Barnett production should grow by double digits through 2013.

We are upgrading KWK from a Hold to a Buy with a price target of $52.00 per share and are increasing our '08 and '09 earnings estimates to $1.47 from $1.16 per share and from $1.59 to $1.99 per share, respectively. Currently trading around $40.00 per share, our price target of $52.00 pre share represents a return of 30%.

Newly Favorable on ASM Int'l

ASM International  (ASMI) is an OEM [original equipment manufacturer] of both front-end and back-end semiconductor manufacturing equipment. The back-end business has gained significant momentum in the past two years, while the front-end business has struggled to become profitable.

On June 6, 2008, Applied Materials Inc. (AMAT) offered to buy two of ASM's units for $400 million to $500 million. ASM plans to respond to the bid by June 14. The break-up value of the firm could be $30.00 per share. We rate the shares of ASMI a Buy.

ASMI currently trades at a 13.7x multiple of our fiscal 2009 earnings estimate (P/E). The company has a unique position in the semiconductor manufacturing equipment market. ASMI has a growing presence in Asia. ASMI shares should benefit from the growth in 300mm orders, which is likely to be sustained in the foreseeable future.