We also want to call out some of the other mergers and acquisitions announced this morning. Mattel Inc. (NYSE: MAT) acquired HIT Entertainment for $680 million. J.M. Smucker Co. (NYSE: SJM) is paying $350 million for the food service coffee and tea business of Sara Lee Corp. (NYSE: SLE). Today’s biggest deal has insurance company CIGNA Corp. (NYSE: CI) paying $3.8 billion for HealthSpring Inc. (NYSE: HS) as the insurance industry keeps on consolidating.

Here are today’s big post-earnings news reactions with prices during the last half-hour of trading: Caterpillar’s shares are up nearly 5%, at $91.66; Eaton Corp. (NYSE: ETN) up about 4.5%, at $44.12; Lorillard, Inc. (NYSE: LO) down less than -0.5%, at $115.16 after missing EPS estimates this morning; Metro Bancorp, Inc. (NASDAQ: METR) down nearly -8% after posting an EPS loss of -$0.41; Netflix Inc. (NASDAQ: NFLX) up more than 1.5% in anticipation of the company’s earnings release after the bell today; and Texas Instruments Inc. (NYSE: TXN) up more than 3.6% on expected earnings after today’s markets close.

Several other standouts from today are as follows…

Adolor Corp. (NASDAQ: ADLR) is up about 132%, at $4.49, on news of its acquisition by Cubist Pharmaceuticals, Inc. (NASDAQ: CBST) for $190 million, or $4.25/share. Adolor’s 52-week trading range is $1.09-$4.53, and the high was set today, anticipating that the company will hit milestones in the acquisition offer that could add up to $35 million to the purchase price.

Sky-mobi Ltd. (NASDAQ: MOBI) is up 42%, at $5.55, on a strategic partnership with SINA Corp. (NASDAQ: SINA). Sky-mobi’s Maopao mobile social network will now be able to offer SINA’s Weibo.com microblog as a downloadable application.

Amtech Systems, Inc. (NASDAQ: ASYS) is up more than 23%, to $11.25. The company, which makes manufacturing equipment for solar makers, is getting boost from today’s rise in solar stocks.

SXC Health Solutions Corp. (NASDAQ: SXCI) is down more than -20%, at $44.98. HealthSpring, which is being acquired by CIGNA, is one of SXC’s biggest customers, accounting for about a third of the company’s sales.

Dataram Corp. (NASDAQ: DRAM) is off more than -10%, at $1.10. Spot prices for dynamic RAM continue to weaken, a trend that caused Micron Technology Inc. (NASDAQ: MU) results to tumble last quarter.

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Paul Ausick

Big 5 Sporting Goods (NASDAQ: BGFV) named Bear of the Day at Zacks.
Biogen Idec Inc. (NASDAQ: BIIB) Reiterated Buy with $115 target at Argus.
Eaton Corporation (NYSE: ETN) named as Bull of the Day at Zacks.
Hartford Financial Services Group Inc. (NYSE: HIG) Reiterated Buy but cut target to $26 at Argus.
Human Genome Sciences Inc. (NASDAQ: HGSI) Maintained Outperform but cut target to $27 at Credit Suisse.
Pandora Media, Inc. (NYSE: P) Reiterated Buy and raised target to $19 at BofA/ML.
Regeneron Pharmaceuticals, Inc. (NASDAQ: REGN) Cut to Hold at Citigroup.
Research in Motion Ltd. (NASDAQ: RIMM) Raised to Buy at Stern Agee.
rue21, Inc. (NASDAQ: RUE) Raised to Buy at BofA/ML.
Sequenom Inc. (NASDAQ: SQNM) Started as Outperform at William Blair.
VMware Inc. (NYSE: VMW) Raised to Outperform at Pacific Crest.
World Fuel Services Corporation (NYSE: INT) named Value stock of the day at Zacks.

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JON C. OGG

Alcatel-Lucent (NYSE: ALU) Cut to Sell at S&P Equity Research.
Altria Group Inc. (NYSE: MO) Raised to Buy at Stifel Nicolaus.
American International Group, Inc. (NYSE: AIG) Started as Hold at Citigroup.
Banco Bilbao Vizcaya Argentaria, S.A. (NYSE: BBVA) Cut to Hold at Citigroup.
Domino’s Pizza Inc. (NYSE: DPZ) Reiterated Buy and raised target to $33 at Argus.
Eaton Corporation (NYSE: ETN) Reiterated Buy as Value at Zacks.
EarthLink Inc. (NASDAQ: ELNK) Raised to Strong Buy at S&P Equity Research.
Fastenal Company (NASDAQ: FAST) Raised to Outperform as Bull of the Day at Zacks.
3M Co. (NYSE: MMM) Reiterated Buy with $108 target at Argus.
Morgan Stanley (NYSE: MS) Maintained Underperform as Bear of the Day at Zacks.
Royal Caribbean Cruises Ltd. (NYSE: RCL) Cut to Neutral at JPMorgan; Raised to Overweight at Barclays.
Sprint Nextel Corporation (NYSE: S) Maintained Outperform but cut target to $7 at Credit Suisse.
Starbucks Corporation (NASDAQ: SBUX) Reiterated Outperform and raised target to $48 at Credit Suisse.
Vistaprint N.V. (NASDAQ: VPRT) Cut to Perform at Oppenheimer.

You are invited to join our free daily email distribution list to hear more about analyst upgrades and downgrades, top day trader and active trader alerts, dividend trends, news on Buffett and other investment gurus, IPOs, secondary offerings, private equity, and more.

JON C. OGG

After going through our screening process, we identified shares of the following tooling and machinery companies as offering value: Actuant Corporation (NYSE: ATU); Avery Dennison Corporation (NYSE: AVY); Dover Corp. (NYSE: DOV); Eaton Corporation (NYSE: ETN); ITT Corporation (NYSE: ITT); Illinois Tool Works Inc. (NYSE: ITW); and Parker Hannifin Corporation (NYSE: PH).

All of these companies sport attractive valuations in a fairly narrow range.  Avery Dennison posts the best forward PE multiple with 10.9.  Actuant Corporation posts the highest forward PE with a 14.1 multiple.  Every one of these companies boasts an attractive return on equity (ROE) exceeding 14.5%.  Avery Dennison, Illinois Tool Works and Parker Hannifin all boast a ROE higher than 19%.  Analysts’ estimates for next-year earnings growth range from ITT’s 8% to Actuant’s 19.6%.

Market caps among these companies range from Actuant Corporation’s $1.9 billion to Illinois Tool Works’ $29.5 billion.  Price to book ratios range from Actuant’s low of 2.15 to Illinois Tool Works’ high of 2.85. Most of these have above average upside to their consensus price targets from analysts and most are off from recent highs by more than the broader market.  Except where otherwise noted our source for all financial and performance data is Finviz.

Actuant Corporation (NYSE: ATU) posts a forward PE of just under 14 and its market cap is rather small for this group at about $1.8 billion.  Even at this relatively modest level, this is the richest price to earnings multiple among these companies.  Actuant posts a price to book ratio of 2.15 to 1, best among these companies.  Analysts estimate next-year earnings growth at 19.6%, best of this lot.  With a consensus target price of $32.00 the shares have an implied upside of 18%.  Actuant’s shares recently traded at $27.00.  The 52-week price range is $17.71 to $30.41.  This one has also paid an annual dividend of $0.04 for several years in a row and that 0.1% yield is so much lower than the rest of this group that you have to wonder if a dividend policy adjustment is necessary. Shares peaked just over $35 at the peak before the recession took hold.

Avery Dennison Corporation (NYSE: AVY) boasts a forward PE of 10.9 and a return on equity (ROE) of 19.69%.  Both of these figures are first place numbers among these companies.  Analysts estimate next-year earnings growth at 19.3%, second highest among this lot.  With a consensus target price of $46.71 the shares have an implied upside of 20%.  Avery Dennison’s shares recently traded at $38.70 and the 52-week price range is $30.92 to $43.26.  This one is diversified and some of its operations might be considered more office products than the rest of its operations.  The $4 billion company in market cap offers a dividend yield of 2.6%.  More important than its 52-week range is that this one peaked around $70 back in 2000 and then again back before the great recession.

Dover Corp. (NYSE: DOV) has a 13.8 forward price to earnings multiple, second richest of this lot.  Analysts estimate next-year earnings growth at 14.3%, lowest of these companies.  With a consensus target price of $74.67 the shares have an implied upside of roughly 8.2%, the   smallest upside among these companies.   Dover’s shares recently traded at $68.20 and the 52-week price range is $41.41 to $70.15. Dover specializes in industrial products and components and it offers a lower dividend for this group of about 1.6%. Unlike some others in this group, its shares have recently hit all-time highs and this one is down only about 4% from highs.

Eaton Corporation (NYSE: ETN) posts a forward PE of 11.3, second best among these companies.  The company’s $18 billion market cap makes it second largest in this lot.  Analysts estimate next-year earnings growth at 18.6%. With a consensus target price of $60.70 the shares have an implied upside greater than 16%.  Eaton’s shares recently traded at $51.70 and the 52-week price range is $31.87 to $56.12.  Eaton is involved in power management and it makes electrical components and systems, as well as components and systems in hydraulics, aerospace, and more.  The company also sports a common stock dividend of roughly 2.6%.

ITT Corporation (NYSE: ITT): Analysts estimate next-year earnings growth at less than 8%, ranking it seventh of these seven companies.  With a consensus target price of $64.62 the shares have an implied upside of almost 10%.  ITT’s shares recently traded at $58.50.  The 52-week price range is $41.46 to $63.44.  ITT is worth $10 billion in market capitalization and pays a dividend of about 1.7% to investors.  ITT is almost a conglomerate as far as how many segments it services in equipment, tools, and machinery for water, transportation, defense, and more.  This one traded at nearly $70 per share at the peak before the recession.

Illinois Tool Works Inc. (NYSE: ITW) posts a $29.5 billion market cap, largest of these companies.  The company posts one of the better ROE numbers with a return on equity of 19.4%.  With a consensus target price of $67.36 the shares have an implied upside greater than 15%.  The company’s shares recently traded at $58.20.  The 52-week price range is $39.29 to $59.27.  ITW pays investors a dividend of roughly 2.3%.  This one is very cyclical as it is involved in industrial products and equipment in a myriad of areas.

Parker Hannifin Corporation (NYSE: PH) posts one of the better ROE numbers with a return on equity of 19.4%.  The shares’ consensus target price of $107.46 imply an upside of almost 21%, best of this lot.  Parker Hannifin’s shares recently traded at $87.75 and the 52-week price range is $54.79 to $98.99.  The maker of fluid power systems and electromechanical controls and components seems to have lost favor of late with analysts.  If it lives up to its 10% earnings growth for fiscal 2012 (June-end), then it trades at only 11.7-times forward earnings.  It has a dividend yield of about 1.7%.

Using the term “value” certainly does not imply a search for immediate gains and many cheap stocks often get cheaper until a catalyst arises.  This group of value stocks is also not really anywhere close to 52-week lows, which is often a break-down feature that certain value fund managers use in screening value candidates from time to time for bargain bin prices of beaten up stocks.

Jon Ogg and Jim Berdou

Before just considering book value, we always look for more.  We looked for companies which are still expected to have respectable earnings growth.   Analysts expect next year earnings expansion ranging from Raytheon’s 12.8% to Kennametal’s 23.5% growth.  We have also considered a consensus price target from analysts for those companies which have implied upside for investors, and this group ranges from 16% to 33% upside.  We also only consider liquid issues, and the floor for this group was average daily trading volume exceeding 750,000 shares. Except where otherwise noted, the source for all performance and financial data is Finviz.com.

Eaton Corporation (NYSE: ETN) has a price to book value of 2.1  to 1.  Eaton’s market cap is almost $17 billion, ranking it second among these companies.  Its forward PE is about 10.5, placing it in the top-tier of these companies.  With a consensus target price of $60.96 from Thomson Reuters, Eaton has an implied upside exceeding 24%.  In Thursday trading Eaton’s shares closed at $48.85 and the 52-week price range is $30.65 to $56.12.  The power management company is now larger than what we would expect as an acquisition target as its market cap is north of $16 billion, so if you like Eaton it better be for its own merits. If analysts are right, that $60.96 would be an all-time high.  Our caveat in Eaton is that a substantial portion of its “value” in equity is tied to intangible assets and goodwill.

Kennametal Inc. (NYSE: KMT) posts a 2.2 to 1 price to book value.  This is sometimes a bit high by our count, but the specialty materials and metalworking outfit is one that has the right size and the right angle for many value investors.   Its market cap is $3.3 billion, making it the smallest company discussed here.  Its forward PE is less than 12.  With a consensus target price of $48.45, Kennametal has an implied upside of 19%.  In Thursday trading Kennametal shares closed at $40.63 and the 52-week trading range is $23.75 to $43.84.

Republic Services, Inc. (NYSE: RSG) boasts a 1.5 to 1 price to book value, best among these companies.  Imagine, value in garbage.  Its market cap is almost $12 billion.  Its forward PE is slightly less than 14.5 With a consensus target price of $36.17, Republic has an implied upside of 16%.  In yesterday’s trading Republic’s shares closed at $31.1, down 0.06%.  The 52-week price range is $27.33 to $33.10.  What is interesting about Republic is that its screened criteria made this one a stock which we said was one of our Ten Stocks To Own For The Next Decade.  Its rival Waste Management, Inc. (NYSE: WM) is often in the same boat and much of the value analysis is relative between the two companies.  This was also formerly a Warren Buffett stock, but it was still a Bill Gates holding when we last looked.

Raytheon Co. (NYSE: RTN)  sports a 1.7 to 1 price to book value. Its market cap exceeds $17 billion, largest among these companies.  Its forward PE is lower than 9, ranking it first among this list of companies.  With a consensus target price of $56.41, Raytheon has an implied upside of 16%. In Thursday trading Raytheon shares closed at $48.39, down 1.49%.  The 52-week price range is $41.60 to $52.67.  This defense stock was one of our higher-yield dividend defense stocks reviewed as the fighting in Libya escalated.  The maker of the Patriot Missile system and many other defense and war technologies also carries a large amount of goodwill and the reason it has low earnings multiples is because the Department of Defense is under significant budget pressure which is not going to go away.

Stanley Black & Decker, Inc. (NYSE: SWK) posts a 1.7 to 1 price to book value, placing it in the top-tier of these companies.  We do want to make the reminder that this tool-maker for builders and carpenters (and for you around your house) is now the “newly amalgamated” Stanley and Black & Decker after the merger.  The company is also still considered by many investors to be searching for acquisitions as well.  Its market cap is almost $12 billion and it carries a forward P/E ratio of less than 12.  With a consensus target price of $86.13, Stanley Black & Decker has an implied upside of 21%. In trading yesterday the company’s shares closed at $71.06 and the 52-week trading range is $47.64 to $77.75.

Timken Co. (NYSE: TKR)  posts a 2.3 to 1 price to book value. Its market cap is less than $5 billion, ranking it one of the smaller companies listed here.  The company is part of America’s core manufacturing as it makes bearings, seals, and many other internal components for machines and machinery.  Its forward PE is slightly greater than 10, placing it in the top-tier of these companies.  With a consensus target price of $64.86, the machine tool manufacturer has an implied upside of 33%.  In Thursday trading Timken’s shares closed at $48.65, and the 52-week price range is $24.45 to $57.60.  If the target price is realized by analysts, that will mark an all-time high.

While many companies have high balances of goodwill and intangible assets, we are currently looking for value among peers.  We are not considering liquidation values and therefore are not using the analogy that “You can’t pay your rent with goodwill.”

Warren Buffett was quoted back in the 1990s saying, “Your goal as an investor should simply be to purchase, at a rational price, a part interest in an easily-understandable business whose earnings are virtually certain to be materially higher five, ten and twenty years from now.”  We don’t go along with the Buffett model of forever any longer, but you get the idea.

This is also not a value review digging through the garbage heap.  As one investment manager said at The Value Investing Congress when asked about how she starts her screens for finding value stocks, “Actually, I usually start my screens by seeing which stocks have been hitting 52-week lows for a while.”  There would not be a value category of the growth trajectory was never interrupted and if problems had not arisen.

Elsewhere in recent value picks looking for book value discounts:

• Looking for Deep Value in Basic Materials
• Banks, Tech, and Others close-to or under book value

JON C. OGG & JIM BERDOU

Aruba Networks, Inc. (NASDAQ: ARUN) Raised to Overweight at Barclays.
Career Education Corp. (NASDAQ: CECO) Raised to Market Perform at FBR.
Central Garden & Pet Co. (NASDAQ: CENT) Reiterated Outperform as Bull of the Day at Zacks.
DryShips Inc. (NASDAQ: DRYS) Raised to Buy at Goldman Sachs.
Eaton Corporation (NYSE: ETN) Reiterated Buy as Value at Zacks.
Family Dollar Stores Inc. (NYSE: FDO) Cut to Neutral at Credit Suisse.
Forest Laboratories Inc. (NYSE: FRX) Raised to Overweight at JPMorgan.
Frontline Ltd. (NYSE: FRO) Cut to Market Perform at Wells Fargo.
Melco Crown Entertainment Ltd. (NASDAQ: MPEL) Reiterated Outperform and Raised target at Credit Suisse.
Universal Display Corporation (NASDAQ: PANL) Started as Buy at Goldman Sachs.
Universal Technical Institute (NYSE: UTI) Maintained Underperform as Bear of the Day at Zacks.
Visa Inc. (NYSE: V) Reiterated Buy and raised target to $95 at Argus.

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JON C. OGG

Aetna Inc. (NYSE: AET) Started as Hold at Jefferies.
Altria Group Inc. (NYSE: MO) Cut to Hold at Citigroup.
Bed Bath & Beyond, Inc. (NASDAQ: BBBY) Started as Neutral at Robert W. Baird.
Boeing Co. (NYSE: BA) Cut to Market Perform at Bernstein.
Clearwire Corporation (NASDAQ: CLWR) Raised to Neutral at BofA/Merrill Lynch.
Eaton Corp. (NYSE: ETN) Raised to Conviction Buy List at Goldman Sachs.
Humana Inc. (NYSE: HUM) Started At Hold By Jefferies
Melco Crown Entertainment Ltd. (NASDAQ: MPEL) Raised to Buy at Daiwa.
MetLife, Inc. (NYSE: MET) Cut to Equal-weight at Morgan Stanley.
NVIDIA Corporation (NASDAQ: NVDA) Raised to Buy at Needham.
Quiksilver Inc. (NYSE: ZQK) Cut to Underperform at FBR.
Republic Services, Inc. (NYSE: RSG) Started as Outperform at William Blair.
Starwood Hotels & Resorts Worldwide Inc. (NYSE: HOT) Started as Neutral at Janney.
UnitedHealth Group, Inc. (NYSE: UNH) Started as Hold at Jefferies.
Waste Management, Inc. (NYSE: WM) Started as Outperform at William Blair.
Williams-Sonoma Inc. (NYSE: WSM) Started as Outperform at Robert W. Baird.

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JON C. OGG

Cerner Corp. (NASDAQ: CERN) Raised to Buy at Jefferies.
Concur Technologies (NASDAQ: CNQR) Raised to Buy at Jefferies.
Dr Reddy’s (NYSE: RDY) Cut to Equal-weight at Morgan Stanley
Eaton Corp (NYSE: ETN) Raised to Outperform at Wells Fargo.
Global Cash Access Holdings (NYSE: GCA) Cut to Neutral at Sterne Agee.
Human Genome Sciences (NASDAQ: HGSI) Raised to Outperform at Baird.
Linear Technology Corp. (NASDAQ: LLTC) Reiterated Buy but Raised target to $40 at Gleacher.
Owens-Illinois (NYSE: OI) Cut to Neutral at Goldman Sachs.
Pepco Holdings (NYSE: POM) Raised to Neutral at JPMorgan.
SolarWinds (NYSE: SWI) Cut to Hold at Needham; Cut to Hold at Jefferies; Goldman Sachs cut to Neutral.
Wells Fargo & Co. (NYSE: WFC) Raised to Outperform at FBR.
Xilinx (NASDAQ: XLNX) Reiterated Buy and Raised target to $33 at Gleacher.

JON C. OGG

This is certainly not A123′s first pony show for battery announcements and was part of a battery system development agreement signed with Navistar back in March.   A123 will manufacture battery systems for Navistar’s eStar electric delivery vehicle and stated that a number of vehicles have already been shipped to Federal Express (NYSE: FDX) as part of the earlier development agreement.

The company has backing from Procter & Gamble (NSE: PG) and General Electric Co. (NYSE: GE) and existing deals in place with Eaton Corp. (NYSE: ETN), Daimler AG (NYSE: DAI), and it has installs elsewhere with other partners.

Depending upon the circumstances and conditions, the battery pack allows a travel distance of close to 100 miles on pure electricity before needing a recharge.

A123 closed down 6% at $8.01 today after hitting an intra-day low of $8.00, which is the worst day since its 2009 IPO.  But after the close shares rose as much as 8% and are currently up 4.7% at $8.39 in the after-hours session.  The market cap as of today’s closing bell was $835 million.

JON C. OGG

Alcoa, Inc. (NYSE: AA) Raised to Market Perform from Underperform at BMO Capital.
American Express (NYSE: AXP) Raised to Neutral from Sell at Ladenberg Thalmann.
Amylin Pharmaceuticals (NASDAQ: AMLN) Raised to Buy at Citigroup.
Applied Materials (NASDAQ: AMAT) Raised to Outperform at Oppenheimer.
Blue Nile (NASDAQ: NILE) Started as Hold at Benchmark.
Cisco Systems (NASDAQ: CSCO) Reiterated Hold at Auriga.
Eaton Corp. (NYSE: ETN) Raised to Buy at KeyBanc.
Huntington Bancshares (NASDAQ: HBAN) Raised to Outperform at Oppenheimer.
Hershey Co. (NYSE: HSY) Reinstated as Conviction Sell at Goldman Sachs.
Johnson Controls (NYSE: JCI) Cut to Neutral at UBS.
Juniper Networks (NASDAQ: JNPR) Reiterated Sell at Auriga.
KeyCorp (NYSE: KEY) Raised to Outperform at Oppenheimer.
Lexmark International (NYSE: LXK) Raised to Overweight at Barclays.
Limited Brands (NYSE: LTD) Raised to Outperform at BMO Capital.
PNC Financial (NYSE: PNC) Raised to Outperform at Oppenheimer.
Texas Instruments (NYSE: TXN) Reiterated Sell at Auriga; yet Maintained Buy at Broadpoint AmTech.

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JON C. OGG