Brightpoint Inc. (NASDAQ: CELL) Reiterate as Buy with a $14 price target objective at Canaccord Genuity.
Cisco Systems Inc. (NASDAQ: CSCO) Reiterated as Buy with $24 price target objective at Argus.
Deckers Outdoor Corporation (NASDAQ: DECK) Reiterated as Buy with a $122 price target objective at Canaccord Genuity.
Diamond Offshore Drilling Inc. (NYSE: DO) Started as Sell with a $70 target price objective at Goldman Sachs.
France Telecom (NYSE: FTE) Cut to Underperform and named as Bear of the Day by Zacks Investment Research.
Hatteras Financial Corporation (NYSE: HTS) Cut to Neutral at Stern Agee.
Healthways Inc. (NASDAQ: HWAY) Raised to Buy at Stifel Nicolaus.
Hercules Offshore, Inc. (NASDAQ: HERO) Started as Neutral at Goldman Sachs.
Las Vegas Sands Corp. (NYSE: LVS) Cut to Neutral at Janney Capital Markets.
Lululemon Athletica Inc. (NASDAQ: LULU) Reinitiated as Buy at Stern Agee.
Melco Crown Entertainment Ltd. (NASDAQ: MPEL) Raised to Outperform from Neutral at Credit Suisse.
NRG Energy, Inc. (NYSE: NRG) Cut to Neutral from Buy at UBS.
Philip Morris International, Inc. (NYSE: PM) Cut to Neutral from Buy at Nomura.
Schlumberger Limited (NYSE: SLB) Started as Neutral at Goldman Sachs.
Sonic Automotive, Inc. (NYSE: SAH) named as value stock of the day by Zacks Investment Research.
State Auto Financial (NASDAQ: STFC) Raised to Buy from Neutral at Janney Capital Markets.
Veolia Environnement S.A. (NYSE: VE) Cut to Hold from Buy at Deutsche Bank.
VeriSign, Inc. (NASDAQ: VRSN) Raised to Outperform and featured as the Bull of the Day by Zacks Investment Research.
Weatherford International Ltd. (NYSE: WFT) Started as Buy with a $22 price target objective at Goldman Sachs.
Yum! Brands, Inc. (NYSE: YUM) Reiterated Buy with $65 fair value target at Janney Capital Markets.

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JON C. OGG

Aker owns and operates two ultra-deepwater platforms in the North Sea and has two more on order. The new rigs will cost $900 million. Aker’s contract backlog totals just over $1 billion, and Transocean claims that the acquisition will be “immediately accretive” to earnings.

Some consolidation has already hit the drilling business, with National Oilwell Varco, Inc.’s (NYSE: NOV) recent acquisition of a privately held floating production storage and offloading firm. Other large drillers like Seadrill Ltd. (NYSE: SDRL) and Diamond Offshore Drilling, Inc. (NYSE: DO) may also be on the lookout for expansion. Possible targets include Precision Drilling Corp. (NYSE: PDS), with a market cap of around $4 billion is half the size of Diamond and about a third the size of Precision. Cal-Dive International Inc. (NYSE: DVR) with a market cap of about $292 billion could be an even more appealing target.

Other possible targets include Hercules Offshore, Inc. (NASDAQ: HERO) with a market cap of about $540 million, Vantage Drilling Co. (AMEX: VTG) with a market cap of about $420 million, Parker Drilling Co. (NYSE: PKD) with a market cap of about $700 million, and Pioneer Drilling Co. (NYSE: PDC) with a market cap of $720 million.

Precision Drilling’s trailing P/E ratio has fallen from around 58 in April to around 27 today. It’s forward P/E is down from 13.57 to 10.92 since we put the company on our list of energy value stocks.  The company operates onshore in North America and internationally, so it was largely unaffected by the moratorium in the Gulf of Mexico. Precision’s shares are up nearly 3.5% after about an hour of trading, to $14.69, in a 52-week range of $6.02-$18.18.

Cal Dive cannot put up a positive trailing P/E, and it’s forward P/E is just 7.74. It’s price/book ratio is 0.77. The company was hit by the Gulf drilling moratorium, and its business — putting real people deep underwater — is not filled with competitors. Unfortunately, many of the newest offshore fields are too deep for the company’s divers. Still, this could be a growing business offshore of Africa. Cal Dive’s shares are up more than 4.5%, to $3.13, in a 52-week range of $2.97-$8.19.

Hercules Offshore has even more troubles, with no trailing P/E and no positive forward P/E either. The price/book ratio is a mere 0.54. Revenue rose in the most recent quarter, and the company said dayrates were rising as demand increased in the US Gulf of Mexico. Hercules shares are up more than 7.5%, to $3.99, in a 52-week range of $2.05-$6.99.

Vantage Drilling’s numbers look about equal to Hercules’s. No positive P/E either trailing or forward, and a price/book ratio of 0.57. The company’s problem is long-term debt, which last quarter cost Vantage more than $25 million. Vantage shares are up more than 5.75%, to $1.47, in a 52-week range of $0.97-$2.26.

Parker Drilling’s trailing P/E is a nosebleed-level 143.84, and its forward P/E is 9.10. The stock’s price/book ration is 1.10. The company beat analysts’ expectation for earnings in the second quarter and is expected to earn $0.12/share in the current quarter, compared with just $0.01 last year. Parker’s drilling activities are either onshore or in shallow offshore waters. Parker shares are up more than 6%, to $6.11, in a 52-week range of $3.58-$7.45.

Pioneer Drilling is another onshore driller with a non-existent trailing P/E, but a forward P/E of 15.32. The price/book ratio is 1.74. Pioneer’s shares are up nearly 4%, to $13.34, in a 52-week range of $5.23-$18.00.

Paul Ausick

Arch Coal Inc. (NYSE: ACI) Raised to Buy at Brean Murray; Reiterated Buy at Argus.
Dendreon Corporation (NASDAQ: DNDN) Reiterated Buy at Needham.
Everest Re Group, Ltd. (NYSE: RE) Maintained Underperform as Bear of the Day at Zacks.
General Motors Company (NYSE: GM) Raised to Buy at UBS.
Hercules Offshore, Inc. (NASDAQ: HERO) Raised to Outperform at FBR.
JetBlue Airways Corporation (NASDAQ: JBLU) Reiterated Hold at Argus.
LM Ericsson Telephone Co. (NASDAQ: ERIC) Raised to Neutral at JPMorgan.
Pool Corporation (NASDAQ: POOL) Raised to Outperform as Bull of the Day at Zacks.
Rare Element Resources Ltd. (AMEX: REE) Started as Buy at Dahlman Rose.
U.S. Steel Corporation (NYSE: X) Reiterated Buy at Argus.
Viacom Inc. (NYSE: VIA-B) Raised to Buy at BofA/ML.
VIVUS Inc. (NASDAQ: VVUS) Reiterated Buy at Needham.
Wells Fargo & Co. Inc. (NYSE: WFC) Reiterated Sell at Argus.

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JON C. OGG

Expedia, Inc. (NASDAQ: EXPE) is up 15% on heavy volume to $25.75, relative to a 52-week range of $18.30-$29.85. The company plans to split by the third quarter into two organizations: Expedia.com and TripAdvisor.

Hercules Offshore, Inc. (NASDAQ: HERO) is down nearly 14% premarket on heavy volume to $5.50, relative to a 52-week range of $2.05-$6.99. The drilling company is now being investigated by the SEC and the Justice Department.

Seagate Technology PLC (NASDAQ: STX) is up 8% premarket to $15.83, within a 52-week range of $9.84-$20.90. The hard drive company issues 3Q guidance above expectations.

Energy Recovery, Inc. (NASDAQ: ERII) is down 8.5% on light volume to $3.15, relative to a 52-week range of $3.08-$6.77. The company was recently downgraded to “underperform” by Wedbush.

Hercules Offshore, Inc. (NASDAQ: HERO) is up 4% premarket on heavy volume to $6.07, higher than its 52-week range of $5.52-$5.89. The energy has had a great deal of momentum ahead of upcoming quarterly reports on March 9th.

Identive Group, Inc. (NASDAQ: INVE) is down 4% premarket to $3.06, relative to a 52-week range of $1.29-$3.55. This drop comes despite the fact that the company cut it 4Q losses and reported a rise in revenue.

Marvell Technology Group Ltd. (NASDAQ: MRVL) is down nearly 7% premarket on heavy volume to $17.05, relative to a 52-week range of $17.78-$18.42. The circuit-maker issued quarterly profits below market expectations.

ZST Digital Networks, Inc. (NASDAQ: ZSTN) is up 24% premarket on heavy volume to $7.32, relative to a 52-week range of $4.43-$10.38. The company announced fourth quarter and annual results, both of which exceeded expectations.

Seahawk Drilling, Inc. (NASDAQ: HAWK) is down 60% premarket to $3.16, relative to a 52-week range of $6.79-$23.07. Seahawk has filed for bankruptcy, and is selling its assets to Hero Offshore for $105 million.

Hercules Offshore, Inc. (NASDAQ: HERO) is up 21% on heavy volume to $4.40, relative to a 52-week range of $2.05-$4.86. The company buying assets of the bankrupt Seahawk Drilling, for $105 million.

Openwave Systems Inc. (NASDAQ: OPWV) is up 16% premarket to $2.46, relative to a 52-week range of $1.57-$2.90. The company recently announced a strategic partnership with Juniper Networks (NYSE: JNPR).

STEC, Inc. (NASDAQ: STEC) is up nearly 6% on moderate volume this morning to $25.12, relative to a 52-week range of $9.47-$24.38. The company recently issued Q1 guidance which exceeded analyst expectations.

Netlist (NASDAQ: NLST), Jazz Pharmaceuticals (NASDAQ: JAZZ), Hercules Offshore (NASDAQ: HERO), Clearwire (NASDAQ: CLWR), Ericsson (NASDAQ: ERIC), and DryShips (NASDAQ: DRYS)

Moving down:CNB Financial NASDAQ: CCNE), Anaren (NASDAQ: ANEN), and School Specialty (NASDAQ: SCHS).

Most active: Google Inc. (NASDAQ: GOOG), Apple Inc. (NASDAQ: AAPL), Logitech International (NASDAQ: LOGI), ARM Holdings (NASDAQ: ARMH), and THQ Inc (NASDAQ: THQI)

Douglas A. McIntyre

Today’s coverage includes Hercules OffShore (HERO), Conexant (CNXT), Vical (VICL), and Helicos BioSciences (HLCS).

Apple (AAPL) is also moving on an accounting change that could help its earnings.

Douglas A. McIntyre

Stone Energy (SGY) Posts a loss for the last quarter. Sells down to $5.30 from 52-week high of $73.96.

Celera Corp (CRA) Outlook is below estimates. Plunges to $6.76 from 52-week high of $17.56.

Hercules Offshore (HERO) Still dropping after booking large impairment. Down to $1.95 from 52-week high of $39.47.

Douglas A. McIntyre

S&P expects thatfinancial performance and credit quality will deterioratesignificantly.  It lists those exposed to land and shallow waterdrilling activity and voices concern that some players may bump upagainst covenants governing their credit facilities. 

S&P expects meaningful cuts announced in North American explorationand production in 2009 and possibly 2010.  Below are the downgrades:

Downgraded                               To                From
Allis-Chalmers Energy Inc.
Corporate credit rating        B/Negative/–     B+/Negative/–
Outlook Action                           To                From
Hercules Offshore Inc.
Corporate credit rating        BB-/Negative/–   BB-/Stable/–
Parker Drilling Co.
Corporate credit rating        B+/Stable/–      B+/Positive/–
Stewart & Stevenson LLC
Corporate credit rating        B/Stable/–       B/Positive/–
Global Geophysical Services Inc.
Corporate credit rating        B-/Negative/–    B-/Developing/–

Jon C. Ogg
February 5, 2009