Analyst upgrades:

• Credit Suisse upgraded shares of Novartis (NYSE: NVS) to Neutral from Underperform as they believe the stock's defensive characteristics justify a premium valuation.
  
• Merrill raised Dreamworks (NYSE: DWA) to Buy from Neutral and has increased confidence in DWA's sustainable success following the performance of Kung Fu Panda and new revenue streams.
  
• Anadarko Petroleum (NYSE: APC) was raised to Buy from Hold at Stanford on valuation.
  
• Goldman upgraded Smurfit-Stone (NASDAQ: SSCC) and Canadian National (NYSE: CNI) to Buy from Neutral and added International Paper (NYSE: IP) to the Conviction Buy List.
  
• Northern Trust (NASDAQ: NTRS) was upgraded to Buy from Neutral at Merrill.

• Jefferies downgraded shares of Savvis (NASDAQ: SVVS) to Hold from Buy and lowered the target to $17 from $20 to reflect decreasing visibility from economic headwinds and expectations for increased capex.
  
• Citigroup downgraded Regions Financial (NYSE: RF) to Sell from Hold as they believe fundamentals are not in-line with the current valuation following the recent rally.
  
• Merrill lowered their General Electric (NYSE: GE) estimates below consensus and downgraded shares to Neutral from Buy citing increased fundamental pressures on the company's GE Capital unit. GE's target was cut to $28 from $37.50.

• M&T Bank (NYSE: MTB) was lowered to Underperform from Neutral at Baird.
  
• Silgan Holdings (NASDAQ: SLGN) was downgraded to Neutral from Buy at Goldman Sachs.
  
• Roth Capital cut Cache (NASDAQ: CACH) to Hold from Buy.

• Jefferies initiated McCormick & Schmick's (NASDAQ: MSSR) with a Buy rating and $12 target. The firm expects stabilizing fundamentals and EPS growth in 2009 to drive multiple expansion.
  
• Jesup & Lamont believes O'Reilly Automotive's (NASDAQ: ORLY) dual-marketing strategy toward professionals and do-it-yourselfers provides a competitive advantage. Shares were assumed with a Buy rating and $36 target.
  
• Boyd Gaming (NYSE: BYD) was started with a Buy rating and $15 target at Soleil. The firm admits gaming fundamentals are weak but believes investors are ignoring the company's raw land value on the Las Vegas, which they estimate could be worth $3-$7/share.
• Oppenheimer initiated Advanced Analogic (NASDAQ: AATI) with an Outperform rating and $8 target.
  
• Newell Rubbermaid (NYSE: NWL) was assumed with a Neutral rating at SunTrust.
  
• Baird initiated SonicWALL (NASDAQ: SNWL) with an Outperform rating and $8 target.

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MOST NOTEWORTHY:

• Morgan Keegan initiated StoneMor Partners (NASDAQ: STON) with a Market Perform rating. The firm has a low level of confidence in STON's financial projections given its vulnerability to changes in state and local regulations, and financial reporting complexities.
  
• Jesup & Lamont initiated Suntech Power (NYSE: STP) with a Buy based on the company's leading position in solar PV, industry growth and polysilicon supply agreements in place.
  
• Tesoro (NYSE: TSO) was assumed with an Underweight rating at JP Morgan. The firm expects the West Coast margins to remain weak given the decline in the gasoline demand and capacity increases of the majors.

• RBC Capital initiated Agrium (NYSE: AGU) with an Outperform rating and $115 target.
  
• Merrill initiated Kohlberg Capital (NASDAQ: KCAP) with a Neutral rating.
  
• Caris started Newell Rubbermaid (NYSE: NWL) with an Average rating and $24 target.

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Before the bell: Futures down on SBUX, AMZN, despite AAPL, Ford

Dow Chemical (NYSE: DOW) reported a smaller-than-forecast 3% profit drop Thursday and said it would have a good second quarter. Higher feedstock and energy costs were blamed for the drop. The chemical giant reported earnings of 99 cents per share, beating the 94 cents estimate.

• 3M Co. (NYSE: MMM) reported a 28% drop in tits first-quarter earnings while sales rose 9% and affirmed 2008 guidance.
• Newell Rubbermaid (NYSE: NWL) reported that first-quarter net income rose 15% on 3.6% higher sales, and it cut its estimate of adjusted earnings for the year.
• Motorola (NYSE: MOT) reported a loss of $0.05 per share, excluding non-recurring items, beating estimates by 2 cents. The guidance, however, was lowered. MOT shares are down 4.7% in premarket trading.

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More infant deaths, this time not from Sudden Infant Death Syndrome (SIDS), but rather, badly-designed cribs.

According to today's reports: "About 1 million Simplicity and Graco Inc (GGG) cribs are being recalled after three children became entrapped in their cribs and died of suffocation, the Consumer Product Safety Commission said Friday. Two infants, a 6-month-old and a 9-month-old, died in the recalled cribs, which were sold through May 2007. A 1-year-old child died in a newer model of the cribs, which has not been recalled but is being investigated by the safety agency, CPSC officials said. In all three deaths, the consumer had installed the drop-rail side of the crib upside down, the CPSC said. This creates a gap in the crib that children can slide into and suffocate. Seven other infants have been entrapped in the cribs, according to the CPSC. There have been 55 reports of the cribs' drop sides detaching or the hardware failing to hold the side to the crib."

How does this happen? Why does this happen? The companies in question are not novices. Guess what...Simplicity Inc., of Reading, Pa., is listed as manufacturer of all the cribs, which were made in China. I think this is another example of an American company losing control of the process and forgetting that our product safety standards are not universal and that developing countries with rapidly expanding industrialization just don't get it.

They can get the work done cheaply and that's it. But they do not have our history or perspective and they certainly do not understand our idea of risk management, liability, and in particular, litigation. A country with a weak judicial system could never understand this. We have many checks and balances that they do not have.

Furthermore as a designer I can tell you that one of the things that we consider as an inherent part of design and risk management in a project is not only how a design might work, but also how it might fail. Where are the weaknesses, where might someone get in trouble from improper use or ignorance? The cribs should have been battle tested by having a group of parents brought into the manufacturer's labs and actually try to assemble the beds independently, with no coaching. This might have brought the design inadequacy to light and saved everyone a lot of heartache.

After all the recent recalls and problems we have witnessed with foreign manufacturing it would be nice to think the alarm bell has been sounded. However, too many people are still not paying attention. They might also be working under conditions where they are afraid to speak up about unsafe products or practices for fear of retribution, or simply because it is not in the cultural psyche to sound off or object to something. This has to change also. Unfortunately, we are probably at the early stages of this crises and it is probably unrealistic to think it is going to end soon.

[Editor's note: The quoted article misleads in that it quotes Graco Inc. (NYSE: GGG) as being responsible for Graco cribs. Graco is a brand of Newell Rubbermaid (NYSE: NWL).]

To find potential opportunities and verify my track record read Chasing Value or Serious Money.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He is on the advisory board of Internet start-up CircleBuilder.com.

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Getting and keeping brand recognition is a critical part of any business endeavor. There is an outfit in Atlanta that ranks among the best in achieving those goals. The company's product list is one of the best recognized anywhere.

Newell Rubbermaid (NYSE: NWL) manufactures and distributes a wide variety of consumer and commercial products. Offerings include a long list of well-known home and office brands, including Levolor blinds, Lenox hand tools, Sharpie pens, Rolodex record holders, Amerock cabinet hardware, DYMO label makers, Graco children's products and Rubbermaid items. Competitors include Avery Dennison (NYSE: AVY) and Fortune Brands (NYSE: FO).

The firm pleased investors earlier in the week, when it raised Q3 guidance. Management now sees EPS of 48-50 cents (45 cent consensus) and revenue growth near the high end of the previously estimated 5-7% range. Strength in the Home & Family and Tools & Hardware segments were cited in support of the adjustment. The company also boosted Y07 EPS guidance to $1.74-1.78 ($1.76 consensus).

Brokers recommend the shares with three "strong buys," three "buys" and three "holds." Recent price targets are in the mid-$30s. The NWL P/E ratio (19.63), Price to Sales ratio (1.29), Price to Book ratio (3.96), Price to Cash Flow ratio (13.64), Price to Free Cash Flow ratio (23.81) and Return on Equity (22.02%) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 84% of the outstanding shares. The stock is one of those used to calculate the S&P 500 Index. Through the past 12 months, it has traded between $24.22 and $32.19. A stop-loss of $24.95 looks good here. Note that the firm is expected to report Q3 results in late October.

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

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Investors are concerned that recent revenue growth is unsustainable and will weaken as the economy slows. However, in a report released this morning by Bank of America (NYSE: BAC), management believes the growth initiatives that have been put in place are taking hold and 3% to 5% revenue growth is doable despite the slowing macro environment. However, B of A is somewhat skeptical and maintained its Neutral rating and $28 price target.

Merrill Lynch & Co. (NYSE: MER), in a report released yesterday, wrote that investors should jump on board Newell's stock, as the correction has been overdone. Newell should earn $1.78 this year, jumping to $2.00 next year, implying price-to-earnings ratios of 14x and 12.7x for 2007 and 2008, respectively. This is cheap for a company owning such well-known franchise names as Rubbermaid, Sharpie, plus a whole host of others. Merrill has a $34 price target on Newell Rubbermaid.

Another attractive feature of Newell is its free cash flow yield, which now stands at 7.7%, compared to a 10-treasury bond of 4.5%, which should ensure limited downside risk for the stock.

It may be worth it to follow Ketchum and bottom fish in Newell Rubbermaid. The stock has over-corrected and Ketchem, who has now been on the job for a year or so, has serious marketing and product development experience from his days at Procter & Gamble Co. (NYSE: PG). A rebound to $30 per share looks likely if new product initiates can keep the top line growing 3 to 5% per year.

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Newell Rubbermaid Inc. (NYSE: NWL) recently posted decent 1Q earnings despite still being in the midst of an expensive, long-term reorganization. First the numbers. Excluding the reorganization costs, revenue was down by half from 1Q 2006 to $65 million or $.23 per share. Net sales were up 3% to $1.38 billion and net cash from continuing operations improved to $14.5 million for the quarter. Unfortunately, net cash gain was entirely negated by much larger capital expenditures that wil eventually result in reduced expenses and improved productivity, or so insists CEO Mark Ketchum.

Newell Rubbermaid has been in the midst of a turnaround for quite some time, and apparently the wait is far from over. The 1Q 2007 earnings press release is a model of how not to say what one means. Management forecasts sales growth in 2Q 2007 in the 4-5% range, with net cash to be in the range of $75-$125 million. Capital expenditures are forecast to be approximately half of net cash figures. All full year figures exclude restructuring costs, so it is difficult to guage how much progress the company is making. FY 2007 EPS are forecast at $1.73-$1.78 with net cash from continuing operations approximately $575-$625 million. The reorganization project was supposed to have saved $50 million in 2007 and $150 million total by 2009.

Investors might still want to be patient with newell Rubbermaid. The company consistently pays a dividend that yields 2.7% annually. The stock is not subject to cyclical or seasonal fluctuations, and its brands include such office basics as Paper Mate, EXPO markers, Sharpie markers, Rolodex, and, of course, Rubbermaid. The stock hasn't budged much from where it began at the beginning of 2007, but CEO Ketchum still insists that the company is building momentum. The stock recently closed at $30.86, up slightly from$29.26 where it began trading in 2007.

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• Ketchum expects organic growth to continue
• Resin costs, a big expense for Newell, should continue to moderate and begin benefiting the company
• Costs savings to continue which should lead to gross margin expansion
• Expects lower double digit operating income growth

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A WW II, P-35 pilot once said that "it's better to be lucky than good." In this case, I was lucky enough to stumble upon a company that has an excellent history of generating growth and dividend increases. Net income figures have steadily increased over the years. Graco Inc. also has a good history of buying back stock and issuing very little debt for operational purposes.

I love stocks that are boring but steady-eddies and Graco could be as boring and as steady as they come. Blogging Stocks has no mention of Graco previous to this article besides a quick blurb on a Jim Cramer article. Ratio comparisons portray Graco as a best-of-breed company among its industry peers. Return figures on assets and equity are spectacular above its peers. However, Graco Inc. cannot be considered undervalued, which makes it a curious holding in my portfolio as of this writing. I usually buy companies trading at a discount, but found Graco's historical and current financials surprisingly attractive. Especially for a company that wasn't my initial interest!

My personal portfolio/stock watch list often doesn't overlap with Blogging Stocks coverage, but I want to make clear that this is not an endorsement for you to purchase stock. The last thing I need is speculators ruining a good thing (for me). Nothing should replace your own due diligence.

What happened to my initial interest, the baby stroller company? Graco Children's Products is a subsidiary of the bigger Newell Rubbermaid company. I decided that my investment thesis to invest in baby strollers didn't warrant my investment into a more complex conglomerate.

And the point of this post? If even one person is able to gain clarity about the two different Gracos, this article will have served its purpose.

[I own Graco shares as of 11/21/2006]

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