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Monday's Top Upgrades (and Downgrades)

http://www.fool.com/investing/general/2012/05/14/mondays-top-upgrades-and-downgrades.aspx

Rich Smith (TMFDitty)
May 14, 2012

Stocks go up, stocks go down -- and so do analysts' opinions of them. This series looks at which upgrades and downgrades make sense, and which ones investors should act on. Today we'll examine new buy ratings for Youku (Nasdaq: YOKU  ) -- China's answer to YouTube -- and also Ariad Pharmaceuticals (Nasdaq: ARIA  ) , a pioneer in cancer research. Rounding out the list, we'll check in on the just-reported downgrade at Hudson City Bancorp (Nasdaq: HCBK  ) .

Cuckoo for Youku?
After losing nearly half its market cap over the past year, Youku is a company with very few friends at the moment. It did gain one new fan, however, when this morning analysts at Maxim Group upgraded the shares to "buy."

As you may recall, Maxim did a similar upgrade on Youku three months ago, when it removed a "sell" rating on the stock and upgraded to "hold." At the time, the analyst was predicting gains in market share and an improving outlook as China's nascent Internet industry "consolidates." Today, with Q1 earnings expected to arrive on Thursday, Maxim appears to believe it's time to buy the stock in hopes it will pop Friday. Is Maxim right about that?

Anything's possible. Indeed, with its history of losses (Youku has never earned a full-year profit), and dismal prospects for the future (analysts project that even if Youku turns a profit next year, it will be trading at a P/E ratio of 236), it's hard to imagine what Youku could say Thursday that would qualif