Tuesday's Top Upgrades (and Downgrades)

This series, brought to you by Yahoo! Finance, looks at which upgrades and downgrades make sense, and which ones investors should act on. Today, our starting lineup features a broken-up Kraft -- now in two great new flavors: Kraft Foods (Nasdaq: KRFT) and Mondelez International (Nasdaq: MDLZ) . Also, a downgrade for ManpowerGroup (NYSE: MAN) .

No longer MAN's world
Let's get the bad news out of the way first. This morning, analysts at Avondale Partners pulled their buy rating on temp-services specialist Manpower, cutting the stock to "market perform" and reducing its target price $2 to $40 a share.

In an America where 8% of the population is out of work, even more people have given up looking, and finding a good-paying, full-time job is a full-time job in itself, you'd think the future would be bright for a company specializing in connecting willing workers with paid, temporary employment. And if truth be told, Manpower is doing OK in that regard. It's profitable, and expected to keep growing its profits at about 7% a year over the next five years.

Problem is, it's not profitable enough, or growing fast enough, to justify the stock's high price. At 13 times trailing earnings, even Manpower's modest 2.3% dividend yield can't make this stock a bargain. With weak free cash flow and a bit of debt thrown into the mix, even calling Manpower a "market performer" seems a bit of a stretch. In short, Avondale's right to downgrade it. The only question is whether the analyst downgraded Manpower far enough.

America now spells cheese K-R... F-T
In happier news, investors got our first glimpse of the new (and improved?) Kraft Foods yesterday, when the company split itself into homegrown Kraft Foods and a new foreign-oriented company known as Mondelez International. (More on that one below.) This morning, multiple analysts initiated coverage of Kraft with "buy" ratings, or their equivalent, with Stifel Nicolaus, for example, assigning a $49 price target, and several more analysts saying the stock is worth $50.

For now, though, investors should take these guesses with a few grains of salt. We know a little bit about the Mondelez-less Kraft Foods -- it's got $18.7 billion in trailing revenue. It's profitable and free-cash-flow positive. It costs about $45 a share. But even respected financial data sites such as S&P Capital IQ are currently choking on the spinoff data, and haven't yet decided what the company's market cap is.

Buying a share of Kraft, without knowing its market cap for certain, is like filling up your shopping cart at the grocery store, then breezing through checkout without looking at the prices of any items, or even glancing at your receipt. You simply have no idea what you're paying -- and that's not smart shopping.

My advice: Sit on the sidelines for now. In a day or two, the data providers will figure out what's up with Kraft, and how much a share will cost you. Until then, keep your wallets in your pockets.

What's English for "Mondelez"?
If the situation with Kraft is confusing, the one facing hopeful buyers of Mondelez is downright befuddling. So far, Capital IQ doesn't have any solid data on the Kraft spinoff, and free financial data sites like Yahoo! Finance, for example, have less than nothing. Regardless, most analysts initiating coverage of the stock this morning are telling you to buy Mondelez -- but again, I say "wait."

Why? The lack of solid numbers to base your investment on is bad enough, but making things worse is that some analysts are already beginning to voice concerns about Mondelez's prospects. This morning, for example, Deutsche Bank waved investors away from the stock, warning that "close to 30% of revenue is ... largely tied to the challenging EU market. Furthermore, global gum (about 10% of sales) has struggled, with no clear turnaround signs ... Thus we see Mondelez as initially too optimistic in its 5-7% sales growth goals, particularly given the challenges noted above and slower trends in EM such as Brazil, India and Russia."

So here, as many analysts try to get you to buy a black cat in a dark room at midnight, Deutsche is suggesting the cat may not even be a cat at all. Do you want to risk your hard-earned money buying who-knows-what? Or would you rather wait a few days for some good data on what it is that Wall Street's trying to sell you?

Fool contributorRich Smithholds no position in any company mentioned.The Motley Fool has adisclosure policy. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.