Upgrades, Downgrades and Initiations for Friday

by: Richard Saintvilus

Updated 3-June-11




Brokerage Firm

Ratings Change

Price Target

Noble Corp.


FBR Capital

Mkt Perf » Outperform

$48 » $55

Encore Energy


RW Baird

Neutral » Outperform




Ardour Capital

Accumulate » Buy


Coca-Cola Bottling



Hold » Buy

Quiksilver Inc.


Piper Jaffray

Neutral » Overweight

$5 » $5.50

Career Education


FBR Capital

Underperf » MKT Perf.

$40 » $45

This week, Noble Corporation announced that the company will participate in the upcoming RBC Capital Markets' Global Energy & Power Conference being held in New York City,June 6 and 7, 2011. Lee M. Ahlstrom, senior vice president, Strategic Development, Noble Corporation, is scheduled to participate in a panel discussion on Tuesday, June 7, 2011, beginning at 1:35 p.m. Eastern Daylight Time. A link to the webcast of this panel discussion will be available in the "Investor Relations" section of the company's website. A replay of this event will remain available until Thursday, July 7, 2011.

Encore Energy Partners LP, together with its subsidiaries, engages in the acquisition, exploitation, and development of oil and natural gas properties. Its properties and oil and natural gas reserves are located in the Big Horn Basin in Wyoming and Montana; the Permian Basin in west Texas and New Mexico; the Williston Basin in North Dakota and Montana; and the Arkoma Basin in Arkansas and Oklahoma. As of December 31, 2009, the company’s estimated total proved reserves were 28.9 MMBbls of oil and 84.7 Bcf of natural gas. It also had 1,099 operated wells and 1,644 non-operated wells. Encore Energy Partners GP LLC serves as the general partner of Encore Energy Partners LP. The company is based in Houston, Texas.

This week, EnerSys the global leader in stored energy solutions for industrial applications, announced results for its fourth quarter of fiscal 2011, which ended on March 31, 2011. Net earnings for the fourth quarter of fiscal 2011 were $30.1 million, or $0.59 per diluted share, including an unfavorable highlighted $0.16 per share impact from $1.3 million, $1.6 million pre-tax, charge for restructuring plans, $5.3 million, $8.2 million pre-tax, for charges related to the refinancing of our prior credit facility as discussed below, $0.4 million, $0.6 million pre-tax, for costs associated with a secondary offering of the company's common stock held by certain of our stockholders and$0.9 million, $1.2 million pre-tax, for fees related to acquisition activities.

CCH, the No.2 bottler of Coca-Cola (NYSE:KO) in the world, distributes drinks including Coke, Sprite and Fanta in 27 European countries and Nigeria. Its headquarters have been in Greece since 1969 when the bottler started selling its products in the country. CCH said last month it was setting up a human resources and finance administration centre in Bulgaria. This, along with Greece's plans to tax non-alcoholic drinks later this year as part of austerity measures, prompted speculation in Greek media that the bottler could relocate its base outside the country.

Quiksilver reported solid second quarter results that were better than expected when the quarter began. Revenues of $478 million in the second quarter exceeded our plan, and were up when compared to the second quarter of 2010. Gross profit of $262 million was up 5% this quarter compared to a year ago, demonstrating that our business is performing considerably better. Gross margins expanded 160 basis points to a Q2 record, 54.8% of revenues benefited from continued improvements in U.S. retail stores and less discounting in the wholesale channel. Pro forma adjusted EBITDA was $62 million in the second quarter, in line with last year, as gross profit gains were offset by increased spend ahead of revenue generation. And finally, net debt at April 30 was $594 million, representing 2.9x pro forma adjusted EBITDA, that's down 19% over the last 12 months, reflecting the enormous progress made in improving balance sheet.

Career Education Corporation, through its subsidiaries, provides educational services primarily in the United States. The company operates schools, colleges, and universities that offer doctoral degree, masters degree, bachelors degree, and associate degrees, as well as diploma and certificate programs in various career oriented disciplines. Its academic programs include career oriented disciplines, such as business studies, visual communications and design technologies, health education, information technology, and criminal justice and education in an online, classroom, or laboratory setting; and culinary art programs in the career-oriented disciplines of culinary arts, baking and pastry arts, and hotel and restaurant management primarily in a classroom, kitchen, or online setting.




Brokerage Firm

Ratings Change

Price Target



RW Baird

Outperform » Neutral

$30 » $23

Shanda Interactive


HSBC Securities

Neutral » Underweight

$43 » $41

Exide Tech


Ardour Capital

Buy » Accumulate

$15 » $10

PSE All Shares



Buy » Hold

$37 » $36

ViewPoint Financial


Keefe Bruyette

Outperform » MKT Perf


On June 2, 2011, GlaxoSmithKline and Theravance, Inc. issued a press release announcing the results of two pivotal 6-month efficacy and safety Phase 3 studies of RELOVAIR for patients with chronic obstructive pulmonary disease. RELOVAIR is a once-daily inhaled corticosteroid /long-acting beta-agonist combination treatment, comprising fluticasone furoate and vilanterol (FF/VI), currently under development for the treatment of COPD and asthma. Members of the company's management will discuss these results on a conference call today at 8:00 a.m. Eastern Daylight Time. A copy of the press release is filed as Exhibit 99.1 to this report and is incorporated herein by reference.

This week, Shanda Interactive, a leading interactive entertainment media company in China, announced its unaudited consolidated financial results for the first quarter ended March 31, 2011. Consolidated net revenues increased 7% quarter-over-quarter and increased 25% year-over-year to RMB1,630.9 million(US$248.7 million). Shanda Games' revenues increased 9% quarter-over-quarter and increased 10% year-over-year toRMB1,252.6 million (US$191.0 million). Shanda Online's revenues increased 12% quarter-over-quarter and increased 19% year-over-year toRMB301.3 million (US$46.0 million).

On Thursday, the stock of Exide Technologies took a beating because its fourth quarter loss of $0.18 per share was way under street expectations of $0.25 per share in earnings. Yesterday's close of $7.35 per share was down 25% from the May 31 close of $9.86. While the street reacted negatively to the headline numbers, my review of the details left me with a very bullish outlook. The first key point in Exide's fourth quarter report was a $10.8 million "loss on early extinguishment of debt." This loss was an accounting entry that arose from Exide's refinancing of several debt facilities on terms that will cut its future interest expenses by roughly $5 million per year. While the street viewed the loss as a bad thing, I view it as a very positive event for future earnings.

Executives at Allstate Corp., whose stock has been virtually flat this year, told investors on Wednesday of plans they hope will improve fortunes at the struggling company. The insurer hopes to add customers at its auto-insurance unit and increase home-insurance profitability by 2013, under newly disclosed targets. But the company warned that its auto-insurance unit, which has been losing customers for three years, will cede further ground to rivals in 2011 before returning to "low-single-digit growth" in 2013. The home-insurance unit, meanwhile, is raising prices and tightening underwriting standards to improve profit margins in a line of business

ViewPoint Financial Group operates as the holding company for ViewPoint Bank, which provides financial services in Collin and Dallas Counties and surrounding communities in north Texas. The company primarily generates deposits and originates loans. Its deposit product portfolio includes checking, savings, money market, demand accounts, and certificates of deposit. The company's loan product line comprises real estate loans, such as one-to four-family residential and commercial real estate loans, commercial construction, and home equity loans; consumer loans, including new and used automobile loans, recreational vehicle loans, student loans, loans secured by savings deposits, and unsecured loans; commercial business loans, including loans to finance business working capital, commercial vehicles, and equipment, as well as lines of credit; and warehouse lending.

Coverage Initiated



Brokerage Firm

Ratings Change

Price Target



Brean Murray





Brean Murray


Electronic Arts


Brean Murray


Activision Blizzard


Brean Murray



THQ Inc. announced that THQ President and Chief Executive Officer Brian Farrell will make a presentation to the investment community in connection with the 2011 Electronic Entertainment Expo. Also presenting will be Executive Vice President, Core Games, Danny Bilson and Executive Vice President, Kids, Family and Casual Games, Martin Good. The presentation is scheduled for 5:00 p.m. Pacific on Tuesday, June 7, 2011.

Take-Two Interactive Software, Inc. publishes, develops, and distributes interactive entertainment software, hardware, and accessories worldwide. The company develops and publishes software titles for various gaming and entertainment hardware platforms, including PlayStation3 and PlayStation2 computer entertainment systems, PlayStation Portable system, Xbox 360 video game and entertainment system, and Wii and DS systems, as well as for the personal computer and games for Windows. It offers products through its wholly owned labels Rockstar Games and 2K, which publishes titles under 2K Games, 2K Sports, and 2K Play.

Electronic Arts Inc said on Friday it was launching an online games service called "Origin," which lets consumers buy and download PC games directly from the publisher online, as well as track all of their games across different platforms. The company's high-profile titles "Battlefield 3" and "FIFA 12" will be available on the service when they come out. EA said the new service will be the only way to download one of its most hotly anticipated games "Star Wars: the Old Republic" due out later this year. Given the success of upstarts like Zynga, simpler social and mobile games can no longer be ignored by E3, an event that typically has been a showcase for the industry's major players. This year, a number of the traditional game publishers are expected to make announcements about social or mobile games.

Activision Blizzard's overall video game sales jumped 20% in April, showing that the company's "Call of Duty: Black Ops," is the best-selling game of all time, and Activision's first-quarter results beat expectations. All this good news should have moved the stock price at least a little, but shares have remained flat. The stock's absolute failure to move seems to defy logic -- but if you talk to gamers, it starts to make a lot more sense. Activision is about as healthy as a company can get. According to first-quarter results, sales of both games and subscriptions increased year over year. It carries no debt and reported EPS of $0.13, beating analysts' estimates of $0.08. In the most recent quarter, free cash flow did drop from $215 million to $130 million year over year. However, for all of fiscal 2010, free cash flow rose to $1.3 billion, from $1.1 billion in the previous year. That gain should have earned the stock some investor love. So why didn't it?

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