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Monday's Top Upgrades (and Downgrades)

Rich Smith
November 26, 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, our headlines are biased to the downside, with analysts reducing ratings on clothier Aeropostale(NYSE: ARO) and catsup-maker H.J. Heinz(NYSE: HNZ). But it's not all bad news.

An upgrade for Anadigics(NASDAQ: ANAD)
Needham offered investors a potential "turnaround situation" this morning, in the form of semiconductor maker Anadigics. Pointing to the company's "new family of single-chip WiFi FEICs" (forward end integrated circuits) as the product that will turn the company around, Needham argues that "upside to our 2013 estimates is possible, [while] the ramp of these new products should also reduce cash burn and the risk associated with ANAD's cash position." According to, which reported the rating this morning, Needham now calls Anadigics a "buy" and encourages "investors interested in turnaround situation ... to take a fresh look at ANAD."

So let's do that.

After falling nearly 40% in value over the past year, Anadigics shares sell today for just a buck and change. Needham seems to think the valuation appropriate given today's level of sales, but expecting sales to double in short order, predicts a 0.8 times price-to-sales ratio on the shares (equivalent to today's valuation) could double Anadigics' stock price within a year. It could be right about that -- it cou