Technical Trade Alerts on Recent Analyst Upgrade Notables: NOK, BPOP, MHK, YUM, MCD, UCBH for Nov. 18

Nokia Corp. (NOK) Trade Alert – NOK Receives Analyst Upgrade, Introduces Nokia E63

Nokia Corp. (NOK) shares climbed 3.79% to trade at $13.13 Tuesday mid-day. Nokia designs, manufactures and sells a range of mobile devices and networks with services and software worldwide. It also provides non-cellular technologies, such as Bluetooth, WLAN and GPS.

Merrill Lynch recently upgraded Nokia from Neutral to Buy. This new rating expects total return of 10% or more for low and medium volatility risk securities within the 12-month period from date of initial rating; and total return of 20% or more for high volatility risk securities.

Nokia was also upgraded to Outperform from Underperform by Bernstein Research, which said the majority of its concerns are now priced in following the profit warning Friday from the mobile phone maker.

The company recently announced the latest addition to its Eseries range, the Nokia E63, designed for people who need to manage their business and personal lives equally well. The Nokia E63, the company's flagship messaging device, brings the QWERTY keyboard form factor to a broader audience at a great price. It is expected to begin shipping in the coming weeks for an estimated retail price of EUR 199, before taxes and subsidies.

As stated by Soren Petersen, senior vice president of Nokia, "Our research shows that people want a device that deals with both their personal and professional lives, but helps them to separate the two. When someone sits down at lunch, they want to update their social network or browse their personal email account and they don't want work getting in the way of that. It's another great case of technology adapting to the people that use it. The Nokia E63 is a new proposition for Eseries - a messaging device where people will be just as involved in their social network as they are in their business network."

On pressure from the economic crisis and currency volatility, Nokia recently downgraded its outlook for industry-wide mobile device volumes for the fourth quarter. It now expects industry mobile device volumes in the fourth quarter to around 330 million in the fourth quarter and 1.24 billion for the year. It had earlier forecast 1.26 billion units for the year.

Nokia also announced it planned further cost cuts in 2009 "to respond appropriately to the market conditions," but said it would provide more details December 4 when it hosts its capital markets day in New York.

In its preliminary outlook for 2009, it also said it expects industry mobile device volumes to be lower than in 2008, mainly because of the overall economic slowdown.

Nokia offers mobile phones and devices based on the GSM/EDGE, 3G/WCDMA and CDMA global cellular standards under the Nokia brand, including the Nokia Nseries, the Nokia Eseries and Vertu sub-brands.

The company's multifunctional mobile phones or converged devices offer the functionalities of various portable single-purpose devices, such as megapixel cameras, music players, computers, gaming consoles and navigation devices.

It also provides services and software through mobile devices in the areas of advertising, business, entertainment, navigation and social communities comprising Nokia Ad Business, Nokia Intellisync E-mail, Nokia Music Store, Nokia Maps and Nokia Internet communities, such as WidSets and MOSH.

In addition, Nokia provides wireless and fixed network infrastructure, communications and networks service platforms, as well as related professional services. This portfolio includes base stations, base station controllers, cellular transmission equipment, switches, various network servers, media gateways, transmission systems for dense wavelength division multiplexers, synchronous digital hierarchy, IP routers, carrier ethernet switches, microwave radio equipment and operations and business support systems software.

The company also offers digital subscriber line access multiplexers, passive optical network and narrowband/multi-service equipment, as well as a range of operation services, from consultancy to outsourced operations; systems integration to hosting; and from network design to turnkey solutions.

In addition, it markets mobile WiMAX solutions. Nokia sells its products to operators, distributors, independent retailers and corporate customers.

In today's daily chart, NOK's Bollinger Bands indicate greater than normal volatility as reflected by an increased in distance between the upper and lower bands. Trading within its Bollinger Bands, the stock reflects neither an overbought nor oversold condition relative to its recent price trend. MACD reflects a strong bearish signal, with the indicator below the 9-day moving average signal line, and also below the critical 0 level, indicating that moving averages are trending lower. With share prices currently below the stock's 13-day moving average, the bearish signal is more pronounced with decreasing moving averages.

Popular Inc. (BPOP) Trade Alert – BPOP Obtains Analyst Upgrade, Completes Sale of Assets of Subsidiary to Goldman Sachs Affiliates

Popular Inc. (BPOP) shares rose 2.98% to $6.23 Tuesday mid-day. Through its subsidiaries, Popular offers a range of retail and commercial banking products and services in Puerto Rico and the United States.

B. Riley recently upgraded Popular from Neutral to Buy. This new rating expects total return of 10% or more for low and medium volatility risk securities within the 12-month period from date of initial rating; and total return of 20% or more for high volatility risk securities.

Popular recently announced it has completed the sale of the loan and servicing assets of its U.S. mortgage subsidiary Popular Financial Holdings Inc. to various Goldman Sachs affiliates. The sale would result in a reduction of approximately $900 million in loans and mortgage servicing assets that are mainly accounted at fair value. This will provide Popular with more than $700 million in additional liquidity and significantly reduce its U.S. subprime assets.

As stated by Richard L. Carrion, chairman, president and CEO of Popular, "The closing of this transaction is a major step forward in our efforts to build capital and liquidity, and create a leaner and more efficient business. We continue to focus on reducing the size of our footprint in the mainland U.S. to a level better suited to present economic conditions while taking steps to improve profitability across our business."

Due to exposure to bad loans, the company recently posted a steep loss in the third quarter, and said it will scale back its banking operations on the U.S. mainland in response to the economic downturn. It said losses totaled $668.5 million, or $2.42 a share, down from net income of $36 million, or 12 cents a share, in the same quarter last year.

Carrion said the loss resulted from a decision announced two months ago to sell the assets and stop the operation of a United States-based segment, Popular Financial Holdings. It plans to close or consolidate unproductive locations in the United States, where it operates 96 branches across six states.

However, excluding discontinued operations, losses totaled 79 cents a share. Analysts polled by Thomson Reuters had expected a loss of $1.64 per share.

Popular also provides vehicle financing, leasing and daily rental; mortgage loans and personal loans; and financial advisory, investment, and security brokerage services for institutional and retail customers, as well as insurance and reinsurance services.

As of December 31, 2007, the company operated 196 branches and approximately 615 automated teller machines in Puerto Rico, seven branches in the U.S. Virgin Islands, one branch in the British Virgin Islands, and one branch in New York.

In addition, it provides electronic data processing and consulting services; sells and hires electronic data processing equipment; and sells and maintains computer software in the United States, the Caribbean and Latin America.

Further, the company develops financial processing software applications; sells hardware products, such as ATM, POS and communication products; and provides ATM switching and driving services; and offers online consumer direct lending services.

In today's daily chart, BPOP's MACD reflects a strong bearish signal, with the indicator below the 9-day moving average signal line, and also below the critical 0 level, indicating that moving averages are trending lower. Trading within its Bollinger Bands, the stock reflects neither an overbought nor oversold condition relative to its recent price trend. With share prices currently below the stock's 13-day moving average, the bearish signal is more pronounced with decreasing moving averages.

Mohawk Industries Inc. (MHK) Trade Alert – MHK Receives Possible Credit Rating Downgrade from Moody's, Obtains Analyst Upgrade

Mohawk Industries Inc. (MHK) shares increased 1.28% to $30.13 Tuesday. With its subsidiaries, Mohawk engages in the production and sale of floor covering products for residential and commercial applications in the United States and Europe.

Longbow Research recently upgraded Mohawk from Sell to Neutral. This new rating expects the stock to perform in line with the average total return of stocks in analyst's or analyst's team's coverage universe over the next six to 12 months.

After Mohawk reported third-quarter earnings that fell short of Wall Street expectations, its long-term debt rating was placed on review for possible downgrade by Moody's Investors Service. Due to growing concerns of a "rapid decline" in consumer spending as a result of crippled housing and credit markets, the ratings agency placed Mohawk's investment grade Baa3 debt rating on review.

Moody's Senior Credit Officer Kevin Cassidy noted that even if the economy begins to recover "consumers will be much more cautious in their willingness to borrow and in their general discretionary spending patterns for the foreseeable future."

In a research note, Moody's said Mohawk could come under similar pressure in 2009.

While Moody's expects Mohawk to report weaker earnings and revenue in the near future, it believes the company's current liquidity of $60 million in cash and $800 million in a revolving credit facility is good.

Mohawk recently reported a third-quarter loss on a massive impairment charge, and issued fourth-quarter guidance far below Wall Street expectations. For the three months ended in September, Mohawk recorded a loss of $1.39 billion, or $20.37 per share, compared with a profit of $122.1 million, or $1.78 per share, in the year-earlier quarter.

Excluding a $1.2 billion non-cash impairment charge for goodwill and intangibles plus a $253 million deferred tax asset impairment, the company earned $1.10 per share. Analysts polled by Thomson Reuters expected a profit of $1.12 per share.

For the fourth quarter, Mohawk forecast per-share earnings of 20 cents to 30 cents, excluding an estimated fourth-quarter restructuring charge of $25 million to $30 million. Analysts expect a profit of $1.04 per share.

Mohawk operates through three segments: Mohawk, Dal-Tile and Unilin. The Mohawk segment designs, manufactures, sources, distributes and markets floor covering product lines, which include carpets, ceramic tile, laminate, rugs, carpet pad, hardwood and resilient. It offers its products under the brand names of Mohawk, Aladdin, Mohawk Home, Bigelow, Durkan, Helios, Horizon, Karastan, Lees, Merit and Ralph Lauren. This segment markets and distributes soft and hard surface products through independent floor covering retailers, home centers, mass merchandisers, department stores, commercial dealers and commercial end users, as well as through private labeling programs.

The Dal-Tile segment designs, manufactures, sources, distributes and markets a line of ceramic tile, porcelain tile, natural stone and other products. Its ceramic tile products are marketed under the Dal-Tile and American Olean brand names. This segment markets its products through independent distributors, home center retailers, tile and flooring retailers and contractors.

The Unilin segment offers laminate flooring and related high density fiberboard, as well as insulated roofing and other wood-based panels under the brand names of Quick-Step, Columbia Flooring, Century Flooring and Universal Flooring through retailers, independent distributors, private label and home centers.

In today's daily chart, MHK's Bollinger Bands indicate greater than normal volatility as reflected by an increase in distance between the upper and lower bands. Trading within its Bollinger Bands, the stock reflects neither an overbought nor oversold condition relative to its recent price trend. MACD reflects a strong bearish signal, with the indicator below the 9-day moving average signal line, and also below the critical 0 level, indicating that moving averages are trending lower. With share prices currently below the stock's 13-day moving average, the bearish signal is more pronounced with decreasing moving averages.

Yum! Brands Inc. (YUM) Trade Alert – UBS Upgrades YUM on Attractive Valuation, Lowers Price Target to $29

Yum! Brands Inc. (YUM) shares climbed .08% to $25.52 Tuesday mid-day. Yum! operates as a quick service restaurant company. It develops, operates, franchises and licenses a system of restaurants, which prepare, package and sell various priced food items.

UBS recently upgraded Yum! from Neutral to Buy, citing valuation after recent slide and potential for meaningful EPS growth. The firm lowered its price target on Yum! from $40 to $29, saying commodity deflation, momentum in Taco Bell US and KFC China, restructuring and platform innovation should support 2009 earnings per share growth.

Yum! recently said it will cut “several hundred” white-collar jobs from its Louisville headquarters and move other jobs to restaurant chain headquarters cities. According to Jonathan Blum, a spokesman for Yum!, the restructuring is part of the company's strategy to sell more company-owned stores to franchisees. The company said the moves won't affect Yum!'s high-growth international operations, led by its robust China division.

The company also reported its U.S. restaurant margin as a percentage of sales decreased by 2.2 percentage points and 2.0 percentage points for the quarter and year to date ended September 6, 2008, respectively. These decreases were the primary drivers in the U.S. Operating Profit declines of 16% and 11% for the quarter and year to date ended September 6, 2008, respectively.

Restaurant profit was negatively impacted by $32 million of commodity inflation for the quarter ended September 6, 2008. This decrease was partially offset by U.S. company same store sales growth of 4%, which included growth of 8% at Taco Bell and 6% at Pizza Hut and a decline of 4% at KFC.

Yum! operates various restaurant brands, including KFC, Pizza Hut, Taco Bell, Long John Silver's and A&W All-American Food Restaurants.

Its restaurants specialize in chicken, pizza, Mexican-style food and quick-service seafood categories.

As of December 31, 2007, it operated approximately 35,000 restaurants in 100 countries and territories.

In today's daily chart, YUM's MACD reflects a strong bearish signal, with the indicator indicator below the 9-day moving average signal line, and also below the critical 0 level, indicating that moving averages are trending lower. Trading within its Bollinger Bands, the stock reflects neither an overbought nor oversold condition relative to its recent price trend. With share prices currently below the stock's 13-day moving average, the bearish signal is more pronounced with decreasing moving averages.

McDonald's Corp. (MCD) Trade Alert - MCD Opens 1,000th Store in China, Receives Analyst Upgrade to Buy

McDonald's Corp. (MCD) shares rose 1.60% to $56.49 Tuesday. McDonald's, together with its subsidiaries, franchises and operates McDonald's restaurants worldwide.

UBS recently upgraded McDonald's from Neutral to Buy, citing earnings per share expectations in 2009. The firm said shares gains are sustainable and could accelerate.

The buy rating suggests solid business prospects and/or attractive valuation should cause the stock to outperform the market.

McDonald's recently said it had opened its 1,000th store in China in the southern province of Guangdong and planned to open another 175 stores in the country in 2009. According to the company, China is the second-fastest market in the world to open 1,000 McDonald's restaurants, and the company would accelerate its expansion going forward.

The company also recently posted a quarterly profit that beat Wall Street estimates, helped by a 7% increase in global sales. It also announced its global comparable sales rose 8.2% in October.

Systemwide sales for McDonald's worldwide restaurants increased 5.4% for the month, or 9.9% in constant currencies. Last month McDonald's earnings results showed it is growing faster than rivals as customers looked for low-priced fare amid the global economic crisis.

In October, the company's U.S. comparable sales increased 5.3% due to the enduring appeal of McDonald's breakfast, recent product introductions such as Southern Style Chicken, compelling value throughout the menu and the continued popularity of McDonald's Monopoly game.

In Europe, McDonald's strong performance in the UK, France and Russia and positive results in nearly all other markets drove a comparable sales increase of 9.8%. Unique menu items and promotions as well as everyday value options continue to resonate with customers and drive results.

McDonald's restaurants offer various food items, and soft drinks and other beverages. As of December 31, 2007, it operated 31,377 restaurants in 118 countries, of which 20,505 were operated by franchisees; 3,966 were operated by affiliates; and 6,906 were operated by the company. It also has a minority ownership interest in the UK-based Pret A Manger.

In today's daily chart, MCD's MACD reflects a weak bullish signal, with the indicator trending above the 9-day moving average signal line but still below the 0 level, indicating bearish moving averages. Trading within its Bollinger Bands, the stock reflects neither an overbought nor oversold condition relative to its recent price trend. With share prices currently below the stock's 13-day moving average, a bearish trend is generally indicated.

UCBH Holdings Inc. (UCBH) Trade Alert – UCBH Obtains Analyst Upgrade, Receives $298.7 Million Consideration from U.S. Treasury

UCBH Holdings Inc. (UCBH) shares climbed 1.96% to $4.16 Tuesday. UCBH Holdings operates as the bank holding company for United Commercial Bank, which provides personal and commercial banking services to small-and medium-sized businesses, business executives, professionals and other individuals. It primarily engages in generating deposits and originating loans.

B. Riley recently upgraded UCBH Holdings from Neutral to Buy. The buy rating suggests solid business prospects and/or attractive valuation should cause the stock to outperform the market.

UCBH Holdings recently announced it issued to the United States Department of the Treasury November 14, 2008 a total of 298,737 shares of Series C Fixed-Rate Cumulative Perpetual Preferred Stock in exchange for aggregate consideration of $298.7 million. The preferred stock issued has a one-cent par value and a $1,000 per share liquidation preference, and a Warrant to purchase up to 7,847,732 shares of UCBH’s Common Stock at an exercise price of $5.71.

The $298.7 million in new capital dramatically strengthens the company’s already strong capital position. The proceeds will be treated as Tier 1 capital. With the inclusion of this new capital, UCBH Holdings’ total risk-based capital ratio of 12.5% as of September 30, 2008, which is well above the regulatory requirements of 10.0% for “well capitalized” banks, would increase to 15.0%.

The company also announced its board of directors has declared dividends on both the Series B Preferred and Common Stock of the company. The quarterly cash dividend of $21.25 per share was declared on its 8.50% Non-Cumulative Perpetual Convertible Series B Preferred Stock for the dividend period September 15, 2008, to December 14, 2008. The Series B dividend is payable December 15, 2008, to stockholders of record as of the close of business November 28, 2008.

A cash dividend of four cents per share on the outstanding shares of Common Stock was also declared payable January 12, 2009, to stockholders of record as of the close of business December 31, 2008.

UCBH Holdings' deposit products include business and personal checking accounts, NOW accounts, savings and money market accounts, time deposits and individual retirement accounts.

Its lending portfolio comprises commercial real estate loans, construction loans, commercial loans, accounts receivable and inventory loans, short-term trade finance facilities, loans guaranteed by the United States Small Business Administration, multifamily real estate loans, residential mortgage loans and home equity lines of credit.

The company also provides merchant bankcard, cash management, private client, brokerage investment products and online banking services, as well as offers trade finance facilities for customers involved in the import and/or export of goods principally between Asia and the United States.

In addition, UCBH Holdings sells fixed and variable annuities, life insurance and covered options.

As of December 31, 2007, it had 51 branches in California, five in Atlanta metropolitan area, three in the Boston metropolitan area, one branch in Houston, eight in the New York metropolitan area, two in the Seattle metropolitan area, and branches in Hong Kong and China, as well as representative offices in Shanghai and Shenzhen, China and Taipei, Taiwan.

In today's daily chart, UCBH's Bollinger Bands indicate greater than normal volatility as reflected by an increase in distance between the upper and lower bands. Trading within its Bollinger Bands, the stock reflects neither an overbought nor oversold condition relative to its recent price action. MACD reflects a strong bearish signal, with the indicator below the 9-day moving average signal line, and also below the critical 0 level, indicating that moving averages are trending lower. With share prices currently below the stock's 13-day moving average, the bearish signal is more pronounced with decreasing moving averages.

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