Macrovision Upgraded to a Buy

SAN FRANCISCO -- Macrovision(MVSN Quote - Cramer on MVSN - Stock Picks) jumped on an analyst upgrade Thursday.

The stock of Macrovision, which sells software for digital content protection to movie studios and device manufacturers, was up $1.19, or 7.4%, to $17.18 in recent trading.

Jefferies analyst Ross MacMillan upgraded Macrovision to a buy and a one-year price target of $23. Jefferies makes a market in the stock. He said he found some merits to Macrovision's proposed merger with Gemstar-TV Guide(GMST Quote - Cramer on GMST - Stock Picks).

Immediately after the deal was announced Dec. 10, one sell-side analyst pulled his rating on the company, and another has since dropped coverage. Santa Clara, Calif.-based Macrovision is paying $2.8 billion for Gemstar for its TV listings.

MacMillan questioned whether shareholders would approve the deal, given each company's stand-alone strengths. "If the deal does happen, we think investors will get paid, but it may take longer," he wrote. "The stock looks very cheap" if the deal does not go through.

News Corp.(NWS Quote - Cramer on NWS - Stock Picks), which owns nearly 41% of Gemstar, has already approved the deal, according to Gemstar.

Macrovision has outlined a post-merger plan to create a digital home dashboard that would be comparable to Microsoft's(MSFT Quote - Cramer on MSFT - Stock Picks) Media Center, delivering searchable content listings for TV, music and videogames.

Such a platform could be preferred by cable and satellite operators and set-top box makers, MacMillan said.