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"Trade the Ratings" Signals for June 4, 2012

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There were three notable analyst rating changes we paid attention to before markets opened on Monday. They produced a move from open prices that averaged above 8% in the first couple hours of trading.

Smart Balance (NASDAQ: SMBL) was upgraded from Hold to Buy at Canaccord Genuity, who raised the price target on shares from $6.50 to $8. Canaccord analysts took action following an announcement that the company would acquire Udi's Healthy Foods, the leading gluten-free brand in the US, thus solidifying a platform for growth in the arena of health foods.

SMBL opened at $6.18 and moved to $6.71 by 11:10 AM, an 8.6% move in less than two hours. The upgrade was reported on Benzinga Pro's real-time rating feed at 5:50 AM.

Inphi Corporation (NYSE: IPHI) was upgraded this morning from Neutral to Overweight at Piper Jaffray, who reiterates a $12 price target on shares. Analysts at Piper Jaffray acted as the company's valuation became attractive two times cash of $4 per share, on top of some encouraging fundamental color reinforcing positive outlook for growth in 2H12.

IPHI opened at $8.72 and reached $9.71 by 11:14 AM, a gain of 10.2%. The upgrade was reported at 5:52 AM on Benzinga Pro.

Audience (NASDAQ: ADNC) was initiated with an Overweight rating and a price target of $23 per share at Deutsche Bank. Analysts at Deutsche Bank acted upon the company's expanding presence among smartphone makers. In particular, Audience's levering to Apple's (NASDAQ: AAPL) iPhone supported a positive outlook for shares going forward.

ADNC opened at $17.35 and tacked on 7%, trading at $18.57 within 15 minutes before momentum reversed. Deutsche Bank's rating change on IPHI was reported at 6:22 AM on Benzinga Pro.

Since March 2012, we have “traded the ratings” based on three simple rules of thumb:

  • Go Long on upgrades to Buy or initiations with Buy
  • Go Short on downgrades with Sell or Initiations with Sell
  • Pull trigger when the ratings narrative supports a meaningful change in sentiment, AND current price represents significant upside to price targets
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Neither Benzinga nor its staff recommend that you buy, sell, or hold any security. We do not offer investment advice, personalized or otherwise. Benzinga recommends that you conduct your own due diligence and consult a certified financial professional for personalized advice about your financial situation.

Latest Ratings for SMBL

Aug 2012Canaccord GenuityMaintainsBuy
Aug 2012Sidoti & Co.UpgradesNeutralBuy
Jun 2012Canaccord GenuityMaintainsBuy

View More Analyst Ratings for SMBL
View the Latest Analyst Ratings

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