Upgrades, Downgrades and Initiations for Monday

by: Richard Saintvilus

Updated 6-June-11




Brokerage Firm

Ratings Change

Price Target

Starbucks Corp.


BMO Capital

Mkt Perf » Outperform


W&T Offshore Inc.


BMO Capital

Underperf » MKT Perf.


MakeMyTrip Ltd.



Mkt Perf » Outperform


Arthrocare Corp.



Neutral » Positive

Boyd Gaming Corp.


JP Morgan

Underweight » Neutral

$7 » $8.50

American Eagle


Brean Murray

Sell » Hold

$40 » $45

Xueda Education


RW Baird

Neutral » Outperform


First Financial Bancorp


RW Baird

Neutral » Outperform

$21 » $19

Starbucks Coffee Co. says it now fully owns all its stores in central, southern and western China. A Starbucks spokesman said last week that the coffee giant gained ownership of roughly 100 stores in Guangdong, Hainan, Sichuan, Shaanxi, Hubei and the municipality of Chongqing that it had run for 11 years through a joint venture with Maxim's Caterers Ltd. In the deal, Maxim's acquired full ownership of about 110 Starbucks stores in Hong Kong and Macau. The change gives Starbucks full control of more than half its cafes in mainland China. Starbucks said it aims to have 1,500 stores in China by 2015.

W&T Offshore, Inc. announced last week that it has priced at par its private offering of $600 million aggregate principal amount of 8.5% senior notes due 2019. The offering is expected to close on June 10, 2011, subject to customary closing conditions. W&T Offshore intends to use the net proceeds from the Senior Notes offering to fund the purchase price of its cash tender offer for any and all 8.25% senior notes due 2014. To the extent less than all of the outstanding 2014 Notes are tendered or the Tender Offer is not consummated, W&T Offshore will use the net proceeds from the Senior Notes offering to redeem or repurchase any or all of the 2014 Notes remaining outstanding. The remaining net proceeds will be used to repay outstanding indebtedness incurred under its revolving bank credit facility that was used to fund a portion of its recent acquisition in the West Texas Permian Basin.

A new India-based study comparing investment exits in early stage technology and other kinds of companies quantifies the known--that tech start-ups fetch better returns. What it doesn't do is settle the debate on which kind of company, tech or non-tech, is a better bet in the long term. Technology start-ups in India have earned their venture capital investors average returns of 5.6 times, according to a study by IDG Ventures, an early stage tech-focused venture capital firm. Non-tech start-ups fetched returns of 3.3 times. Helion made the shift to consumer businesses after it realized the huge potential of domestic consumer demand. Prominent among its tech investments is MakeMyTrip Ltd. Its non-tech deals include HummingBird Suites (P) Ltd. and R&R Salon Pvt. Ltd.

ArthroCare Corp. a leader in developing state-of-the-art, minimally invasive surgical products, announced that it has received clearance from the U.S. Food and Drug Administration (FDA) for its Spartan™ 6.5 Needled Anchor (Spartan). The Spartan device is a preloaded threaded anchor indicated for use in fixation of soft tissue to bone, such as during a rotator cuff repair. The needled version is utilized for open repairs, whereas the non-needled version, for which FDA clearance has previously been received, is for arthroscopic repairs.

Shares in riverboat-gambling operators dropped more than the broader stock market after Illinois legislators approved a bill to grant Chicago its first casino. The decline reflected the threat that new gaming facilities may drain customers from some of the existing riverboats located in Chicago’s suburbs, said Chad Beynon, an analyst at Macquarie Capital USA Inc. “Overall that market is fairly saturated,” Beynon said. “The worst-case scenario, it’s just robbing Peter to pay Paul. If you see a shift to a different area of the city you could see a 5 to 10 percent decline at some properties.” Democratic Governor Pat Quinn called the bill “excessive” the day after the Illinois Senate passed the legislation May 31, though he stopped short of threatening a veto.

American Eagle Outfitters, Inc. operates as an apparel and accessories retailer in the United States and Canada. The company offers denim wear, sweaters, graphic T-shirts, fleece, outerwear, and accessories under the American Eagle Outfitters brand name targeting 15 to 25 year old men and women; and clothing and accessories for kids ages 2 to 10 through online under the 77kids by American Eagle brand name and for babies under the brand name little77. It also provides a collection of Dormwear, intimates, and personal care products for girls under aerie by American Eagle brand name. As of January 29, 2011, the company operated 929 American Eagle Outfitters stores, 148 aerie stand-alone stores, and 9 77kids stores. In addition, it sells merchandise through its e-commerce Web sites, including ae.com, aerie.com, and 77kids.com.

Xueda Education Group, the leading national provider of tutoring services for primary and secondary school students in China with a focus on offering personalized tutoring services, today announced that it has filed a request with the Securities and Exchange Commission (the “Commission”) to withdraw the registration statement on Form F-1 previously filed with the Commission relating to a proposed public offering by certain of the Company’s pre-IPO shareholders of its ordinary shares in the form of American depositary shares.

Cincinnati's First Financial Bank has signed an agreement to acquire all 16 Ohio retail banking offices of Wilmington-based Liberty Savings Bank. First Financial (NASDAQ:FFBC) will pay a 6.41 percent net premium on Liberty Savings' deposits, or $22.2 million, based on the deposit balance. The $6.3 billion-asset bank also agreed to buy $143.3 million in performing loans, largely made up of residential mortgages and commercial real estate loans. Liberty’s branches held $346.2 million in deposits on March 31. First Financial CEO Claude Davis said the bank will operate 70 offices from metro Cincinnati through Dayton when the deal is closed in the third quarter. The bank plans to retain the vast majority of employees from Liberty Savings the branches, but did not disclose the number of workers at the offices.




Brokerage Firm

Ratings Change

Price Target

Corcept Therapeutics



Outperform » MKT Perf




TD Newcrest

Buy » Hold

North American Energy


Raymond James

Outperform » MKT Perf

WellPoint Inc.



Add » Neutral


Lowe’s Cos.


JP Morgan

Overweight » Neutral

$29 » $26



RBC Capital

Outperform » Sec Perf

$20 » $19

Wells Fargo



Neutral » Sell

Corcept Therapeutics Incorporated, a pharmaceutical company engaged in the discovery, development and commercialization of drugs for the treatment of severe metabolic and psychiatric disorders, today announced detailed data from the Phase 3 SEISMIC study of CORLUX (mifepristone) in Cushing's Syndrome. The data demonstrated that refractory Cushing's Syndrome patients receiving CORLUX experienced significant clinical and metabolic improvements over baseline measurements.

Baytex Energy Corp., through its subsidiaries, engages in the acquisition, exploration, development, and production of petroleum and natural gas in the Western Canadian Sedimentary Basin and the United States. As of December 31, 2010, it had proved probable reserves of approximately 229 million barrels of oil equivalent. The company was formerly known as Baytex Energy Trust and changed its name to Baytex Energy Corp. in January 2011. Baytex Energy Corp. was founded in 1993 and is headquartered in Calgary, Canada.

North American Energy Partners Inc. announced results for the year and for the three months ended March 31, 2011. The company has prepared its consolidated financial statements in conformity with accounting principles generally accepted in the United States (US GAAP). All comparative financial information contained herein has been revised to reflect the Company's results as if they had been historically reported in accordance with US GAAP. Unless otherwise specified, all dollar amounts discussed are in Canadian dollars.

WellPoint, Inc., through its subsidiaries, operates as a health benefits company in the United States. It offers various network-based managed care plans to large and small employer, individual, Medicaid, and senior markets. The company manages care plans include preferred provider organizations; health maintenance organizations; point-of-service plans; traditional indemnity plans; and other hybrid plans, including consumer-driven health plans, hospital only, and limited benefit products. WellPoint also provides various managed care services comprising claims processing, underwriting, stop loss insurance, actuarial services, provider network access, medical cost management, disease management, wellness programs, and other administrative services.

Lowe's broke cleanly below the 200 day moving average last week, which was at $24.16, building on its bearish momentum. The home improvement giant has felt the heat of the housing slump and will continue to feel it into the summer. The company recently reported lower than expected earnings for the first quarter of 2011. In particular, net sales decreased 1.6%, however, management is forecasting a 4% increase in sales over the next quarter.

MetroPCS Communications, Inc., a wireless telecommunications carrier, offers wireless broadband mobile services in the United States. The company's services comprise voice services that allow customers to place voice calls to, and receive calls from, any telephone in the world, including local, domestic long distance, and international calls; data services, such as ringtones, ring back tones, games and content applications, text and multimedia messaging services, mobile Internet browsing, mobile instant messaging, location based services, social networking services, and push e-mail; and custom calling features consisting of caller ID, call waiting, three-way calling, and voicemail.

Wells Fargo Insurance Services has named Donna Sanford marketing executive for its Birmingham office and Southeast Region. In her role, Sanford will be responsible marketing large account risks and developing new and existing carrier relationships. Sanford will report to Steve Swords, vice president, regional marketing leader. “With over 30 years of industry experience, Donna is a skilled broker with large account property and casualty expertise and strong relationships,” said Ronnie Jackson, Birmingham office leader. “She will bring this extensive experience to Wells Fargo Insurance Services, supporting the region’s centralized marketing strategy to deliver consistently strong results for our customers,” added Swords.

Coverage Initiated



Brokerage Firm

Ratings Change

Price Target

Alexion Pharma





HSBC Holdings


Credit Suisse


Oasis Petroleum


BMO Capital

Market Perform


Texas Instruments





Alexion Pharmaceuticals Inc. said last week that regulators will conduct a faster review of its drug Soliris as a treatment for a rare genetic disease that causes blood clots throughout the body. The Food and Drug Administration will conduct a six-month priority review of Soliris as a treatment for atypical Hemolytic Uremic Syndrome, a disease in which blood clots appear in small blood vessels throughout the body. The clots can cause damage to the brain, heart, kidneys, and other organs. Alexion said Soliris could be available for U.S. patients with atypical Hemolytic Uremic Syndrome if it is approved.

HSBC Holdings plc provides various banking and financial products and services. Its Personal Financial Services group offers current and savings accounts, mortgages and personal loans, credit and debit cards, and payment services; wealth management services comprising insurance and investment products, and financial planning services; and consumer finance. The company’s Commercial Banking group provides overdrafts, receivables finance, term and syndicated loans, acquisition and project finance, and asset finance; payments and cash management services, including payments and collections, liquidity management, and account services; international trade products and services, such as export finance, guarantees, documentary collections, and forfeiting; and treasury services comprising foreign exchange, derivatives, and structured products.

Oasis Petroleum Inc., through its subsidiary, Oasis Petroleum LLC, engages in the acquisition and development of oil and natural gas resources primarily in the Williston Basin. The company’s properties are located primarily in the Montana and North Dakota areas of the Williston Basin. Its primary project areas include West Williston, East Nesson, and Sanish. As of December 31, 2009, the company’s estimated net proved reserves were 13.3 MMBoe. Oasis Petroleum Inc. was founded in 2007 and is based in Houston, Texas.

Texas Instruments Incorporated engages in the design and sale of semiconductors to electronics designers and manufacturers worldwide. The company’s Analog segment offers high-performance analog products comprising standard analog semiconductors, such as amplifiers, data converters, and interface semiconductors; high-volume analog and logic products; and power management semiconductors and line-powered systems. Its Embedded Processing segment includes DSPs that perform mathematical computations to process and enhance digital data; and microcontrollers, which are designed to control a set of specific tasks for electronic equipment.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.