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Tuesday's Top Upgrades (and Downgrades)

Rich Smith
September 3, 2013

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 feature sell ratings on a pair of big health care companies -- Intuitive Surgical (NASDAQ: ISRG) and AstraZeneca (NYSE: AZN), balanced by ...

A big buy recommendation for BlackBerry
Last night's revelation that Microsoft (NASDAQ: MSFT) was willing to pay big bucks to acquire cash-burning Nokia (NYSE: NOK) had an unexpected result of making rival smartphone maker BlackBerry (NASDAQ: BBRY) seem more attractive this morning.

According to, Merrill Lynch is warning that the combination of Nokia's money-losing smartphone business with Microsoft's ample cash coffers is "mostly negative" for companies that compete with Nokia -- like BlackBerry. Regardless, StreetInsider says that as of Tuesday, a research shop by the name of "Makor" has decided to initiate coverage of BlackBerry not with the logical "sell" or "neutral" ratings, but instead with a "buy."

Makor says BlackBerry shares, selling for $10 and change today, are destined to hit $14.60 within a year -- a 41% jump -- and investors are leaping aboard, as BlackBerry rises 2.4% in early Tuesday trading. But is that the right move?

There may be something to the idea that, if Microsoft will shell out $7.2 billion to buy a cash-burning Nokia cell phone division, it follows that someone else might spend even more money to buy unprofitable -- but free cash flow-positive -- BlackBerry. However... who?

I honestly don't see any buyers on the horizon for BlackBerry. And while the prospect of buying a free cash flow-stream of $1.9 billion annually -- for a market cap less than three times that sum -- is certainly intriguing, the fact remains that Black