Waters (WAT) (PACB) (CEC) (PMI) (CLR) (COGO) Downgraded

Waters Corporation (NYSE: WAT), Pacific Biosciences of California (NASDAQ: PACB), CEC Entertainment, Inc. (NYSE: CEC), PMI Group Inc (NYSE: PMI), Continental Resources, Inc. (NYSE: CLR) and Cogo Group, Inc. (NASDAQ: COGO) downgraded by analysts.

Waters Corporation (WAT) was downgraded by Goldman Sachs (NYSE:GS) from a “Buy” rating to a “Neutral” rating.

Pacific Biosciences of California (PACB) was downgraded by JPMorgan Chase & Co. (NYSE:JPM) from an “Overweight” rating to a “Neutral” rating.

CEC Entertainment, Inc. (CEC) was downgraded by Sterne Agee from a “Buy” rating to a “Neutral” rating.

PMI Group Inc. (PMI) was downgraded by Keefe, Bruyette & Woods, Inc from an “Outperform” rating to a “Market Perform” rating.

Continental Resources, Inc. (CLR) was downgraded by SunTrust (NYSE:STI) from a “Buy” rating to a “Neutral” rating.

Cogo Group, Inc. (COGO) was downgraded by Needham & Company from a “Strong Buy” rating to a “Hold” rating.

Cogo Group (NASDAQ:COGO) Tablet Revenue Accelerating on Growing Customer Base

The tablet revenue for Cogo Group (NASDAQ:COGO) is increasing quickly based on a growing customer base, said Ticonderoga.

They noted, "This morning (Wednesday), Cogo announced that its tablet revenue is 'accelerating faster than expected' due to the combination of an increase in Cogo's tablet customer base and a faster rate of growth in China's tablet market. With the ramp of China's mobile Internet expected to accelerate in 2011 in light of a more robust 3G infrastructure, more attractive price points on 3G phones and a growing app ecosystem, we believe tablets will increasingly become popular in China in 2011 and beyond. Additionally, most of the leading China-based smartphone, notebook/PC and consumer electronics companies have developed tablets that we expect will also enjoy strong export demand in the coming years... Given the robust trends at leading China-based OEMs during our recent China trip, we believe our 4Q10 revenue estimate of $107.7 million and pro forma EPS estimate of $0.23 is conservative."

Ticonderoga reiterates a "Buy" on Cogo Group, which closed Wednesday at $8.82, down $0.04, or 0.45 percent. Ticonderoga has a price target of $12.50 on COGO.

Cogo Group (NASDAQ:COGO) ESP Estimates Raised for 2011

Needham & Company released their report on the mobile sector, and companies like Cogo Group (NASDAQ:COGO) which have put themselves in place to benefit from the growth in 2011 should benefit strongly.

Needham said, "As discussed in our industry report, we believe that four primary themes will drive the communication semiconductor market in 2011, including 1) the rapid growth of mobile connected devices such as smartphones and tablets, 2) the growing complexity of RF front-ends for mobile connected devices, 3) increasing attach rates of WLAN, Bluetooth and GPS functionality in mobile devices and consumer electronics and 4) the migration towards cloud computing and to higher bandwidth mobile networks.

"We are introducing 2012 revenue and non-GAAP EPS estimates (for Cogo Group) of $460MM/$1.00, representing 9.5% and 11.1% growth over 2011, respectively."

Needham maintains a "Strong Buy" on Cogo Group, which closed Monday at $8.89, down $0.07, or 0.78. Needham raised their price target on them from $11 to $12.

Cogo's (NASDAQ:COGO) Acquisition of MDC Businesses Expand Industrial Exposure

Cogo Group's (NASDAQ:COGO) acquisition of some of MDC Tech's businesses has propelled them to a stronger position in the industrial sector, which should improve its margins going forward.

Ticonderoga said, "This morning, Cogo announced the acquisition of certain businesses of MDC Tech Inc. and inline with the company's outlook for an industrial-related deal to be unveiled by the end of 2010. Essentially, MDC is a technology solutions and engineering services company with most of its operations in China. Given the success of the Mega Smart deal, investors should embrace Cogo's bolt-on acquisition strategy and MDC furthers the company's push into the industrial market that enjoys faster growth and richer margins. When considering the MDC deal, we estimate Cogo's industrial exposure could rise to approximately 25% of sales by 4Q11 versus 18% in 3Q10. Trading at less than 8x (ex-cash) our CY11 pro forma EPS estimate, Cogo still represents an attractive value in our view."

Ticonderoga maintains a "Buy" rating on Cogo Group, which closed Wednesday at $9.22, gaining $0.49, or 5.61 percent. Ticonderoga raised their price target on them to $12.50.