at a price of $10.92, are not for those who seek capital gains that appear overnight. But if you're patient with Windstream, you will be rewarded. Here's why:

Windstream, with a presence in 16 states, will likely post at 4-6% revenue gain in 2010 as broadband subscriber increases offset a phone revenue decline. Windstream should also benefit from a rise in business broadband subscriptions as business formation increases with the U.S. economic recovery. A neat $1 annual dividend adds to the positive story.

Analyst Upgrades

• Wells Fargo believes Intuitive Surgical (ISRG) da Vinci procedures remain under penetrated and that consensus estimates are too low. The firm upgraded shares to outperform from market perform and raised its valuation range to $340 to $360.
• Cantor Fitzgerald upgraded Westamerica (WABC) to buy from hold due to the company's FDIC-assisted acquisition of Sonoma Bank and what the firm sees as Westamerica's defensive nature. The firm set a $62 target on the stock.
• Oppenheimer upgraded Corning (GLW) to outperform from perform based on valuation and the belief that downward revisions have peaked. The firm has a $20 target on the stock.
• Quality Systems (QSII) was upgraded to outperform from market perform at JMP Securities.
• OpenTable (OPEN) and Windstream (WIN) were upgraded to buy from neutral at BofA/Merrill.

Rural broadband and telecom provider Windstream Corp. (WIN), first discussed here on January 19, 2010 at a price of $10.92, has exhibited sideways action for six months, but I still view the shares as attractive. Here's why:

Look for 16-state-presence Windstream to post a 4-6% revenue gain in 2010 as broadband subscriber increases offset a phone revenue decline. Windstream should also benefit from a rise in business broadband subscription as business formation increases with the U.S. economic recovery. A nice $1 annual dividend adds to the positive story.

I first discussed rural broadband and telecom prodvider Windstream Corp. (WIN) here on January 18, 2010, at a price of $10.92. The shares have since meandered for the better part of three months, but Windstream is still attractive. Here's why:

Look for 16-state-presence Windstream to post a 3% to 5% revenue gain in 2010, led by broadband subscriber increases, offset by a phone revenue decline. Windstream should also benefit from a rise in business broadband subscriptions as business formation increases with the U.S. economic recovery. A nice $1 annual dividend adds to the positive story.

Rural broadband/telecom provider Windstream Corp. (WIN) has broken through key resistance at $10 -- i.e., its now "a contender," and I'm recommending the company's shares.

Look for 16-state-presence Windstream to post a 3-5% revenue gain in 2010, as broadband subscriber increases offset a likely phone revenue decline. Windstream should also benefit from a rise in business broadband subscriptions as business formation increases with the U.S. economic recovery.

CBOE Volatility Index (VIX) at 21.68; 10-day moving average is 20.49.

SPDR Gold Trust (GLD) overall implied volatility at 24; 26-week average is 24.

NASDAQ 100 (QQQQ) overall implied volatility at 22; 26-week average is 26.

Semiconductor Holders Trust (SMH) overall volatility at 27; 26-week average is 30.

Analyst upgrades:

• Citigroup upgraded Research in Motion (NASDAQ: RIMM) to Buy from Hold and added the stock to its Top Picks Live List. The firm believes RIMM's outlook is more secure given its unit growth trajectory and stabilizing margins. Citi raised its target on the stock to $100 from $65.
  
• Morgan Stanley upgraded Microsoft (NASDAQ: MSFT) to Overweight from Equal Weight following the company's Q3 results it believes growth is accelerating and expectations are low. The firm raised its target on the stock to $24 from $21.
  
• Deutsche Bank upgraded Huron (NYSE: HURN) to Buy from Hold as it believes bad news is already priced in and FY09 expectations are achievable. The firm keeps a $46 target on the stock.
• Credit Suisse (NYSE: CS) was upgraded to Neutral from Sell at UBS.
  
• Quicksilver (NYSE: KWK) was raised to Buy from Neutral at Banc of America/Merrill.
  
• EIG Resources (NYSE: EOG) was lifted at Goldman to Conviction Buy from Neutral.

MOST NOTEWORTHY: Arena Pharma, Windstream and StatoilHydro were today's noteworthy upgrades:

• Banc of America upgraded shares of Arena Pharma (NASDAQ:ARNA) to Buy from Neutral on valuation following the recent weakness and would-be buyers ahead of the Lorcaserin 12 month echocardiogram Data Safety Monitoring Committee review expected in March.
  
• Jefferies named Windstream (NYSE:WIN) their Tuesday Value Pick and upgraded shares to Buy from Hold, as they find the current valuation attractive and believe the company can improve operating results over the next 12 months through realization of acquisition synergies, cost cutting, top-line growth initiatives and additional M&A.
  
• Credit Suisse raised StatoilHydro (NYSE:STO) to Outperform from Neutral as they believe the company has addressed issues with growth and capital expenditure and set more conservative targets.

OTHER UPGRADES:

• JP Morgan added Applied Materials (NASDAQ:AMAT) to its Focus List.
  
• Bernstein upgraded the U.S. Life Insurance sector to Overweight from Market Weight and upgraded MetLife (MET) to Outperform from Market Perform.
  
• Citigroup upgraded M&T Bank (NYSE:MTB) to Hold from Sell.
  
• Goldman added Pride International (NYSE:PDE) to its Conviction Buy List.

Note: The Daily Option Update is provided by Stock Options Specialist Paul Foster of theflyonthewall.com.

Volatility Index S&P 500 Options-VIX up .20 to 10.22.

XM Satellite Radio Holdings Inc. (NASDAQ:XMSR) -- option implied volatility decreases after SIRI merger of equals announced. XM Satellite Radio is recently up $1.70 to $15.67. SIRI and XMSR to combine in $13 billion merger of equals. XMSR shareholders will receive 4.6 SIRI shares for each XMSR share. RBC Capital Markets says "Incremental synergies for XMSR and SIRI should be approximately $7.96/share and $1.73/share. We estimate 50%-75% probability transaction will be completed." XMSR April option implied volatility of 49 has decreased below its 26-week average of 53 according to Track Data, suggesting decreasing price risks.

Sirius Satellite Radio Inc. (NASDAQ:SIRI) -- implied volatility suggested less risk in XMSR deal. Sirius Satellite Radio is recently up .27 to $3.97. SIRI is expected to report EPS on 2/27. Bear Stearns says "The deal would need to gain regulatory approvals to be consummated -- at this point, we have yet to form an opinion on whether the deal would receive these regulatory approvals." SIRI June option implied volatility of 39 is below a level of 47 from last week according to Track Data, suggesting decreasing price risks.

Option volume leaders today were: XM Satellite Radio Holdings Inc. (NASDAQ:XMSR), Sirius Satellite Radio Inc. (NASDAQ:SIRI) Apple, Inc. (NASDAQ: AAPL) and Microsoft Corp. (NASDAQ: MSFT).

Note: The Daily Option Update is provided by Stock Options Specialist Paul Foster of theflyonthewall.com.

Volatility Index S&P 500 Options-VIX up .27 to 10.59.

New Century Financial Corp. NYSE: NEW implied volatility bid up as NEW sells off on restatement. New Century Fin'l, a real estate investment trust, providing mortgage products to borrowers nationwide, is recently down $8.72 to $21.45. New Century Fin'l announced it will have to restate operating results for the first three quarters of 2006. Merrill Lynch downgraded NEW to Sell, Jeffries lowered to Hold & Friedman Billings downgraded NEW to Underperform. NEW March option implied volatility of 69 is above its 26-week average of 42 according to Track Data, suggesting larger price risks.

H&R Block-NYSE:HRB April option implied volatility & put volume elevated on hedging. H&R Block is recently down $.30 to $24.54. Soleil said on 2/7/07 "we rate H&R Block Buy; $29 price target. We believe Block is close to entraining sale of the company (whole or in parts)." H&R Block call option volume of 2,945 contracts compares to put volume of 42,299 contracts. HRB April option implied volatility of 33 is above its 26-week average of 26 according to Track Data, suggesting larger price fluctuations.

Option volume leaders today were: Cisco-(NASDAQ-CSCO), Akamai (NASDAQ: AKAM), Bristol Meyers Squibb (NYSE: BMY) and Apple Computer (NASDAQ: AAPL).