US HOT STOCKS: KLA-Tencor, ScanSource, TeleCommunication Systems -2-

9th Jul 2010 22:03

First BanCorp of Puerto Rico (FBP, $0.56, -$0.09, -13.81%) pulled back after a 54% jump Thursday. That rally came after it said it will issue preferred shares convertible to common stock to swap for those preferred holdings the U.S. Treasury Department had as part of the bank's bailout. Grand Canyon Education Inc. (LOPE, $21.02, -$1.37, -6.12%) will be the subject of a U.S. Department of Education program review investigating the for-profit college's administration of federal student aid, the school disclosed in a filing with the Securities and Exchange Commission late Thursday. Lazard Capital Markets initiated coverage on Harvest Natural Resources Inc. (HNR, $8.29, +$0.85, +11.42%) with a stock-investment rating of buy, calling it a "deep-value oil company with potential game-changing exploration ahead." Credit Suisse upgraded KLA-Tencor Corp. (KLAC, $29.80, +$1.10, +3.83%) to outperform from neutral, saying that investor concerns were more than priced in and that the supplier of inspection and measurement systems to semiconductor makers probably will see its memory product exposure return closer to historical highs. The firm said a presentation next week and the next quarterly earnings report will be positive catalysts. Lawson Software Inc.'s (LWSN, $7.48, -$0.14, -1.84%) fiscal fourth-quarter earnings fell 30% as restructuring charges and other effects again obscured core profit growth, better sales and improved margins. The business-software maker gave a weak outlook. Myriad Genetics Inc. (MYGN, $15.06, -$0.64, -4.08%) was cut to neutral from overweight by J.P. Morgan, which said the biopharmaceutical company has underperformed as "lingering unemployment has weighed on physician office visits, and expansion from the core oncology base into a more fragmented [obstetrics/gynecology] market has proved challenging." Citigroup downgraded London's National Grid PLC (NGG, $37.84, -$0.76, -1.97%) to hold from buy, saying now that the dust has settled on the surprise rights issue, three issues will determine the company's future: "The UK [capital expense] surge, how the capex/dividend is funded, and the likely strategic review of National Grid's U.S. operations." The firm said the new UK government seems committed to the environmental targets it inherited and, in response, National Grid has upped its capex. Unless the government policy changes, the capex is only likely to rise further, Citi said. J.P. Morgan upgraded railroad operator Norfolk Southern Corp. (NSC, $53.81, +$1.85, +3.56%) to overweight from neutral, saying the coal and intermodal business was attractive and the outlook for coal is even improving. Discount club-store operator PriceSmart Inc.'s (PSMT, $25.18, +$0.64, +2.61%) fiscal third-quarter profit jumped 38% as revenue increased and its stores' margins increased. The company also said June same-store sales jumped 15%. The result trounced U.S. retailers, which posted mixed same-store sales for the month after offering steep discounts to try to attract tightfisted consumers in a sluggish economy. ScanSource Inc. (SCSC, $26.49, +$1.39, +5.54%), a distributor of security devices such as bar-code scanners and card readers, raised its fiscal fourth-quarter sales guidance, becoming yet another technology provider to see demand top expectations. TeleCommunication Systems Inc. (TSYS, $4.11, +$0.23, +5.93%) has received a U.S. Army order for up to $9.8 million in communications gear and support. Under the deal announced Friday, the Army will pay $1.7 million up front and up to a total of $9.8 million if it exercises options through August 2011. The mobile communications company's gear allows soldiers to make calls and send video and data over an encrypted connection. -By Dow Jones Newswires; write to [email protected] (END) Dow Jones Newswires July 09, 2010 17:03 ET (21:03 GMT)