We have maintained our revenue estimates for 2008 while increasing our earnings outlook due to improvement at the gross margin level. We expect DASTY to continue to raise its payout ratio slightly to 30% for 2008 and beyond. We expect the dividend in 2008 to be around 0.46 - 0.50 a share.

We continue to rate the shares of Dassault Systemes a Hold, and have tweaked our price target to $68.00 over the next six months, or 25.1x our new 2008 earnings estimate of $2.71 per share. The company has a strong presence in automotive and aerospace industries, with a global base of customers, and its business continues to grow in these industries as automotive and aerospace companies introduce new car models or a new airline program to the market.

Dassault is a proven leader in providing software solutions to the product lifecycle management (PLM) market and garners a high price-to-earnings multiple. At 23.9x our 2008 earnings estimate or 21.7x our new 2009 estimate, the company is priced around 2.2x to 2.3x its long-term growth rate.

Buy Small-Cap Biotech Osiris

We are moving Osiris Therapeutics, Inc. (OSIR) over to our Small-Cap Research coverage program. The company is making significant progress with stem cell therapies. Its lead product candidate, Prochymal, has the potential to be a sort of wonder drug for various inflammatory or tissue damage indications. As such, we are initiating coverage with a Buy rating and $20 price target.

Osiris is currently in three phase III trials, all under U.S. Food and Drug Administration's (FDA) Fast Track. These programs include steroid refractory Graft versus host disease (GvHD), acute GvHD, and Crohn's Disease (CD). Management is also studying the drug in earlier-stage programs for Myocardial Infarction, Chronic Obstructive Pulmonary Disease, Type-1 diabetes, and Acute Radiation Syndrome (ARS). With a full label, Prochymal has blockbuster potential.

The $224.7 million contract win with Genzyme Corp. (GENZ) from the U.S. Department of Defense was fantastic news. Although the headline number of $224.7 inflates the actual economic value to Osiris, if Prochymal can eventually receive FDA approval for ARS, this could be a very profitable venture for management. We remind investors that the government has committed to purchasing 20,000 doses of Prochymal at $10,000 per dose, if all goes well in the clinical studies.

Our current financial model only includes sales from both forms of GvHD and niche sales in CD. However, even with our conservative approach to modeling future Prochymal revenues, Osiris should become highly profitable by 2012. In the meantime, we see $20 as fair-value. This target is based on 25x our 2012 EPS forecast of $2.03, discounted back to present day at 20 percent.

Anglo American Risks Remain

We are maintaining a Hold recommendation on Anglo American, Plc (AAUK). The company is benefiting from strong demand for commodities around the globe and increased production. However, risks to global economic growth remain, and the strength of the South African rand could have a significant impact on future earnings.

The fundamental support for commodity prices is strong GDP growth worldwide, in particular the ongoing industrialization of China, Russia and India. Management is confident that commodity prices will remain strong this year and has ruled out a slowdown in demand from China.

We are also pleased by the company's restructuring program. The company said that its plans for a 'full de-merger' of its paper and packaging division were progressing, and that it was continuing with a phased exit strategy from its 41.8% stake in Anglogold.

The stock is currently trading at 14.0x our 2008 EPS estimate, a multiple above that of its peers at an average of 13.0x. Our six-month target price is $34.00.