Summaries of Our Recent
Research Findings

June 4, 2008
Symantec (NASDAQ: SYMC - $20.75) Upgrade from HOLD to BUY
Symantec is a dominant leader in computer security, a mature but constantly evolving market. The company is improving its profitability after its costly acquisition of Altiris, and is making good on its commitment to operating margin improvements. Symantec is generating substantial deferred revenue growth as a result of Norton 360, an innovative consumer security offering that many existing customers are opting for at a higher price point. We expect Norton 360 to grow the company’s consumer market share, as well as improve the predictability of the business. We believe that Symantec is undervalued, and that its improving profitability and increasingly predictable business model will enable the stock to reach our price target over the next year.

May 13, 2008
JA Solar (NASDAQ: JASO - $21.50) JA Solar is in position to take advantage of the rapidly growing solar power market, which has reached over $10 billion in size. It is working to increase its customer base both inside and outside of China, and adding new production lines and expanding capacity frequently. It has also secured several long-term polysilicon supply contracts, which should limit the need to pay high prices on the spot market. However, JA Solar has tremendous geographic sales concentration in China, and customer concentration as well, with 41 percent of sales coming from three customers. This creates significant risk should there be a downturn in the Chinese solar market. Additionally, the company recorded a larger than expected level of revenue from related parties during the first quarter. Nevertheless, the strong worldwide demand for solar power should lead to strong growth for the business this year. We maintain our rating of HOLD on JA Solar.

April 29, 2008
Orbitz (NASDAQ: OWW-$7.25) HOLD Rating Maintained
Orbitz has developed a popular and well-respected brand in the online travel industry. It has taken advantage of the convenience provided by the Internet for selling travel products and services. Orbitz has maintained solid gross margins and a low level of DSOs. But we are concerned by the fact that it could not use any of its IPO proceeds to help build the business, and currently has almost $600 million in long-term debt and negative tangible book value. Its market opportunity is significant, but how much it will be able to grow in a crowded competitive landscape remains unclear. We maintain our HOLD rating on Orbitz.

April 28, 2008
Evergreen Solar (NASDAQ: ESLR - $8.60) SELL Reiterated
Despite demand for solar products remaining high, we expect competition to intensify over the next couple of years. Even when production begins at Evergreen Solar’s Devens facility later this year, it will be at a low level, and take at least an additional year to reach full capacity. Plus, when EverQ becomes independent, income from its operations will be removed from Evergreen’s income statement. This could keep Evergreen unprofitable, or drop it from positive to negative earnings if its standalone operations are not sufficiently developed. The company expects to be unprofitable in 2008 due to elevated production start-up expenses primarily related to Devens. We believe it is reasonable for Evergreen to trade at five-times sales, closer to the industry average. With just under 120 million shares outstanding at the end of Q1 2008, we come up with a price target of $5.70 per share. This implies significant price depreciation from current levels. With this in mind we maintain our SELL rating on Evergreen.

April 9, 2008
Amazon.com (NASDAQ: AMZN - $77.30) Initial SELL Rating
Though Amazon.com dominates book sales over the internet, and has become a leading online retailer of audio CDs, music downloads, and consumer electronics, it remains susceptible to the slow down in consumer spending. Notwithstanding the trend toward increased consumer spending on the web, Amazon.com is unlikely to have nearly as successful a year in 2008, as it did in 2007. Amazon.com’s gross margin structure is particularly complex, as it represents a wide variety of merchandise. This results in limited opportunities for operating margin expansion. Amazon.com’s electronic book reader, the Kindle, has been well-received by early adopters of electronic books. Though the company claims to be struggling to keep up with demand, we believe that the near term impact on sales and margins will be meager at best. At recent share price of $77.30, Amazon.com trades at 39 times our fully-taxed 2008 EPS estimate of $2.00. We believe that AMZN can grow earnings by 30 percent this year. Attaching a multiple of 30 to our $2.00 estimate yields a price target of $60.00 per share. Accordingly we initiate coverage with an SELL rating and $60.00 per share price target.

April 3, 2008
Google (NASDAQ: GOOG -- $466.00) Update on Recent Events: HOLD Maintained
Primarily known for its Internet search engine, Mountain View, CA-based Google aims to organize the world’s information. Google offers a myriad of online information tools, yet virtually all of its revenue—99 percent in the year 2007—comes from advertising fees. In 2007 Google’s net sales were about $11.7 billion, and its market cap is $144 billion. In this report we discuss recent developments related to Google’s acquisition of DoubleClick as well as the company’s mobile phone initiatives. Last night, Google announced it would reduce DoubleClick’s workforce by 25 percent, the latest indication that the ad business is softening. With Google fielding only a temporary CFO, it is not surprising that the financial impact of these projects remains unclear. We view Google, nevertheless, as a core Internet holding, and therefore maintain our HOLD rating on the stock.

March 20, 2008
TIBCO Software (NASDAQ: TIBX - $7.38) Initial Coverage with a HOLD
Tibco competes in the middleware market, offering service oriented architecture, business process management, and now business intelligence products. SOA is a process or style of designing business applications, and Tibco’s products help to remove barriers from the goal of a unified network of applications that share data and collaborate in real time. Tibco is the last notable independent middleware company in this space, raising speculation that it could be an acquisition target. Standalone, we find the company to be shaky in the current environment. With over 30 percent of its sales focused on the financial services sector, ongoing turbulence might curb IT investments. Further, with its top 10 customers contributing 30 percent of revenue, concentration is a concern. Combined with slow projected organic growth and a goal to grow through acquisitions in 2008, we question whether management can return increased value to the shareholders through continuing operations.

February 28, 2008
Ariba (NASDAQ: ARBA - $9.50) Company Update: BUY
Ariba continues to dominate the procurement and sourcing market. With annual sales exceeding $300 million, Ariba has a market share more than three times that of its closest competitor, who, as best we can tell, is privately-held Emptoris of Burlington, Massachusetts. We believe that Ariba is in the eighth inning of a transition from selling primarily perpetual licenses to software subscriptions. Its recent acquisition of Procuri will enable it to cover its flank in the subscription sourcing area, and better maintain prices in the future. In addition, over the last several years has developed a very nice niche in sourcing services that allow manufacturing and services companies to assess the price, delivery and value add of their suppliers. We believe this helps differentiate Ariba in the eyes of its customers. Our sense is that the shares are under-valued relative to other leading players in the enterprise software sector that maintain a high market share in a valuable niche. Accordingly, we maintain our BUY rating on the stock.

February 22, 2008
Scholastic (NASDAQ: SCHL - $36.75) Rating Change: HOLD to SELL
Scholastic, with annual sales exceeding $2.4 billion and a market capitalization of $1.4 billion, publishes children’s books and educational materials. The New York City-based company is also a leading developer of K-12 educational technology products. A number of concerns, some new, some longstanding, lead us to downgrade the stock from HOLD to SELL, including: volatility in the children’s publishing division in absence of the Harry Potter series; lack of clarity into divestiture of the continuities business; struggling sales of educational technology products; and a weak balance sheet.

February 20, 2008
JA Solar (NASDAQ: JASO -- $17.76) Company Update: HOLD
JA Solar, based in Hebei, China, manufactures solar cells. With sales of $262 million for the 12 months ended 9/30/08, and a market cap of under $3 billion, it is one of the larger Chinese solar firms. The company is growing quite rapidly, and we expect it to reach sales of $337 million for the year 2007, which would be 276 percent higher than the prior year. Despite a compelling valuation (the stock trades at 26 times our 2008 EPS estimate of $0.69), we believe concerns over sales concentration and margins are enough to advise caution when approaching the stock. As a result we maintain our HOLD rating. In discussing financial results and projections, this report reflects JA Solar’s 3-for-1 stock split announced in Jan. 2008.

February 5, 2008
LDK Solar (NYSE: LDK -- $38.30) Company Update: HOLD
LDK Solar is based in Xinyu City, China. It is a manufacturer of solar wafers, with 12-month sales of $393 million for the period ended 9/30/07 (results for Q4 ’07 have not yet been released) and a market cap over $4 billion. The company is growing rapidly, and we expect it to reach sales of $511 million for the year 2007, which would be 385 percent higher than the prior year. LDK currently trades at a discount to projected growth. Yet we believe questions over product quality and expected declines in gross margin are enough to advise caution when approaching the stock. As a result we maintain our HOLD rating on LDK Solar.

January 29, 2008
VMware (NYSE: VMW - $83.00): Downgrade from HOLD to SELL
Though VMware faces little current competition in the burgeoning virtualization market, Microsoft is moving quickly to develop its products and strategy; its massive customer base and deep pockets will make it a dangerous future competitor in technology, price, and marketing. While VMware’s longer term growth prospects are good, we expect the company to experience a declining rate of growth over the foreseeable future. As a recently-minted IPO, VMware is trading well in excess of 100 times our new EPS estimate of $0.68 for 2008, and about 80 times our 2009 EPS projections. Accordingly, we are reducing our rating on VMware from HOLD to SELL.