Caterpillar, Inc. (NYSE: CAT) Raised to Outperform as Bull of the Day at Zacks.
Halliburton Co. (NYSE: HAL) Reiterated Buy but lowered target to $54 at Argus.
Harmony Gold Mining Co. Ltd. (NYSE: HMY) Raised to Buy at UBS.
Home Depot Inc. (NYSE: HD) Reiterated Buy and raised price target to $51 at Argus.
Interline Brands, Inc. (NYSE: IBI) named as Value stock of the day at Zacks.
KLA-Tencor Corporation (NASDAQ: KLAC) Raised to Buy at Citigroup.
Michael Kors Holdings Limited (NYSE: KORS) Started as Overweight at Morgan Stanley; Started as Outperform at Baird; Started as Buy at Goldman Sachs.
Netflix, Inc. (NASDAQ: NFLX) Maintained Outperform with $100 target at Credit Suisse.
NII Holdings, Inc. (NASDAQ: NIHD) Cut to Underperform as Bear of the Day at Zacks.
Novellus Systems, Inc. (NASDAQ: NVLS) Raised to Buy at Citigroup.
Pan American Silver Corp. (NASDAQ: PAAS) maintained Outperform but lowered estimates at Credit Suisse.
Texas Instruments Inc. (NYSE: TXN) Reiterated Outperform and raised target to $40 at Credit Suisse; Cut to Hold at Kaufman Bros.
Union Pacific Corp. (NYSE: UNP) Reiterated Buy and raised target to $130 at Argus.
Zumiez Inc. (NASDAQ: ZUMZ) Cut to Neutral at Credit Suisse.

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JON C. OGG

To start with the worst, Frontline is down more than -88% for the year, and its median target price has dropped to $6.00 from $7.25 in late October. At today’s share price of $2.98, the potential upside is slightly more than 100%. DryShips is not much better, with a lower target price of $5.00. At today’s price of $2.37, the implied gain is nearly 111%. Neither Excel nor Diana is as bad, but neither is likely to achieve anywhere near their implied gains of 63% and 46%, respectively. The shipping business has too many ships sailing around at unprofitable day rates. Until that situation resolves itself — not likely until 2013 — anything that resembles value in the shipping business is likely a mirage.

Railroads are faring better because rail traffic is up. The Association of American Railroads reported this morning that November carload traffic on US railroads grew 4% compared with November 2010. Intermodal traffic (containers) grew by 3.7% year-over-year. The largest increase came in motor vehicle carloads, which grew by 42% compared with last year and petroleum product carloads which grew by more than 28%.

Another large gain, more than 30%, came in carloads of crushed stone, sand, and gravel. Because beach sand is the most common material used in hydraulic fracturing of oil and gas wells, it’s probably a reasonable assumption to give the drilling industry credit for the increase.

Of the four railroads, Union Pacific and Norfolk Southern have both had target price boosts since late October. Union Pacific’s median target price is $114.00, up from $110.00. At a current price of $102.70, the potential upside in UP’s stock is 11%. The company’s dividend yield of 2.4% is also tied with Norfolk Southern’s for the best in the group.

Norfolk Southern’s median target price is $85.50, up from $82.00. At a current price of $74.90, the stock has a potential upside of 14.5%. With a slightly higher implied gain and an equal dividend yield, Norfolk Southern might be the best bet among the railroads.

In trucking, J.B. Hunt’s median target price fell from $49.00 to $48.00, but that was quite likely due to two brokers dropping coverage. At today’s price of $$45.40, the potential upside for the stock is just 5.7%. The company pays a dividend yield of 1.2%.

Landstar’s median target price is $52.00, up half a dollar from late October, and again likely due to a drop in the number of brokers covering the stock. At today’s price of $45.90, the potential upside for the stock is 13.3%. Landstar pays a dividend yield of 0.5%. Earlier this week, Landstar was downgraded from ‘buy’ to ‘neutral’ at SunTrust.

Of the two trucking companies, neither has a clear edge over the other. Hunt is more fully valued, but the company reported record results in the third quarter. If Hunt can do that again, then the current target price will be left way behind. Hunt’s strength in intermodal transportation could easily make that happen.

Of all ten stocks reviewed here, Norfolk Southern may be the safest bet, but J.B. Hunt may add more significant growth potential to its relatively limited upside potential.

Paul Ausick

Transportation stocks get a lot more attention as economic bellwethers than they do as market participants. Railroads, ships, and trucks are not particularly glamorous, and the industries are so entrenched that they most resemble utility stocks.

The companies included in today’s overview are CSX Corp. (NYSE: CSX), Norfolk Southern Corp. (NYSE: NSC), Union Pacific Corp. (NYSE: UNP), Canadian Pacific Railway Ltd. (NYSE: CP), Diana Shipping Inc. (NYSE: DSX), DryShips, Inc. (NASDAQ: DRYS), Excel Maritime Carriers Ltd. (NYSE: EXM), Frontline Ltd. (NYSE: FRO), JB Hunt Transport Services Inc. (NASDAQ: JBHT), and LandStar System Inc. (NASDAQ: LSTR).

Of the ten stocks we’re looking at today, only one trades more than 10 million shares a day and most of the others trade less than 3 million.  On the surface, it would seem that all these stocks would more or less trade in parallel. In practice, though, railroads and trucking companies are faring far better than sea-borne shippers. Railroads are hauling more coal, and trucking companies are having trouble meeting demand for their services. Shippers overbuilt their fleets, and the resulting collapse in day rates has been punishing for their top and bottom lines.

Cargo traffic is closely watched at this time of year as a predictor of holiday retail sales. Typically, ocean container shipping headed to the US tips the coming strength of retail sales. This year, container shipments have been somewhat lower, and this month’s totals will really tell the tale. Rail and truck traffic has been strong though, although the shortage of available trucks is diverting more container (intermodal) traffic to the railroads.

All data from Yahoo! Finance, and share prices were collected shortly before noon today.

CSX Corp. (NYSE: CSX) has a median target price of $27.00 from 24 brokers. Shares are trading today at $22.66, for an implied gain of $4.34, or 19%. CSX’s forward P/E is 11.73 and the company pays a dividend yield of 2.3%. The stock’s 52-week trading range is $17.69-$27.06, and at today’s price that’s about 28% above its 52-week low, posted earlier this morning, and 16% below the 52-week high. CSX met analysts’ expectations when it reported third quarter earnings about 10 days ago. The company noted a 15% jump in intermodal freight revenue, although volume was essentially unchanged from the same period a year ago. CSX said at the time that it does not expect significant growth in the US, but neither does it predict a double-dip recession.

Norfolk Southern Corp. (NYSE: NSC) has a median target price of $82.00 from 23 brokers. Shares are trading today at $74.74, for an implied gain of $7.26, or 10%. Norfolk Southern’s forward P/E is 12.91 and the company pays a dividend yield of 2.5%. The stock’s 52-week trading range is $57.57-$78.40, and at today’s price that’s about 30% above its 52-week low, posted earlier this morning, and 5% below the 52-week high. Norfolk Southern hauled 23% more coal in the third quarter than it did a year ago, and its intermodal traffic volume increased by 13%. Like CSX, the company expects modest economic growth in the US going forward. The company’s implied stock price gain is about half that of CSX, but with both coal and intermodal traffic up and growing, Norfolk Southern is more likely to bust through its current target price than the other railroads we’ve looked at today.

Union Pacific Corp. (NYSE: UNP) has a median target price of $110.00 from 25 brokers. Shares are trading today at $102.35, for an implied gain of $7.65, or 7.5%. Union Pacific’s forward P/E is 13.15 and the company pays a dividend yield of 2%. The stock’s 52-week trading range is $77.73-$107.89, and at today’s price that’s about 32% above its 52-week low, posted earlier this morning, and 5% below the 52-week high. Union Pacific posted third quarter earnings a week ago, and its international intermodal shipments were down -12% year-over-year. That implies that retailers are buying less in anticipation of a slower holiday shopping season.

Just as we tried to look at the effects of a crude price of $120/barrel a couple of weeks ago, today is a good day to look at what effect a crude price of $80/barrel might have. First of all, it would be very good news for consumers who might anticipate gasoline prices around $3.25/gallon, at least briefly. And US drivers need some cheering up.

An $80/barrel price would definitely be bad for big oil companies like Exxon Mobil Corp. (NYSE: XOM), Chevron Corp. (NYSE: CVX), and ConocoPhillips Corp. (NYSE: COP). Refiners, however could do better, especially those able to get WTI crude. US refiners situated along the Gulf Coast are essentially tied to Brent prices, while refiners further from the coast can get their hands on the cheaper WTI. That allows these companies to take advantage of the crude differential to achieve more margin.

Of the refiners, Valero Energy Corp. (NYSE: VLO) is most closely tied to the Gulf Coast and higher priced crude. Marathon Petroleum Corp. (NYSE: MPC), Tesoro Corp. (NYSE: TSO), and Western Refining Inc. (NYSE: WNR) all have more plants outside the Gulf Coast region, and thus, a better chance to take advantage of wider refining margins.

Another industry that should do well with $80/barrel crude is the airlines business. United Continental Holdings, Inc. (NYSE: UAL), Delta Air Lines Inc. (NYSE: DAL), AMR Corp. (NYSE: AMR), and Southwest Airlines Co. (NYSE: LUV), among others, have been slammed by high fuel costs. Provided anyone can still afford to fly, airline fuel costs will fall and fares may follow.

Other transportation industries that use large amounts of fuel are shipping and railroads. Shipping companies like DryShips Inc. (NASDAQ: DRYS), Diana Shipping Inc. (NYSE: DSX), and Genco Shipping & Trading Ltd. (NYSE: GNK) could catch a break from lower fuel costs. Unfortunately, over-capacity in dry bulk carriers could hold down any gain that might come from cheaper fuel.

Railroads might fare better. Union Pacific Corp. (NYSE: UNP), CSX Corp. (NYSE: CSX), and Norfolk Southern Corp. (NYSE: NSC) have been moving a lot more goods these days, and lower diesel fuel costs will make these stocks among the best able to take advantage of cheaper fuel. Loads are up, rates are up, and fuel is getting cheaper. That’s a potent combination.

Other transportation winners could include FedEx Corp. (NYSE: FDX) and United Parcel Service, Inc. (NYSE: UPS), both of which are shipping more these days and have taken a hit as fuel prices were rising.

Finally, agriculture-related firms like fertilizer companies and machinery makers could get a boost from lower fuel costs. Ag companies like Archer Daniels Midland (NYSE: ADM), Potash Corp. of Saskatchewan (NYSE: POT), Mosaic Co. (NYSE: MOS), CF Industries Holdings, Inc. (NYSE: CF), and Deere & Co. (NYSE: DE) all benefit from lower fuel costs in one way or another.

Of all the companies we’ve looked at here, only FedEx, UPS, and CF Industries is showing a gain today. CF Industries raised its annual dividend today from $0.40/share to $1.60/share, on top of a blowout quarterly earnings report. CF Industries’ shares are up more than 70% in the past 12 months, and the company expects the rest of 2011 to be just as strong as the first half.

Paul Ausick

The new “8-Pack of Dividends” includes Whirlpool Corporation (NYSE: WHR) and The Home Depot, Inc. (NYSE: HD) as having pent-up U.S. demand & global consumer growth.  Two dividend  picks for the U.S. industrial renaissance are Union Pacific Corporation (NYSE: UNP) and United Technologies Corp. (NYSE: UTX).  Air Products & Chemicals Inc. (NYSE: APD) and ConocoPhillips (NYSE: COP) are two dividend picks for the run in commodities.  Lastly, the “Safe & Steady” picks were in Pepsico, Inc. (NYSE: PEP) and in Johnson & Johnson (NYSE: JNJ).

While these two tech giants were not a part of this “8-Pack,”  Hank Smith gave some interesting insight when it comes to Intel Corporation (NASDAQ: INTC) versus Microsoft Corporation NASDAQ: MSFT).  As you have likely read, Intel just raised its dividend yet again last week and is now among the highest dividend yields in technology.  He called this very shareholder friendly.  Smith maintains that the acquisition of Skype is not as much of a shareholder-friendly move as it would have been to see a significant boost to Microsoft’s dividend.  Smith noted, “If Microsoft would have opted to double its dividend and commit to a 10% to 12% dividend growth strategy rather than making a large acquisition of a questionable company, then Microsoft’s share price would be significantly higher.”

Haverford mostly handles managed accounts but a smaller Large-Cap fund it manages is Haverford Quality Growth Stock (HAVGX) fund, and its returns have been solid during the recovery when you consider the dividend aspect of this growth.  Since the early-2009 lows, this fund has jumped up nearly 85% from the bottom.

When you look at the “8-Pack of Dividends,” these all have relatively high payouts and have all increased those payouts recently.  We included the company, the approximate dividend yield, and by how much the dividend hike was in each:

• Whirlpool Corporation (NYSE: WHR) yields 2.4% and its recent payout was raised by 16%.
• The Home Depot, Inc. (NYSE: HD) yields 2.7% and its recent payout was raised by 6%.
• Union Pacific Corporation (NYSE: UNP) yields 1.8% and its recent payout was raised by 25%.
• United Technologies Corp. (NYSE: UTX) yields 2.1% and its recent payout was raised by 11%.
• Air Products & Chemicals Inc. (NYSE: APD) yields 2.5% and its recent payout was raised by 18%.
• ConocoPhillips (NYSE: COP) yields 3.5% and its recent payout was raised by 20%.
• Pepsico, Inc. (NYSE: PEP) yields 2.9% and its recent payout was raised by 7%.
• Johnson & Johnson (NYSE: JNJ) yields 3.5% and its recent payout was raised by 6%.

Mr. Smith also noted that today’s environment offers dividend investors a tremendous opportunity in dividend-growing stocks.  After 18 months to 24 months of a recovery, now companies are really moving to return more capital to shareholders.

One additional point was made as far as which companies are strong… Smith said, “About three-quarters of dividend portfolio companies actually managed to raise dividends during the recession.”  The current dividend yield for most managed accounts at Haverford today is 2.5%, but they also have a dividend value strategy that includes utilities and other dividend-paying companies with a combined portfolio yield that is closer to 3.8% today.

When we are given a large group of picks in this manner, it is almost impossible not to ask for which of the lot is the best of the best.  Haverford Investments’ Hank Smith believes that the giant recovery is becoming the mature stage of the recovery period now.  In this stage, he is more inclined to look at some of the more defensive names which have lagged many of the others in their performance.  Those two names were Pepsico, Inc. (NYSE: PEP) and Johnson & Johnson (NYSE: JNJ).

JON C. OGG

We tracked buybacks from Pfizer Inc. (NYSE: PFE), Union Pacific Corporation (NYSE: UNP), GameStop Corporation (NYSE: GME), Electronic Arts Inc. (NASDAQ: ERTS), General Dynamics Corporation (NYSE: GD), Tupperware Brands Corporation (NYSE: TUP), MedcoHealth Solutions Inc. (NYSE: MHS), Verizon Communications Inc. (NYSE: VZ), Unum Group (NYSE: UNM), Altria Inc. (NYSE: MO), AstraZeneca (NYSE: AZN), Symantec Corporation (NASDAQ: SYMC), Yum! Brands Inc. (NYSE: YUM), Quest Diagnostics Inc. (NYSE: DGX), Coach Inc. (NYSE: COH), Tiffany & Co. (NYSE: TIF), and from Intel Corporation (NASDAQ: INTC).  We have outlined some basics on each below.

Pfizer Inc. (NYSE: PFE) added to its prior buyout plan with some $5 billion this week.  Union Pacific Corporation (NYSE: UNP) announced this week that it would buy back up to 40 million shares, which comes to about $375 million or so versus a market cap of $46 billion.  GameStop Corporation (NYSE: GME) also jumped into the buyback bandwagon and authorized some $500 million for buybacks over the next year and a half.  Not bad at all for a $3 billion market cap.  Electronic Arts Inc. (NASDAQ: ERTS) committed some $600 million over an 18-month period versus a market cap of roughly $600 million.  When video game companies resort to share buybacks, does that sound like great growth?

This week came another plan from General Dynamics Corporation (NYSE: GD) after its board approved the repurchase of up to 10 million common shares.  That comes to about $750 million versus a $28 billion market cap.  Tupperware Brands Corporation (NYSE: TUP) reported this week that it was using up to $600 million to expand its prior buyback program.  That is massive in terms of scale if you consider its $3.3 billion market cap.  MedcoHealth Solutions Inc. (NYSE: MHS) added to its buyback plan and the authorization went to $3 billion.  Not bad for a $26 billion company.

Verizon Communications Inc. (NYSE: VZ) only utilized about 40% of its prior buyback plan, but this week it announced a buyback plan for up to 100 million shares.  That would come to about $3.6 billion or so versus a market cap of about $102 billion.  Unum Group (NYSE: UNM) reported with its earnings that it would buy back up to $1 billion in common stock versus a market cap of roughly $8 billion.

Late in January came announcements of $1 billion from Altria Inc. (NYSE: MO), a doubling in the total buybacks to some $4 billion from AstraZeneca (NYSE: AZN), and $1 billion from Symantec Corporation (NASDAQ: SYMC).  Even Yum! Brands Inc. (NYSE: YUM) threw in up to $750 million for buybacks over the next couple of years.  Another buyback plan in late-January came from Quest Diagnostics Inc. (NYSE: DGX) for some $750 million.

Purses, belts, wallets, and even jewelry must translate to buyback.  In late-January came buyback announcements form Coach Inc. (NYSE: COH) and Tiffany & Co. (NYSE: TIF).  Coach set $1.5 billion versus a market cap of close to $16 billion, while Tiffany & Co. said it would resume share buybacks with some $402 million remaining.

Two weeks ago came the Intel Corporation (NASDAQ: INTC) announcement of a $10 billion buyback plan versus close to a $120 billion market cap.

The irony is that we did not even tally up the few dozen that were listed in the $50 to $250 million range in the recent days and weeks.  We tallied over $30 billion by the same method for December.  The buybacks continue…

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JON C. OGG

These great leaders may be surprising on some fronts and obvious on others. Amazon.com Inc. (NASDAQ: AMZN) and Apple Inc. (NASDAQ: AAPL) are probably not surprises, but others are such as  Caterpillar Inc. (NYSE: CAT), Emerson Electric Co. (NYSE: EMR), International Business Machines Corp. (NYSE: IBM), Union Pacific Corporation (NYSE: UNP), and United Technologies Corp. (NYSE: UTX).

We took a look at these individually and offered historic data, added in some color on each, and showed what analysts till thinks of each. Initially, the target was those within a couple percent of highs and this list is well within that parameter.

Advanced Micro Devices, Inc. (NYSE: AMD) is due to report after the close of trading on Thursday and we’ll get to likely find out a lot more about Dirk Meyer’s sudden “amicable and mutual departure” from the company.  Thomson Reuters has estimates of $0.11 EPS and $1.63 billion in revenues, and next quarter estimates are $$0.07 EPS and $1.54 billion in revenues.  Even with shares under $8.00, shares were under $6.00 back in September and shares were under $7.50 as recently as the start of December.  After the CEO departure, it is safe to assume that the whispers and unofficial estimates have been lowered rather than raised.

Ford Motor Co. (NYSE: F) is due Thursday morning as the poster-child of the turnaround in the U.S. auto sector.  It is safe to assume that Alan Mulally will be in his normal great mood.  Thomson Reuters has estimates of $0.48 EPS and $30.57 billion in revenues.  What is interesting is that investors have lightened up on Wednesday as Ford is down close to 4% and back just under $18.00.  Analysts have a median price target of about $20.00 and it is going to take stellar earnings and guidance to appease some concerns over how much shares should have run up.

F5 Networks, Inc. (NASDAQ: FFIV) was one we had expected Thursday but it reported earnings after the close on Wednesday and let’s just say that the drop in the after-hours on mixed guidance is awful due to it being such a high-flying stock with gains of about 200% over the last year.  Its $11.1 billion market cap and index-adds will have F5 and its network optimization technology under a larger focus now. Thomson Reuters had estimates of $0.83 EPS and $270.34 million in revenues.

Apple Inc. (NASDAQ: AAPL) reports after the close on Tuesday and unfortunately the entire scenario has changed now that Steve Jobs is on a medical leave of absence again.  Analysts have defended the stock this morning and estimates are $5.38 EPS and $24.38 billion in revenues.  Estimates for the next quarter are $4.43 EPS and $20.62 billion in revenues.  Before the Jobs news took a bite out of the Apple, shares hit a high on Friday of $348.48 versus $322.56 at the end of December.  The 2010 gain was more than 50% but the stock had effectively been stuck in a range of $310 to $325 for most of the last quarter before the 2011 run came back.

International Business Machines Corp. (NYSE: IBM) is due after the close on Tuesday.  Big Blue’s expectations are $4.08 EPS and $28.26 billion in revenues.  For the Q1-2011 the estimates are $2.23 EPS and $23.66 billion in revenues.  In case Apple offer’s long-term guidance, the consensus estimates for all of 2011 are $12.58 EPS and $103.14 billion in revenues.  Shares hit yet another all-time high of $150.95 today versus under $140 per share back in October.  We always track the services backlog to judge future revenues and that figure stood at $134 billion at the end of its third quarter.  We’ll also be paying attention to what IBM says about currency adjustments and how much is being allocated for shares buybacks.

We have provided the expected events, added in background and price data, added in color on each where applicable, and more.

Alcoa, Inc. (NYSE: AA) kicks off earnings Monday after the close and Thomson Reuters has earnings estimates of $0.19 EPS on $5.68 billion in revenues.  Be advised that at $16.42 its 52-week range is $9.81 to $17.60 and also know that this was around $12.00 before its October earnings.

Apollo Group Inc. (NASDAQ: APOL) is also due to report earnings Monday after the close.  It finds itself between the days of former growth and regulation out the (you know what)… It cannot be a value stock even if the numbers today suggest so.  The  regulation affecting forward business throws too many variables into the mix.  Thomson Reuters has estimates of $1.35 EPS and $1.26 billion in revenues.  At $37.98, its 52-week trading range is $33,75 to $66.69.

Duke Energy Corporation (NYSE: DUK) with a $23.5+ billion market cap is reported by the WSJ to be acquiring Progress Energy Inc. (NYSE: PGN) with its $13.1 billion market cap.  The WSJ homepage notes: “Duke Energy is close to a deal to buy Progress Energy in an all-stock merger that would value its smaller rival at more than $13 billion.”

Endo Pharmaceuticals (NASDAQ: ENDP) announced late Friday night that it received a complete response letter from the FDA on the application of its new formulation of OPANA® ER designed to be crush resistant.  Endo noted that this does NOT need those additional clinical studies be conducted for approval of the NDA, but noted that it currently anticipates responding to the FDA by mid-2011 and would expect a six-month review cycle once its response is filed.  The new formulation of OPANA ER is for moderate to severe pain in patients requiring continuous, around-the-clock opioid treatment for an extended period of time.