Monday's Top Upgrades (and Downgrades)http://www.fool.com/investing/general/2012/10/29/mondays-top-upgrades-and-downgrades-3.aspx Rich Smith
October 29, 2012
This series, brought to you by Yahoo! Finance, looks at which upgrades and downgrades make sense, and which ones investors should act on. Today, a rainy day on Wall Street is putting a damper on analyst activity, but we still have a few new recommendations for you: LifeLock (Nasdaq: LOCK ) , a recent IPO that's getting positive press from Needham & Co., plus Anworth Financial (NYSE: ANH ) and Yanzhou Coal Mining (NYSE: YZC ) -- two companies getting knocked down by downgrades. Let's find out why.
Good news first
LifeLock shares currently cost $7 even, which is 16% less than they began trading at on IPO day less than a month ago, and 30% below where the CEO had hoped to price the shares. Evidently, Needham thinks the sell-off is not justified, and it may have a point. Already profitable, LifeLock is an even better cash generator than its GAAP financials suggest, generating $33.7 million in positive free cash flow over the past 12 months, or more than twice its reported "net income" of $13.4 million.
Analysts expect normalized earnings at the company to increase upwards of 140% over the next couple years. At a today-valuation of just 18.5 times free cash flow, LifeLock just might be worth breaking into.
How much is Anworth worth?
On the plus side, Anworth says it grew its b