Based on most conventional valuation metrics, the stock is cheap at current levels.

Patterson-UTI expects to receive all rigs under its 15-rig package with National Oilwell Varco (NOV) by the end of this year. Patterson plans to invest approximately $500 million this year, including the continuation of rig fleet upgrades.

Patterson-UTI has been a beneficiary of the improving natural gas supply-demand outlook as evident from recent stock-price performance. As such, we see significant upside from current levels and our new $40 price objective, increased from $33 before, reflects 2009 P/E and EV/EBITDA multiples of 15.4x and 6.7x, respectively, both well within historical trading ranges.

Play COPEL for Brazilian Energy

We are keeping our Buy recommendation on Companhia Paranaense de Energia (ELP) or COPEL. The company's first quarter results were positive, the short-term outlook is also positive and the Brazilian business environment remains encouraging.

Additionally, energy consumption in Brazil is still heated, and the short-to-medium-term outlook is very encouraging. Moreover, becoming a part of the São Paulo Stock Exchange's Level 1 of Corporate Governance will enhance the positive aspects of the company. Finally, COPEL shares are trading at an attractive valuation.

COPEL has a strong balance sheet with a net debt of R$ 408.6 million. Additionally, ANEEL (Brazilian Government Agency for electric utilities) has proposed a tariff reduction for COPEL of 3.66% on average, starting June 24. Tariff correction for 2009 is expected to be very high since correction will be made on the basis of the IGP (Brazilian PPI) which is expected to reach at least 10% in 2008. The continued investments in new-generation plants will help to increase revenues and improve margins.

Presently, COPEL is trading at a P/E of 9.2x our 2008 estimated earnings. We believe the company's valuation looks highly attractive when compared to other international electric utilities and the industry mean of 17.4x. Also, the Brazilian economic plans for increasing investments in the electric energy sector are positive signs for COPEL.

All considered, we still think there is a reasonable upside potential for the stock in the short term, and the company should trade closer to the BOVESPA's (Brazilian benchmark) average. Our target price assumes a P/E of 11.5x 2008 EPADR estimate, close to the company s historical standards and the BOVESPA's average. Our target price is US$24.00.

Buy Semi-Maker Semtech Shares

Semtech Corporation (SMTC) is a fabless supplier of analog and mixed signal semiconductor devices. Forward guidance is for a 3-6% revenue increase in the July quarter.