Benzinga's Upgrade Summary for June 20, 2012
Listed below are today's Top Upgrades covered by Benzinga:
Goldman Sachs comments, "We are not positive on the stock and do not see significant upside potential, as we think current levels already discount expectations for better margins and a flat top line. But we also see limited downside as the Navy is emerging as the winner in DoD budget deliberations, expectations are still generally low, and the potential to implement new capital deployment strategies looms as a catalyst. Since adding HII to the Sell List on 9/28/11, it is up +58% vs. the S&P 500 up +17%, as the Navy plan and HII margins have both proved better than expected. Over the past 12 months HII is +8% vs. the S&P +6%."
Canaccord went on to say “Mitel is positioned well with its focused product portfolio to address the needs of its target SMB and enterprise customers (100 – 2500 users). Mitel does well in best of breed solutions and has won several competitive bake-offs with competitors based on its strengths in mobile and virtualized UC offerings. Shoretel products are more hardware centric and they lack a virtualized UC offering. Cisco is more focused on larger enterprises (5000+ users) and prefers to sell a complete telephony, video conferencing, and UC solution. Mitel has benefited from Avaya channel partner turnover. Avaya's channel partners were disgruntled with Avaya discontinuing the popular Nortel BCS product offering and with Avaya restricting channel partners from participating in the more profitable services sales.”
Goldman Sachs Notes, “We have upgraded Tesoro shares to Neutral from Sell, with the shares now showing 21% upside to our $27 six- month target price following recent underperformance. Since being added to the Sell List on September 8, 2011, Tesoro share are -2.9% versus +14.5% for the S&P 500 and -1.7% for the XLE. Over the last 12 months, Tesoro shares are +13.3% versus +6.8% for the S&P 500.”
Goldman Sachs comments, “Marathon shares are trading near our estimated low-end trading value, making risk/reward quite favorable given its high exposure to our bullish MidCon view. While from a capacity standpoint, the company is exposed to both the Mid-Continent and Gulf Coast regions, we have treated Marathon as an effective MidCon pure-play as its returns on capital have cycled more closely with MidCon pure-plays than diversified peers like Valero. We view positively Marathon's growing “social contract” with investors to return excess cash given dividend increases and a stock buyback program announced earlier this year. We continue to have a positive view of Marathon's management team and integrated, high-quality asset base.”
Bank of America notes, "We view NVE as a de-risked investment vehicle, offering in-line earnings growth and yield, with 10% annual dividend growth (well above peer group growth of 3-4%) and positive free cash flow. NVE recently increased its dividend 31% and now yields 3.9%, close to the regulated average of 4.1%, but continues to trade at about an 8% discount. We are upgrading to Buy and raising our PO to $19, which implies a 13% total potential return."
All of Benzinga's Upgrade coverage can be viewed here.
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