Hold - Price 20.61 on Dec. 30 by Morgan Joseph Ceradyne [didn't ship] any of its new X-SAPI body armor in 4Q08 as a result of a contract protest by a competitor. We are lowering our rating to Hold until the situation is resolved. If the matter had been settled quickly, Ceradyne might have made shipments by year end. Instead, the Army has decided to... seek new bids from suppliers. Those bids are expected to be submitted in mid-January, with orders possible as soon as the end of the month. The competitor is believed to have complained that it did not have an opportunity to update its delivery schedule and pricing data before the awards were made, which gave Ceradyne an approximate 63% of the first X-SAPI production order. Ceradyne management expects to be awarded a similar order in late January, with deliveries starting late in 1Q09. We are decreasing our 2008 estimates slightly to reflect the stop-work order. We estimate $685.9 million in sales, gross profit of $270.8 million, Ebitda [earnings before interest, taxes, depreciation and amortization] of $205.7 million, $165.2 million in operating income and net income of $106.8 million or $3.99 per diluted share. We are significantly lowering our 2009 estimates.... We estimate sales of $599.0 million, gross profit of $204.7 million, Ebitda of $135.5 million, operating income of $97.1 million and net income of $63.9 million, or $2.30 per diluted share.

Market Perform - Price 14.09 on Dec. 30 by Morgan Keegan ECLP announced this morning that it has agreed to acquire privately held Premise, which is a provider of software and consulting services that help hospitals manage the flow of patients in and out of hospital beds. The company is paying $38.5 million in cash and expects the transaction to close within the next 15 days. We estimate that Premise will add roughly $10 million of revenue in 2009 and be neutral to slightly dilutive to ECLP's earnings. After almost a decade spent integrating and leveraging its string of acquisitions from the late 1990s, ECLP appears to be solidly back in a consolidation mode with the EPSi, MediNotes and Premise deals in 2008. We believe all three transactions were well thought-out and expect more deals in 2009. However, we remain on the sidelines...due to valuation.

Buy - Price 9.08 on Dec. 30 by Wedbush Morgan Securities Although we continue to like Intersil's long-term story, we think the stock could be range-bound in the near term, as the company [which designs and makes analog integrated circuits] battles broad-based weakness in its end markets (computing and consumer were 61% in 3Q08). Our checks indicate that although the steep drop in demand has begun to stabilize, visibility continues to be poor. Our contacts believe that general visibility will not improve until after Chinese New Year.... Similar to most other analog companies, we think it is likely Intersil will take a one-time charge and write down or write off inventory in 4Q.... We highlight Intersil's solid balance sheet, with $289.8 million in cash [and] no debt.... We maintain our 12-month price target of $10, derived by applying a two times enterprise value/sales multiple on our calendar-year 2009 estimate of $477.3 million in revenue. [Estimated earnings: 33 cents a share.]

Buy - Price 46.73 on Dec. 29 by Morgan Joseph We are... establishing a 12-month $64 price target. We had been concerned about Axsys' valuation when the stock was in the high 60s and low 70s. However, at the current level we believe there is sufficient upside, approximately 37%, to warrant a more aggressive posture. Management has indicated that its business is operating smoothly despite the macro economy. We visited clients with management last month, and during those meetings, it was reiterated that pricing and volumes have not been affected by weak general economic conditions.....We expect total revenue for 2008 of $243.4 million ...and net of $2.27 per diluted share. For 2009, [the figures are $279.7 million and $2.66].

Neutral - Price 23.43 on Dec. 30 by Robert W. Baird & Co. We... believe UBSH's premium price-to-book multiple opens it to downside in the event that sector valuations compress or if near-term financial results disappoint. We would not be adding to positions and believe near-term upside is limited; target price moves a dollar higher, to $21.