Picks of the Week: Google, Cisco, Alcoa, AT&T

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Oct. 6

Family Dollar Stores (FDO)

BMO Capital Markets upgrades to outperform from market perform

BMO Capital Markets analyst Wayne Hood lifted his rating on Family Dollar Stores Inc. on Oct. 6, noting the stock had lost 14% of its value since early July. Hood said the stock now represents a good buying opportunity. "The stock is as cheap as it's been in years," he wrote in a client note.

"We believe investors are presently struggling to find new ideas with reasonable (stock prices), above average returns on capital, strong free cash flow yield and good long-term growth prospects. We see all of these in Family Dollar," he wrote.

Cirrus Logic (CRUS)

Needham & Co. rates buy; raises estimates, price target

Needham analyst Vernon Essi, Jr., said on Oct. 6 that Cirrus preannounced second-quarter revenues of about $55.7 million, 11% above the midpoint of its prior guidance range; augmenting the upside is that gross margin will be at higher end of its prior 50%-52% guidance range, implying the company can maintain margins against a shift in its business mix toward what's being perceived as lower-margin portable audio business.

The analyst notes the company's audio business is benefiting from a revenue ramp-up in key smartphone programs, as well as continued penetration within a legacy portable audio customer. He raised his fiscal 2010 (ending March) earnings estimate from 22 cents per share to 28 cents, and his $8 price target to $9.

Oct. 5

Manitowoc Co. (MTW)

Deutsche Bank upgrades to buy from hold

Deutsche Bank analyst Nigel Coe upgraded heavy equipment maker Manitowoc Co. late Oct. 4 on the strength of its foodservice equipment business. Manitowoc's foodservice division is "likely to dominate" over the next year or two, accounting for about 45 percent of revenue and two-thirds of earnings before income taxes, depreciation and amortization in 2010, Coe said in a client note.

"While the convenience restaurant and lodging segments have not been immune through this downturn, with revenues down low single-digit and margins expanding next year ... we see Manitowoc's foodservice segment as a critical earnings anchor," Coe said.

DTS Inc. (DTSI)

Deutsche Bank upgrades to buy from hold; raises price target

DTS Inc. is set for a period of "hyper-growth," Deutsche Bank analyst Brian Thackray said Oct. 5, pointing out improving demand for Blu-ray DVD players. Thackray said his checks with more than 500 retailers show Blu-ray technology is finally catching on as prices come down, a trend likely to boost sales for DTS. The Agoura Hills, Calif., company makes equipment for audio systems used in DVD players, computers and other electronics.

In addition to upgrading the shares, Thackray raised his price target to $32 from $28.

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