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TheStreet.com's Jim Cramer says the exchange rate plus massive undervaluations make the great brands prime targets.

There's always been a groupthink in Europe about currencies. The companies that want to buy American companies have, at times, seemed to care more about the currency, or at least not buying a company in a country whose currency is in decline, than they care about the actual target.

That's what it looks like now that a large German company and now a large Italian company have decided to start splurging. It is no coincidence that Deutsche Tel (NYSE: DT) (Cramer's Take) and Finmeccanica are exploring Sprint (NYSE: S) (Cramer's Take) and DRS (NYSE: DRS) (Cramer's Take). These companies are selling for something like 40% off for those bearing euros, and neither potential acquirer has debt problems or subprime issues, so the deals don't have big borrowing problems.

That's what I am thinking about when I see the better-than-expected figures today from Unilever (NYSE: UL) (Cramer's Take) and the other day from Nestle. These companies are part of that same groupthink. They are looking, no doubt, at a Heinz (NYSE: HNZ) (Cramer's Take) and thinking, "Wait, that's about a $10 billion company that's a global leader."

Allergan (NYSE: AGN) is trading lower today after an analyst at Jeffries & Co. downgraded the stock to "Hold" from "Buy." AGN's price target was also cut to $62 from $78. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on AGN.

After hitting a one-year high of $70.40 in January, the stock hit a one-year low of $52.26 last week. This morning, AGN opened at $55.65. So far today the stock has hit a low of $54.32 and a high of $56.45. As of 12:10, AGN is trading at $55.24, down $2.32 (-4.0%). The chart for AGN looks bearish but improving slightly, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.

For a bearish hedged play on this stock, I would consider a May bear-call credit spread above the $60 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 4.2% return in two weeks as long as AGN is below $60 at May expiration. Allergan would have to rise by more than 8% before we would start to lose money. Learn more about this type of trade here.

AGN hasn't been above $60 since February and has shown resistance around $60 recently. This trade could be risky if the company's earnings (due out on 5/7) are a positive surprise, but even if that happens, this position could be protected by resistance AGN might find around $60, where it topped out in early April.

Brent Archer is an options analyst and writer at Investors Observer.

DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in AGN.

MOST NOTEWORTHY: Dynamic Materials, Allergan and Sun Micro were among today's noteworthy downgrades:

• Dynamic Materials (NASDAQ: BOOM) was downgraded to Neutral from Overweight at J.P. Morgan following the Q1 report based on margin risk from steel costs and availability.
  
• Allergan (NYSE: AGN) was downgraded to Hold from Buy at Jefferies ahead of the Q1 report on May 7 based on potential deceleration in Botox and breast implants, which could result in multiple contractions.
• Sun Microsystems (NASDAQ: JAVA) was downgraded to Peer Perform from Outperform at Bear, citing the disappointing earnings report for the downgrade.

OTHER DOWNGRADES:

• ManTech (NASDAQ: MANT) was downgraded to Neutral from Outperform at Cowen based on valuation and expectations for decelerating growth in 2H08.
  
• Silver State Bancorp (NASDAQ: SSBX) was downgraded to Sell from Hold at Sandler O'Neil.

The choppy/consolidating (or perhaps worse) market conditions sometimes give the impression that growth plays do not exist, but that is not the case, and one growth company worth reviewing is Allergan.

Allergan, Inc. (NYSE: AGN) is a leading producer of ophthalmic, neuromuscular and skin care pharmaceuticals, and, via its March 2006 acquisition of Inamed Corp., aesthetic products.

Analysts see 10-13% revenue growth in 2008, but with U.S. sales growth dampened by the slow-growth U.S. economy. International markets accounted for about 34% of sales.

Concerning Botox, so far there has been no slowdown for therapeutic of cosmetic use, but the latter may record slower growth if U.S. discretionary purchases decline, in the quarters ahead.

Allergan Inc. (NYSE: AGN) opened at $119.35. So far today the stock has hit a low of $118.82 and a high of $119.75. As of 10:40, AGN is trading at $119.14, down $0.23 (-0.2%).

The stock climbed sharply throughout the spring to reach a year high of $125.00 on the final day of May, but has been falling quickly over the last two weeks. Jim Cramer believes that this stock fell more than it should have after Friday's downgrade from Morgan Stanley. He believes shares deserve to be higher, and with the stock falling a bit more still today, it may be a good time to go bargain hunting. Recent technical indicators for AGN have been bullish and steady, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.

For a bullish hedged play on this stock, I would consider an October bull-put credit spread below the $100 range. AGN hasn't been below $100 since last June and has shown support around $117 recently. This trade could be risky if the FDA finds trouble with one of AGN's medical products, but even if that happens, the stock could find some strong historical support around $105.

Brent Archer is an options analyst and writer at Investors Observer. DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in AGN.

MOST NOTEWORTHY: Nike Inc (NYSE: NKE), Foot Locker Inc (NYSE: FL), Tellabs Inc (NASDAQ: TLAB), ADTRAN, Inc (NASDAQ: ADTN) and Bookham, Inc (NASDAQ: BKHM) were today's noteworthy downgrades:

• Banc of America downgraded shares of both Nike and Foot Locker to Neutral from Buy, as the firm believes industry pressures in the U.S. could more than offset the potential turn in Europe and benefit from the 2008 Olympics.
• Cowen downgraded shares of ADTRAN, Bookham and Tellabs to Neutral from Outperform.
• Goldman Sachs also downgraded shares of Tellabs, to Sell from Neutral, as the firm believes the stock fully discounts the expected sales and margin improvement.

OTHER DOWNGRADES:

• Allergan Inc (NYSE: AGN) was downgraded to Equal Weight from Overweight at Morgan Stanley citing limited upside.
• Friedman Billings removed The Cheesecake Factory Incorporated (NASDAQ: CAKE) from its Top Picks and maintained its Outperform rating.
• Lehman downgraded shares of The First American Corporation (NYSE: FAF) to Equal-Weight from Overweight on increasing risk to the company's title margin and regulatory concerns.
• Matrix USA downgraded shares of Lowe's Companies Inc (NYSE: LOW) to Buy from Strong Buy on valuation.

MOST NOTEWORTHY: The more noteworthy downgrades today came from Calyon, which cut five companies in the oil services and equipment sector:

• Calyon is taking a more cautious stance due to valuations in the sector. The firm believes strong fundamentals are now reflected in share prices. As such, Calyon downgraded Global Industries, Ltd (NASDAQ: GLBL), Ensco International Inc (NYSE: ESV), Transocean Inc (NYSE: RIG) and Schlumberger Ltd (NYSE: SLB) to Add from Neutral and downgraded Gerber Scientific, Inc (NYSE: GRB) to Neutral from Add...

OTHER DOWNGRADES:

• Piper Jaffray cut ValueClick, Inc (NASDAQ: VCLK) to Market Perform from Outperform.

• UBS cut Lyondell Chemical Co (NYSE: LYO) and IndyMac Bancorp, Inc (NYSE: IMB) to Neutral from Buy.

• Goldman downgraded Worthington Industries, Inc (NYSE: WOR) to Sell from Neutral.

• Matrix USA cut Allergan, Inc (NYSE: AGN) to Sell from Hold and Fifth Third Bancorp (NASDAQ: FITB) was downgraded to Underperform from Market Perform at Keefe Bruyette.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

Allergan Inc. (NYSE: AGN) opened at $123.64. So far today the stock has hit a low of $123.40 and a high of $124.42. As of 12:20, AGN is trading at $124.09, up $0.45 (0.4%).

After a dip that began in late 2006, this stock found support in March and rebounded nicely, climbing to a new all-time high today. Jim Cramer called the Botox maker the "single best baby boomer play there is," shaking off concern that Medicis (NYSE: MRX) will come up with a cheap alternative that will hurt the Botox biz. Cramer believes Allergan's market is strong and will keep the stock going higher. Recent technical indicators for AGN have been bullish and steady, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.

For a bullish hedged play on this stock, I would consider an October bull-put credit spread below the $105 range. AGN hasn't been below $105 since July and has shown support around $117 recently. This trade could be risky if one of the company's products gets in trouble with the FDA, but even if that happens, this position could be protected by the strong historical support around $106.

Brent Archer is an options analyst and writer at Investors Observer. Do you have any deadwood in your portfolio? Check out the 18 Warning Signs That Tell You When To Dump A Stock. DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in AGN or MRX.

MOST NOTEWORTHY: Specialty pharmaceutical companies make up today's most noteworthy list:

• The Bank of America initiated Shire plc (NASDAQ: SHPGY), Mentor Corp (NYSE: MNT), Alcon, Inc (NYSE: ACL) and Allergan, Inc (NYSE: AGN) with Buy ratings and initiated Cephalon, Inc (NASDAQ: CEPH), Forest Laboratories, Inc (NYSE: FRX), Sepracor Inc (NASDAQ: SEPR) with Neutral ratings. Bank of America's top pick is Shire plc as the firm expects the company to launch six products or product extensions by mid-2008, followed by Mentor Corp, as the conversion to silicone breast implants should drive a period of stronger-than-expected sales and earnings.

OTHER INITIATIONS:

• Ford Motor Co (NYSE: F) was initiated at Buckingham with an Underperform rating and General Motors (GM) was started with a Neutral rating.

• Nollenberger believes Under Armour, Inc (NYSE: UA), started with a Buy rating, is positioned to outperform the market based on the strength of its brand name and demand through the continued introduction of new products along with European growth.

• Barr Pharmaceuticals, Inc (NYSE: BRL) was initiated with an Equal Weight rating and $53 target at Morgan Stanley.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

Pfizer (NYSE:PFE) announced Monday it would cut 10,000 jobs in a plan to lower costs by $500 million to $1 billion per year.

Wall Street had anticipated some amount of restructuring/job cuts, but the size appeared to be larger than many analysts had anticipated.

Simultaneously, Pfizer said it now expects 2007 EPS of $2.18 to $2.25 compared to the Reuters consensus estimate of $2.20. Pfizer's shares were down about 50 cents to $26.70 in afternoon trading Monday.

The emerging consensus on Wall Street appeared to be that the Pfizer announced cuts represented the first of a series of steps the company will undertake to offset revenue losses when patents for key drugs expire. One example: Lipitor, from which PFE said it will lose an estimated $14 billion in revenue in 2011 to 2012 after its patent expires.

MOST NOTEWORTHY: Level 3 Communications (LVLT) and the Machinery Sector were the most notable initiations today.

• Credit Suisse initiated Level 3 Communications (NASDAQ: LVLT) with an Outperform rating and $7.50 target; the firm expects Level 3 to continue to benefit from strong demand for higher data usage.

• Morgan Stanley initiated the Machinery Sector with an In-Line rating.
  
• Within the sector, Deere & Co (NYSE: DE) was started with an Overweight rating and $116 target, Terex Corp (NYSE: TEX) with an Equal Weight rating and $67 target, and Caterpillar Inc (NYSE: CAT) & Agco (NYSE: AG) with Underweight ratings and targets of $52 & $25 respectively.

OTHER INITIATIONS:

• Baird initiated Alcatel-Lucent ADS (NYSE: ALU) with a Neutral rating and $15 target citing valuation and integration risks.

• Ferris Baker Watts initiated Navigators Group (NASDAQ: NAVG) with a Sell rating and $43 target; the firm said Navigators' balanced growth will serve to reduce underwriting/EPS volatility when the next highly active catastrophe season surfaces.

• Prudential initiated Allergan Inc (NYSE: AGN) with an Overweight rating and $138 target; the firm expects 2007 to be another strong year driven by medical aesthetics products acquired from Inamed in last year.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

Back on October 23, 2006 investment guru Jim Cramer came out strongly against Bare Escentuals (NASDAQ: (GS) BARE). I pitted my opinion against Cramers and "let it ride". I've just finished doing a cursory check on Bare Escentuals to see how they have fared. Suffice it to say, I hope no one sold their BARE shares based on Cramers advice.

The chart attached herein shall provide the whole story. My words are really not needed. Besides, I'm just a dude living up here in the woods and making cabinet panels for a living. What could I possibly know about investing? Bare Escentuals just went public in September of this year. Their performance thus far appears healthy to me.

The two stocks that Cramer liked in place of Bare Escentuals were Allergan (NYSE: AGN) and Medicis Pharmaceutical (NYSE: MRX). I will concede to Cramer that those two stocks have moved upward also. My point here is small and simple: You don't need a television crew and a stable of financial analysts to pick a winner now and then. If you have good instincts and the willingness to do your own research, you too can pick some stocks which will pay you to own. To quote my bald headed nemesis: "Do your homework."

(Image courtesy of Norton Sales)

On tonight's MAD MONEY, Jim Cramer said he thinks the market is still a buying opportunity, which he also keyed in on today. You just have to consider that they could sell off a few days and the market may not just rubber band bounce.

He thinks Allergan (NYSE:AGN) is a real winner as the cosmetic and beauty play. It has BOTOX and recently sold off from $122 to $117, which may be a gift. He said to add 25% of a position at a time so you don't just get it all at one price in case it still has a bit more room down.

Cramer also reviewed the credit card sector: While he normally goes after MasterCard Inc. (NYSE:MA) as the mechanism, he thinks Capitol One (NYSE:ONE) is the one you go after as a tool.

He thinks COF is now a winner as the #4 credit card issuer. He thinks it is cheap and also well positioned as bank. Cramer also noted that it would be a winner in a weak dollar environment.

On today's STOP TRADING! segment on CNBC; it's merger-mania these days and Jim Cramer had a lot to discuss.

Hard to find a common reason for all the mergers lately, he said. In the case of Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX)'s recent bid for Phelps Dodge Corporation (NYSE:PD), the reason was so the smaller company had a safer, more reliable source of copper, among others.

Cramer thinks the overall market is undervalued with a 17 P-E and all the cash on the sidelines.

Cramer discussed breast implant approvals. He said Allergan, Inc. (NYSE:AGN) is a genius company doing everything right by focusing on the plastic surgery boom. It's profiting from Bausch & Lomb Inc. (NYSE:BOL) woes. Cramer thinks that AGN should have been higher anyway and this is just icing on the case. He thinks it is still too cheap and therefore a hold.

The hand-held wireless device BlackBerry is the gift for Christmas, Cramer says. And no surprise: BlackBerry makers Research in Motion Limited(NASDAQ:RIMM) is galloping up to meet the challenge. Buy it, he says.

Jon Ogg is a partner in 24/7 Wall St., LLC; he does not own securities in the companies he covers.

Futures are positive in early morning trade, pointing to a higher start for stock.

Today investors will analyze the data from the retail sector, they will look at some economic indicators for an idea about employment, inflation and productivity. Strong retail sales could help the market rally, as are the falling oil prices of this morning.

This morning, some retailers have already reported same-stores sales and the market is now looking for a 3.4% rise in October for the industry, or a 4.9% increases ex-Wal-Mart Stores, Inc. (NASDAQ:WMT). Wal-Mart said last week it is expecting a 0.5% gain in same-store sales (sales at stores that have been open at least a year). It had just reported as expected.

Already reporting sales data this morning are Costco Wholesale Corp. (NASDAQ:COST) with a 4% rise, Pier 1 Imports, Inc. (NYSE:PIR) with an over 13% decline in sales, and American Eagle Outfitters, Inc. (NASDAQ:AEOS) that reported an 8% jump in same-store sales last night. AEOS also raised third-quarter earnings guidance. The stock might still be under pressure as some were expecting a 10% rise in sales. Walgreen Co. (NYSE:WAG) Oct same-store sales rose 11.4% and J.C. Penney Co.'s (NYSE:JCP) sales rose 8.1%.

This morning, some economic data is also due out. First, weekly jobless claims will be released at 8:30, but investors are waiting the main job report tomorrow. Also at 8:30, third-quarter productivity and unit labor costs will be reported. Unit labor cost could give investors a better idea about inflation, so barring any surprises, this is the number to watch out for. Finally, at 10:00, September factory orders are due. The European Central Bank makes its decision on interest rate today.

Top news stories this morning:

According to the Wall Street Journal, Tribune Co. (NYSE:TRB) said that due to low bids, it is now prepared to sell parts of the business and will consider offers.

Unilever NV/PLC (NYSE:UN, UL) reported a third-quarter profit drop of 48% after one-time gains from asset sales. Sales rose 1.6%. The figures were at the top end of market forecasts. Unilever shares were up over 4% in Europe.

Reporting today:

• Caremark Rx Inc. (CMX) - 63 cents per share for Q3.
• CVS Corp. (CVS) - 32 cents per share for Q3.
• International Paper Co. (IP) - 43 cents per share for Q3.
• Whole Foods Market Inc. (WFMI) - 29 cents per share for Q4.

Other stories:

Electronic Data Systems Corp. (EDS) reported third-quarter after the bell yesterday with profit climbing sharply to 24 cents per share on a 9% increase in revenue of $5.29. However the company said contracts for future work declined. Analysts were expecting 20 cents per share.

Apple Computer, Inc.'s (NASDAQ:AAPL) new iPod Shuffle will arrives in stores this Friday, tomorrow.

Goldman Sachs upgraded Dell, Inc. (NASDAQ:DELL) to neutral from sell.

General Electric Co. (NYSE:GE) has signed a $300 million deal with a Chinese company to make jet engine parts for it.and French engine maker Snecma.

In the auto industry:

• New car registrations in Germany are expected to have risen in October with foreign automakers boosting their share of Europe's biggest car market to 36.1%.
• Advanced Auto Parts Inc. (NYSE:AAP) reported Q3 (ending Oct 7) net income dropped to $58.9 million, or 56 cents a share but it includes 3 cents a share in stock option expense. Revenue rose to $1.1 billion from $1 billion. Analysts expected earnings of 54 cents a share. The company also lowered Q4 guidance.

Following Baidu.com, Inc.'s (NASDAQ:BIDU) earning, yesterday I revisited rumors of Google, Inc. (NASDAQ:GOOG) or Yahoo!, Inc. (NASDAQ:YHOO) buying Baidu.

Google is releasing a new version of its mobile email today.

Yahoo is going into the food business starting a site offering thousands of recipes, advice from chefs, video cooking guides and easy-to-use Web tools to help cooks answer the daily question: What's for dinner?

Hewlett-Packard (NYSE:HPQ) will have a fourth quarter earnings call on Thursday, Nov. 16, 5:30 p.m. ET/2:30 p.m. PT here.

Wendy's (NYSE:WEN) is offering DVD movie kiosks at its restaurants.

In Pharma: Global pharmaceutical sales grew 5% in the 12 months to August in leading markets, the same rate as recorded a month earlier. Pfizer Inc's (NYSE:PFE) Lipitor cholesterol pill remained the top-selling drug with sales of $11.6 billion.

Russian oil output fell again in October partly because the country and Exxon Mobil (NYSE:XOM) holding back the start up of full-scale production due to differences.

XM Satellite Radio (NASDAQ:XMSR) and Cingular Wireless (held by AT&T (NYSE:T)) announced a partnership to stream 25 XM music channels to Cingular handsets.