is expected to be completed by year-end 2008. However this limits the upside potential of DRS. Thus, we change our recommendation to Hold on DRS common stock. Price appreciation to our near-term valuation target, coupled with the 3 cents per share quarterly dividend, represents annualized total return potential of 8.6%.

As a pure play defense contractor, DRS Technologies is well positioned to participate in growing areas of the defense budget on the strength and performance of its core technology businesses. In our view, the May 2008 merger agreement with Finmeccanica makes strategic sense for DRS. The union will create a $24 billion global defense giant.

Subsequent to declaration of its impending acquisition by Finmeccanica, DRS shares have traded at the upper-end of that range. As of this report, DRS common stock trades at 19.3x our current fiscal year 2009, earnings per share estimate, or at the median multiple value of the military electronics industry. Likewise, the stock also trades at its industry median values based on relative price multiples of sales and book value, yet at the lower end of its comparable peers relative to price-to-cash flow multiples.

Evergreen is Full of Energy

The growth potential of the solar industry as a whole - and Evergreen Solar Inc. (ESLR)in particular with a $3 billion contractual backlog - remains a compelling story. Capacity expansion and progress toward near-term break-even earnings make it one of the fastest growing alternative energy stocks.

The positive factors include the newly operational Devens facility, significant new multi-year sales contracts, planned capacity expansions over the next few years, improving operating efficiencies, technological upgrades, and new silicon supply contracts.

However, continuing earnings losses due to high start-up costs, increases in R&D and SG&A, significant capital expenditures and earnings dilutive stock issuances may present risks to near-term share price upside potential. Nevertheless, we maintain our Buy recommendation on ESLR with a six-month target price of $12.00. Price appreciation to our near-term valuation target represents 31.4% upside potential.

The company's String Ribbon wafer manufacturing technology is believed to be its core technology, which offers a substantial opportunity to reduce cost and otherwise advance the company's business through reduced materials cost, simpler processing, and lower required economies of scale. The company estimates the demand for its String Ribbon Technology products to reach 1.5 GW by 2012.

The company's future will depend on its ability to scale its manufacturing capacity significantly beyond the capacity of its Marlboro manufacturing facility, yet its business model and technology are unproven at the higher manufacturing level.

Moreover, the company's strategic partnership with Q-Cells is only in the early stages and, being the company's first strategic partnership, it has limited experience, making it difficult to predict how successful and profitable it will be.