Downgrades

ARGUS downgrades Smith International Inc. (NYSE: SII) from Buy to Hold.

ARGUS analyst says, "Smith is one of the few companies with the scale and quality to equip and now - with the addition of W-H's extraction and production services - carry out the largest and most complex drilling projects. We expect drilling activity to decline due to a weaker outlook for commodity prices and a weak environment in the capital markets. The number of rigs currently in service has already fallen by more than 150 year-over-year, and we think the decline could ultimately reach 500 or more rigs later this year...We are increasing our 2008 EPS forecast to $3.78 from $3.77 but decreasing our 2009 estimate to $3.00 from $4.65, reflecting expectations for a meaningful decline in E&P industry capex and lower expected margins...We are lowering our financial strength rating from Medium-High to Medium, largely due to the company's higher debt burden following its acquisition of W-H Energy Services."

Smith International, Inc. (Smith) is a global provider of products and services to the oil and gas exploration and production industry.

Cantor Fitzgerald downgrades Audiocodes (Nasdaq: AUDC) from Buy to Hold. Price target lowered from $3.50 to $2.50.

Cantor analyst says, "While we continue to find AudioCodes' shares attractive at current levels, we do not see enough upside to continue our BUY rating. The company maintains $0.35 in net cash per share and has a tangible book of $1.07 per share. It is also cash flow positive and should continue to generate cash in FY:09, according to our model. Hence, we continue to see little downside from current levels."

"We believe that there are several risks associated with an investment in AUDC, including the continued acceptance of the company's systems-oriented products, increased competition and geopolitical risk."

AudioCodes Ltd. (AudioCodes) designs, develops and markets enabling technologies and system products for the transmission of voice, data, fax and multimedia communications over packet networks, which it refers to as the new voice infrastructure.

MDB Capital downgrades Ener1, Inc. (AMEX: HEV) to Sell.

MDB analyst says, "Think Global, Ener1's most important near-term customer, announced it was temporarily halting production of its Think City electric vehicle due to working capital constraints. The company, which unsuccessfully approached the Norwegian government for direct support, reportedly needs between $15 million to $29 million in short term loan guarantees as a means to finance its current operations and planned expansion. We are now hearing that Think Global has been unable to find other funding sources and that the Norwegian government has again refused to provide the needed capital for continued operations. It now appears that there is a real likelihood of Think Global ceasing operations or at the very least scaling back to a much smaller enterprise. In any event, it now seems that Think Global will not be able to uphold its end of the $70 million contract with Ener1 for the delivery of batteries for the Think City vehicle. Without this contract Ener1 has little in the way of other contracts that might generate near term revenues and the valuation of the stock is no longer justified."

Ener1, Inc. (Ener1) has three business lines that it conducts through its three operating subsidiaries. EnerDel, Inc., an 80.5% owned subsidiary, which is 19.5% owned by Delphi Corporation, develops lithium ion (Li-ion) batteries for automotive, military and other industrial uses.

DA Davidson downgrades Ambassadors Group (Nasdaq: EPAX) from Buy to Neutral.

Ambassadors Group, Inc., an educational travel company, organizes and promotes international and domestic educational travel and sports programs for youth, athletes, and professionals.

SunTrust downgrades Ruby Tuesday, Inc. (NYSE: RT) from Buy to Neutral.

Ruby Tuesday, Inc., together with its subsidiaries, engages in the development, operation, and franchise of casual dining restaurants under the Ruby Tuesday brand name in the United States and internationally.