NICE is recommending the use of the product for the prophylaxis treatment of headache in adults with chronic migraine, who have not responded to at least three prior preventative treatments and whose condition is appropriately managed for medication overuse in England and Wales. 

A final guidance by NICE is expected to be published in June. Primary Care Trusts (PCTs) will have to allocate funds within 3 months after the final guidance is issued.

Botox is already approved by the U.S. Food and Drug Administration (FDA) for the treatment of chronic migraine headache in adults. Last year in August, Botox received FDA approval for the treatment of neurogenic overactive bladder (OAB).

The other uses of the drug comprise treatment of increased stiffness of muscle in elbow, wrist, and finger muscles in adults with upper limb spasticity; treatment of abnormal head position and neck pain that happens with cervical dystonia in patients aged 16 years and above; and treatment of certain types of eye muscle problems (strabismus) or abnormal spasm of the eyelids (blepharospasm) in patients aged 12 years and above.

Botox is also used to treat the symptoms of severe underarm sweating in adults. Additionally, Botox Cosmetic is used to temporarily improve the appearance of moderate-to-severe facial wrinkles in adults.

We note that Botox, which faces competition in the U.S. from Medicis Pharmaceutical Corp.’s (MRX) Dysport, posted sales of $398.9 million in the first quarter of 2012 (up 9.4% from the year-ago period).

Botox is the key product of Allergan, representing almost 30% of net product sales. Cosmetic and therapeutic indications contribute equally to total Botox sales.

Allergan expects Botox sales in the range of $1.7 billion – $1.8 billion in 2012. We believe that the 2012 Botox guidance is achievable considering the 78% share Botox enjoys of the $2.1 billion global neuromodulators market, which is growing at a rate of 16%.

We currently have a Neutral recommendation on Allergan. The stock carries a Zacks #3 Rank (Hold rating) in the short run.

The new annualized dividend rate of the company will be 96 cents reflecting growth of 4.3% from the prior annual dividend rate of 92 cents. The increase in the distributable income speaks of the company’s successfully executed investment growth strategy.

NiSource is working consistently to develop its infrastructure and to provide better services to its customers. The initiatives taken by NiSource are yielding positive results. The company registered a marginal year-over-year growth in the customer count during the first quarter of 2012.

The company continues to pursue infrastructural investment and modernization programs. In 2012, the company plans to invest $1.4 billion in growth projects. The company is also working on a system modernization plan, which might involve investment of $4 billion over a 10 to 15 year timeframe.

NiSource is a strong cash flow generator. NiSource’s net cash flow from operating activities in the first quarter of 2012 was $480 million, with $65.1 million used for dividend payouts.

We appreciate the initiatives taken by the company to increase shareholder value. The company is targeting a dividend payout in the band of 60% to 70% of net operating earnings per share. We believe NiSource is on the right track to achieve the targeted payout on the back of healthy cash generation and upgrade programs.

NiSource presently retains a Zacks #3 Rank, which translates into a short-term Hold rating. Another utility operator in the region Dominion Resources Inc. (D) announced a quarterly dividend of 52.75 cents per share, payable on June 20, 2012, to shareholders of record as of June 1, 2012.

Merrillville, Indiana-based NiSource is an energy holding company whose subsidiaries provide natural gas, electricity and other products and services in the U.S. Its operating companies provide energy to 3.8 million customers located within the high-demand energy region stretching from the Gulf Coast through the Midwest to New England.

The step echoes Starwood’s intent to make Middle East one of its prime international markets. Before this, Starwood shifted its headquarters for a month to Shanghai, China in June 2011 to beef up its portfolio in that country.

The group will look into Starwood’s business pattern in Middle East and understand the market more closely through interaction with local stakeholders, while exploring new properties throughout the country. Such moves help Starwood in going beyond its domestic boundaries and develop as a global entity.

Since the U.S. market is somewhat saturated, hoteliers are exploring foreign opportunities. Over 80% of the company’s 95,000 room pipeline will be built in international markets. Starwood cited enormous growth potential in the Middle East, which is a compelling investment proposition given its rising importance as a global business and leisure hub. Also, its status of an important outbound travel market has made it a destination for upscale branded hotels.

Dubai itself has 15 Starwood hotels, the largest that the company has in any single city apart from New York.  Management is especially keen on opening properties in Dubai as it connects emerging markets with the developed world. This is indicative of Dubai’s fast growing travel market.

We see this as the reason behind Starwood management’s keenness on local market knowledge. The company plans to open five more hotels in Dubai by 2017, including the entrances of the W and St. Regis brands.

At present, Starwood boasts of around 50 hotels in 11 countries in that region belonging to 8 of its 9 brands. It also has 30 hotels in the pipeline slated to open over the next 5 years. Once unveiled, these hotels will increase Starwood’s existence by 50% in Middle East.

Apart from the Middle East, Starwood is also big on North Africa, despite the political uncertainty there. On the whole, the Middle East and North Africa (MENA) region accounts for 70 Starwood properties with 40 in the pipeline. The other markets that Starwood is eyeing for expansion apart from MENA are China, Brazil and India.

Geopolitical issues in MENA are improving. While fragile business environment is still noticed in countries like Egypt, Saudi Arabia and the Gulf area are giving strong performances. Sub-Sahara in Africa is yielding solid double-digit growth, and management expects RevPAR growth to accelerate in this region in the second quarter.

Starwood which competes with the likes of Marriott International Inc. (MAR) currently retains a Zacks #2 Rank, which translates into a short-term Buy rating. We are also maintaining our long-term Neutral recommendation on the stock.

Bedrock Food Company Pvt Ltd, a leading corporation specializing in restaurant operations, boasts of considerable local market knowledge. The company also has the development right for Subway and is spreading the brand in parts of North, West and South India. Bedrock operates approximately 185 Subway restaurants, indicating the managerial efficiency of the company in that region.

The latest alliance replicates Krispy Kreme management’s intent to make India one of the prime markets for international expansion, considering stepped up economic growth and under-penetration of quick-service restaurants in that country as against the saturated North American countries. Additionally, Bedrock Food Company sees coffee and doughnuts as flourishing category in India over the next couple of years. It also believes that Indians have a preference for sweet food.

However, the Indian market is not free from competition. Following the rising demand for coffee products, another U.S. coffee behemoth Starbucks Corporation (SBUX) is about to storm the market. Starbucks is slated to launch in India by the end of August. Also, apart from local confectioneries and brewers, many other U.S. restaurateurs are currently serving the market. 

Presently, Krispy Kreme’s coffee and doughnuts are available in over 690 stores in 21 countries around the globe. According to management, the company’s overseas expansion is expected to be more in 2013 than in 2012. Encouraged by immense growth in international exposure in the last six years, the company seeks to almost double its current overseas store base within 2017.

At the end of fourth quarter 2011, the company had 460 international stores. It is also under agreements to open 270 locations in nine different countries. Comparatively, Krispy Kreme has fewer domestic properties. In order to fulfill the target of opening 900 international outlets by 2017, the company remains in the constant process of identifying further possibilities outside the U.S. It is concentrating specifically on Europe, Russia, India, China, Central and South America apart from spreading in existing markets.

We believe the company’s extended global reach bodes well for its financials. On the flip side, there is some fear of deterioration in international comparable store sales from cannibalization by the new stores. Krispy Kreme currently retains a Zacks #4 Rank, which translates into a short-term Sell rating. We are also maintaining our long-term Neutral recommendation on the stock.

The company’s first quarter results showed steady improvement from the prior-year quarter aided by strong performance in global exploration and deepwater activity as well as efficiency in operations.

In the international arena, we expect activity levels to increase going forward. In the first quarter, international growth was driven by deepwater and exploration activity in Nigeria, Angola and East Africa, and land activity in the Middle East and North Africa. Promising indications from Iraq, Saudi Arabia, offshore Norway, Mexico, Brazil, Argentina, Ecuador, Canada and Indonesia should continue to improve the company’s top line going forward.

We believe Schlumberger's combination of balance sheet strength, technological leadership and management focus will be beneficial in the long term. We also believe the company is favorably positioned to benefit from the current trends in oilfield services, given improving activity levels and the greater need for stimulation and completion of services in North America.

Schlumberger expects an increase in technology introductions throughout 2012, a rise in the pricing of seismic and high seismic vessel utilization and a continuous shift towards performance-based contracts. The new alliance with Petrofac also bodes well for future growth in margin and market share.

However, Schlumberger's financial and operational performances face a number of headwinds, including changes in exploration and production spending patterns, commodity price fluctuations, geopolitical risks, regional spending trends, competition, the emergence of new technology and changes in economic conditions. Additionally, foreign currency fluctuation is a threat to the company's profitability.

While Schlumberger hopes to gain more market share than its peers in 2012, we expect pricing and margins to remain restricted in North American pressure pumping as new capacity continues to enter the market. Further, weak natural gas prices have affected the demand for gas-directed activity in North America. As Schlumberger has vast exposure in the region, its share prices may be depressed going forward.

Schlumberger holds a Zacks #3 Rank, which translates to a Hold rating for a period of one to three months. The company faces competitive threats from Baker Hughes Incorporated (BHI).

Over time, Rio’s key growth strategy has been its industry-leading portfolio of growth projects and continued acquisitions. This has been supported by massive metals and mineral demand due to ongoing industrialization and urbanization among emerging markets.

The company’s continued investment in industry-leading, cost-trimming technology looks impressive and is expected to increase automation while improving its productivity in the coming years. Moreover, the company’s long-life, cost-competitive and expandable assets add value to the stock.

However, a highly competitive metals and mineral market pose serious threats; such a cutthroat environment may dampen the company’s growth prospect. Moreover, the current instability in the macro economy and a slower-than-expected global demand remain matters of concern.

The company faces execution risk due to resource nationalism, governmental delays on mining permit issues, tax policies and natural disasters. Moreover, any improvement in iron ore grade, which have been declining globally, is expected to raise production costs.

Adding to this, significant volatility in currency prices, higher energy costs and mining cost inflation may affect margins and reduce earnings as well.

Rio Tinto’s business activities are spread across the world but the company has a strong base in Australia and North America, with significant businesses in South America, Asia, Europe and southern Africa. The miner competes with global mining giants including BHP Billiton Ltd (BHP) and Vale S.A. (VALE).  Rio Tinto carries a Zacks #4 Rank, which translates into a short-term (1-3 months) Sell rating.

Fourth Quarter Overview

Marvell Technology delivered a mediocre fourth quarter 2012 with its bottom line beating the Zacks Consensus Estimate by 4 cents, but top line missing. The quarter’s EPS was 55.3% below the year-ago level, mostly due to lower revenue and higher expenses.

Revenue declined year over year but was on par with the company’s expectations. Overall results were affected by macro uncertainties, natural calamities (earthquake in Japan and massive floods in Thailand), lackluster mobile business in China and product transitions at one of Marvell’s largest customers.

Higher commodity costs and foundry prices, as well as investments in product launches led to margin contraction.

Despite the weak results, management was upbeat about its existing and newly launched products, which are competitive enough to benefit from the revival in demand.

First Quarter Guidance

Marvel expects an improvement in each of the end markets in fiscal 2013 based on post-flood recovery and improving China TD business, SSD and networking businesses. Marvell also expects the mobile and wireless end market to decline by high single digits. Considering the factors, the company expects first quarter 2013 revenue to be flat to up 6% sequentially.

Non-GAAP EPS is estimated roughly at 20 cents (+/- 2 cents). GAAP EPS is expected to be lower than the non-GAAP estimate by about 7 cents (+/-1 cent). The Zacks Consensus Estimate for the first quarter is 16 cents.

Agreement of Analysts

According to the analysts, Marvell is well positioned to increase its share at Hitachi Ltd. and Seagate Technologies (STX). They expect the design wins with these two companies to become a material revenue driver for Marvell over the coming years.

Analysts believe that there are growth opportunities in solid state drive (SSD) controllers, China TD/HSPA basebands, combo chips for handsets and game consoles, and application processors in Google (GOOG) TV and MS Kinect (a motion sensing input device from Microsoft [MSFT]).

Marvell has launched new SSD controllers, which can be used in Ultrabooks. Growing demand for next-gen laptops or ultrabooks is a reason to cheer for as Marvell could collect huge orders and drive revenue growth, moving forward.

Moreover, the analysts have positive expectations for the second half of calendar 2012. They are also optimistic on the company’s aggressive share buyback plans, but lackluster demand and a potential supply cut at its major customer, Research In Motion Ltd. (RIMM), keep them cautious.

Out of the 13 analysts providing estimates for the first quarter and fiscal 2013, none made any revision in the past 7 days. This indicates that the analysts are positive but are maintaining their estimates till the improvements become visible.

Magnitude of Estimate Revisions

We observed no movement in the Zacks Consensus Estimate for the first quarter and fiscal 2013 in the past 30 days. However, in the last 90 days, the Zacks Consensus Estimates for the first quarter and fiscal 2013 increased from 14 cents and 99 cents to 16 cents and $1.02, respectively.

The upside in our estimates indicates Marvell’s affirmative guidance and improvements in its core businesses.

Recommendation

Marvell Technology’s strong execution and exposure to the booming mobile computing market or tablets are encouraging. But we remain apprehensive about stiff competition in the semiconductor market from major players such as Intel Corp. (INTC), Texas Instruments Inc. (TXN) and LSI Corp. (LSI). A significant number of pending lawsuits and the company’s European exposure also concern us.

Currently, Marvell Technology has a Zacks #3 Rank, implying a short-term Hold recommendation.

The new discovery is located 20 miles (32 kilometers) to the northwest of the Prosperidade complex. This new discovery followed the one made at the Prosperidade complex in Offshore Area 1 of Mozambique with recoverable natural gas resources of 17 to 30 trillion cubic feet (“Tcf”).

The new well was drilled at a depth of 14,885 feet (4,537 meters) in 3,370 feet (1,027 meters) of water. This discovery is expected to add 7 to 20 Tcf of recoverable resources over a period of time.

Anadarko operates jointly with five other companies in Offshore Area 1 of Mozambique and has a working interest of 36.5%. The working interests of the other co-owners are as follows: Mitsui E&P Mozambique Area 1, Limited (20%), Empresa Nacional de Hidrocarbonetos, ep (15%), BPRL Ventures Mozambique B.V. (10%), Videocon Mozambique Rovuma 1 Limited (10%), and Cove Energy Mozambique Rovuma Offshore, Ltd. (8.5%).

The consortium is planning to drill further to evaluate the newly discovered prospect and carry on its exploration activities in the southern and northern part of Offshore Area 1.  After completing the work at Golfinho, the partnership is planning to mobilize the Belford Dolphin drillship to spur exploration activity at the Atum-1 exploration well.

Anadarko has been operating in Mozambique with drilling success in Lagosta and Camarão. It is continuously improving its overall portfolio on the back of its drilling successes in Mozambique, Gulf of Mexico and Ghana. Recently, Anadarko teamed up with Linn Energy, LLC (LINE) to develop the Salt Creek field in Wyoming's Powder River Basin.

At present, global oil and gas companies are teaming up with local players to discover the unexplored reserves in Asia and Africa and Anadarko has also joined this international bandwagon. Besides Mozambique, the company is expanding its operations at Deepwater Tano and West Cape Three Points in Ghana, and Block SL-07B-11 in Sierra Leone.  

There has been a surge in natural gas demand given its clean-burning nature. We expect that the power generation companies will use natural gas as fuel in place of coal, thus increasing its consumption.

Anadarko Petroleum Corporation currently retains a Zacks #3 Rank, which translates into a short-term Hold rating.

The Woodlands, Texas-based Anadarko Petroleum Corporation is primarily engaged in the exploration, development, production, gathering, processing and marketing of natural gas, crude oil, condensate and natural gas liquids.

The merger was completed for a cash consideration of approximately $2.7 billion. The acquisition price translates into a substantial premium of 42% over and above Delphi’s book value of $1.9 billion as of March 31, 2012. Delphi shareholders have been awarded a special dividend of $1 per share.

Delphi’s stock traded on the New York Stock Exchange for the last time on May 15, 2012.  It would be made unavailable for trading before the opening bell on May 16 and de-listed later on.                                                              

Despite being a wholly-owned subsidiary of Tokio Marine, Delphi will continue to operate on its own. It will work in tandem with Philadelphia Insurance, another U.S. subsidiary of Tokio Marine. Though both companies will serve the same markets, there will be no conflict of interests as their products will be different from each other.

The deal which was announced in December 2011, had earlier faced opposition from Delphi’s shareholders who claimed that that the deal was structured in a way that Class B shares, held by Delphi’s CEO Robert Rosenkranz, would fetch a higher payout in comparison to Class A shares.

In January 2012, the agreement was tagged as unfair and consequently the shareholders sued the company in Delaware Chancery Court, Wilmington to stop the sale, on account of the provisions regarding “disparate consideration.”

The judge ruled that the plaintiffs may continue with their litigation. However, they could vote since they were already receiving a premium for their share. The judge also stated that discontented shareholders had the right to receive monetary compensation for Rosenkranz’s actions. 

Consequently, at a special meeting held in March 2012, Delphi received approval from its shareholders with 86.1% of them voting in favor of the sale.

Delphi expects to pay its Class A shareholders a monetary compensation amounting to $49 million related to legal settlements. The liability is, however, contingent to approval from Delaware courts, due in late second half of 2012.

Following the announcement of completion of the acquisition, Fitch Ratings sprang into action and upgraded the ratings of Delphi and its subsidiaries. The rating agency upgraded Delphi’s issuer default rating (IDR) to “A-“ from “BBB”, senior notes due 2020 to “BBB+” from “BBB-“and junior notes to “BBB+” from “BB”. 

The issuer financial ratings of Delphi’s chief operating subsidiaries – Reliance Standard Life Insurance Co., First Reliance Standard Life Insurance Co. and Safety National Casualty Corp. were all raised to “A+” from “A-“. All the ratings have been revised from positive to a stable outlook.

Fitch’s decision to raise Delphi’s ratings is based on the premise that the company will be able to sustain the current capital levels of its subsidiaries. Moreover, Delphi will also have the capital strength of Tokio Marine to fall back on. 

Fitch views that Delphi fits very well within Tokio Marine strategic goal of expanding in the U.S. insurance market. Given Delphi’s niche presence in the excess workers’ compensation and group disability insurance markets in the U.S., the rating agency believes that Delphi may gradually become a core operating subsidiary of Tokio Marine.  

Featured Post

BAILOUT II

Here we go again.  Four years ago with the Treasury Department and The Federal Reserve loaded down with Goldman Sachs (GS) people.  They went to Washington and confessed that they had screwed up the global economy and most Americans lives and they needed a massive infusion of taxpayer money to save us all.  

The subtext was: "Does any Republican or Democrat want to go into the election season with the second great depression already a foregone conclusion?  And oh by the way we really want to get rid of Lehman." 

Can we view this week's announcement by JPMorgan Chase (JPM) as the opening salvo in this election seasons raid on the taxpayers funds?  So when John Boehner threatens a government shutdown just before the election, is that the second salvo in their raid on the Treasury? 

We will see just how gullible we really are!

The most recent picks by «richardterrel» are:
A buy rating on SPDR S&P Dividend (ETF) (SDY),
a sell rating on Apple Inc. (AAPL) and
a buy rating on Myers Industries (MYE).

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The vehicle will be available in more than 140 markets, with Mexico and Canada the first to introduce it in the fourth quarter of 2012. There is, however, no immediate need to launch Chevrolet Trax in the U.S. and Canada since Chevrolet Equinox, a car similar in size, already occupies a leading position in these two markets.  

Besides Trax, Chevrolet has recently launched new Malibu mid-sized cars, Colorado mid-sized pickup trucks, TrailBlazer SUV and Cruze Station Wagon.  With its entry into the SUV segment, Trax offers Chevrolet the required flexibility, toughness and fuel economy, exhibiting the standards of expensive vehicles.

General Motors posted first-quarter 2012 adjusted earnings per share of 93 cents, down 2 cents from the year-ago quarter. The results beat the Zacks Consensus Estimate of 84 cents. The year-over-year decline in profit was attributable to lower profits from the company’s European operations.

Revenues went up 4% to $37.8 billion in the quarter, driven by a 3% rise in unit sales (to 2.3 million vehicles globally). It was higher than the Zacks Consensus Estimate of $36.4 billion.

With its record sales in fiscal 2011 and first quarter of 2012 and new product lines, the company would now concentrate more on meeting customer requirements and enhance future performance.

Detroit, Michigan-based General Motors Company is a leading global automotive company. The company along with its strategic partners, produces, sells and services cars, trucks and parts under four core brands –Chevrolet, Buick, GMC and Cadillac. It also assembles passenger cars, crossover vehicles, light trucks, sport utility vehicles, vans and other vehicles. The company’s major competitors are Ford Motor Co. (F) and ToyotaMotor Corporation (TM).

General Motors currently retains a Zacks #3 Rank, which translates into a short-term (1 to 3 months) Hold rating. The company has growth opportunities from the emerging markets. Sales will also be boosted by the rising demand in the industry and diversified lineups.

However, high debt level and the Euro-zone crisis have weighed on General Motors. Taking these factors into account, we currently have a long-term (more than 6 months) Neutral recommendation on the stock.

Capitol Tower covers a four-block area with one 15-story tower with 203 units and 206 separate villa units around the tower. There is further scope for expansion as the area is allotted for 1,290 villa units. The tower also consists of 6 ground-floor retail units and modern amenities such as groceries, dry cleaning and other conveniences.

Capitol Towers is a valuable acquisition for Kennedy Wilson as it is perfectly placed to serve the Sacramento central business district (CBD). According to Meyers Research, a market research firm, market rents for Sacramento metropolitan statistical area (MSA) increased 2.2% in 2011 and further by 1.0% in the first quarter of 2012. Additionally, Real Estate Investment & Services (REIS), a private research firm, predicts a four-year cumulative rent growth of 32% for the MSA.

The deal is also consistent with Kennedy Wilson's policy of acquiring projects in high density areas with a transportation hub and proximity to job center. It is located close to the Capitol Mall and State Capitol, an area that supports over 100,000 office and government workers.

With this deal, Kennedy Wilson has increased its multi-family portfolio to 13,876 units, which includes deals currently under contract.

Headquartered in Beverly Hills, California, Kennedy Wilson offers a wide array of real estate services including auction, conventional sales, property services, research and investment management with 23 offices in the U.S., Europe and Japan. As of March 31, 2012, the value of the real estate assets under the company’s management stood at $11.8 billion.

Kennedy Wilson currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. We have a long-term Neutral recommendation on the stock. One of its competitors, CBRE Group, Inc (CBG) holds a Zacks #2 Rank, which implies a short-term Buy rating.

Additionally, S&P raised the long-term CCR and FSR of two other Health Net subsidiaries – Health Net of Arizona Inc. and Health Net Health Plan of Oregon Inc. – to “BBB-” from “BB+.” The rating agency also maintained a stable outlook on all the ratings, which indicates low possibility of a rating change within a year. However, any significant weakening of the financials or a substantial non-operating expense could lead to downward revision of the ratings.

The strong ratings reflect Health Net’s profitable business mix as well as strong risk profile, which offset concerns related to the limited geographic expansion and product portfolio. The company’s current non-risk to risk business ratio stands at 27:23.

Moreover, Health Net’s operating efficiency leads to steady income as well as strong cash flows. Additionally, the TRICARE contract facilitates strong cash flow generation, while the earnings before interest, taxes, depreciation and amortization (EBITDA) coverage, interest coverage and fixed charge coverage ratios remain impressive. The strong ratios and cash flows support the retention of the CCR assigned to the company.

Currently, the Zacks Consensus Estimate for Health Net’s second-quarter 2012 earnings stands at 69 cents per share, down 9.5% year over year. 10 of the 13 estimates moved downward in the last 30 days, while no upward revision was witnessed.

For 2012, the Zacks Consensus Estimate is pegged at $2.25 per share, down 27% year over year. Health Net competes with WellPoint Inc. (WLP) and UnitedHealth Group Inc. (UNH).

Currently, Health Net carries a Zacks #4 Rank (short-term Sell rating), implying a slight downward pressure on the shares in the near term. Considering the fundamentals, we are also maintaining our long-term Neutral recommendation on the stock.

The Naval Facilities Engineering Command (NAVFAC) of Southwest and Atlantic areas are supported by the EMAC and includes the U.S. trust territories of Puerto Rico and Guam. The main aim of EMAC is to restore the sites, which have been contaminated.

Remedial actions, removal actions, and remedial design; operation and maintenance services; pilot and treatability studies; and other actions required for the restoration work are among the task of Tetra Tech EC. The contract is for a period of one year and has the option to be extended four times by one year. This is a indefinite delivery/indefinite quantity contract and is of a firm-fixed-price nature.

Tetra Tech Inc. is a leading provider of consulting, engineering, program management, construction and technical services focusing on resource management and infrastructure. It serves clients by providing cost-effective and innovative solutions to fundamental needs for water, environmental and alternative energy services. Major competitors of Tetra Tech are Arcadis NV, Shaw Group Inc. (SHAW) and URS Corporation (URS).

We currently maintain our Neutral rating on Tetra Tech Inc. with a Zacks #2 Rank (short-term Buy recommendation) over the next one-to-three months.

Wells Fargo contends that it cannot be sued under the California law for any of its practices related to debit-card transactions. In fact, its practices come under the purview of federal laws, which permit its own procedures for calculating such fees.

The Allegations

It was way back in 2007 when customers lodged a complaint for charging improper overdraft fees by Wells Fargo. The company was alleged to have manipulated transaction entries to generate greater overdraft fees. Transactions were re-sequenced by the bank so that the largest withdrawals were deducted first instead of being cleared in the order in which they were received.

As a result, customers’ balances dwindled faster, resulting in a larger number of ‘overdrawn’ transactions, each of which then became chargeable. Moreover, as a result of such practices, funds were overdrawn several times a day in small amounts.

In 2010, three customers of Wells Fargo, who sued the company on behalf of several customers in California, achieved victory. Consequently, the U.S. District Judge consented to the allegations of the customers and concluded that the practice was a fraudulent one. The company was ordered to pay $203 million to such account holders who were thrashed with multiple overdraft fees.

The Cat Fight

The lawyer for the plaintiffs argued that the practice was improper and was intended to boost the company’s overdraft fees. Moreover, the lawyer also argued that there exist limits to its authority, which has been recognized by the Office of the Comptroller of Currency and the federal agency, and such limits come under the purview of California law.

However, the lawyer for Wells Fargo argued that customers were aware of such practices and such clauses were their in the account agreement that was permitted by the Regulators including the Federal Reserve.

Yet again, another lawyer on behalf of the customers argued they were deluded about the policy by Wells Fargo. He said that the advertisement of automatic deduction of debit transactions from the account of a customer made them understand that the posting of withdrawals would be made in a chronological order.

Moreover, he argued that the claim made by Wells Fargo that it cannot be taken to trial based on the unfair business practices law of California was dubious as only allegations that get in the way of operations of the bank are pre-empted by federal regulation of banks.

Our Take

We believe that fraudulent practices of any bank need to be judged well and if found that the customers were cheated of their hard earned money, then they need to be compensated.

Now, if Wells Fargo can make its way through its claims and reverse the order, then that will limit draining out of the company’s money as a penalty. However, several banks have been sued on similar grounds. Notably, Bank of America Corp. (BAC) and JPMorgan Chase & Co. (JPM) have consented to paying millions to settle such claims in the past one year. So what happens to Wells Fargo over this litigation will be closely followed.

Wells Fargo retains a Zacks #3 Rank, which translates into a short-term Hold recommendation. Considering its fundamental, we also have a Neutral recommendation on the stock.

Losses were again heavy in the financial sector, with all of the major banks suffering once more in Wednesday trading. Tech also saw weakness along with many names in the basic materials space, while consumer goods, health care and staples led the way on the upside (see Try Value Investing With These Large Cap ETFs).

In currency trading, the U.S. dollar continued to rise against the world’s major currencies, led by more gains against the pound and the euro. Nevertheless, Treasury bill trading was flat, as the 10 Year note saw yields decline by a single basis point while rates rose along the short end of the curve.

Commodity trading was much more volatile in the session as oil products fell across the board while natural gas stormed higher once again with a 5.2% gain. Agricultural commodities, on the other hand, were more mixed as losses in soft commodities balanced out with strong performances in many of the grains. Meanwhile, metals continued to face weakness, especially in the case of silver as the white metal declined by 3.3% on the day.

ETF trading was relatively heavy across the board as many products saw solid volume in the volatile session. An above average number of shares changed hands in many of the industry’s most well-known products while those in the leveraged, international, and short segments saw a great deal of interest.

In particular, investors saw a huge increase in trading for the SPDR S&P China ETF (GXC). The fund usually sees volume of about 173,000 shares but experienced a spike up to 1.8 million shares in Wednesday’s session (read Forget FXI: Try These Three China ETFs Instead).

The move came as several other China funds saw outsized trading volume days although few even came close to GXC on the session. In terms of timing, the vast majority of the activity came in the second half of the session although it helped to drag the fund lower, pushing GXC down about 2.2% for the day.

Another fund that experienced a big jump in interest was the SPDR Global Dow ETF (DGT). The product usually sees just 7,500 shares change hands in a normal session but saw a spike to 92,000 shares in Wednesday’s trading.

This spike was obviously far greater than other globally-focused ETFs and was largely due to a huge block trade in the product. In the first half hour of trading, investors saw about 86,400 shares change hands, a figure that comprises nearly all of the product’s volume for the day. In fact, the ETF didn’t trade for much of the day until some light volume in the final hour of the session.

Nevertheless, the product finished the day down about 0.4%, in-line with many other products in the space although this ETF produced less in losses thanks to its more large cap focus (read Five Great Global ETFs For Complete Equity Exposure).

(For more on ETFs check out the Zacks ETF Center)

Safeway has an effective capital deployment policy in place and strives to benefit shareholders through dividend payments and share repurchases. During the first quarter, the company repurchased 46 million shares for $1 billion. It additionally increased its share repurchase authorization by $1.0 billion to $1.1 billion.

Despite the prevailing volatile macro environment, Safeway possesses high earnings visibility, consistent cash generation ability and disciplined investment. At the end of the first quarter of 2012, Safeway had $134.5 million in cash and cash equivalents compared with $729.4 million at the end of 2011.

The company’s free cash flow in the first quarter declined to negative $224 million from positive free cash flow of $112 million due to higher capital expenditure of $308 million ($185 million in the year-ago quarter). In 2012, Safeway expects around $900 million in capital expenditures with free cash flow in the range of $850–$950 million.

However, with the completion of Lifestyle transformation program, we believe that Safeway’s capital expenditure will decline going ahead. We expect Safeway’s cash position to improve in due course, thus enabling the company to pay further dividends, repurchase shares and reduce its debt. 

We are also of the opinion that the board’s decision of boosting dividend reflects the company’s sound fundamentals, even amidst sluggish revenue growth resulting from fuel and food inflation.  

However, retail inflation is rapidly gaining momentum and Safeway may find it difficult to pass on increased prices to its customers due to stiff competition. This tough scenario has resulted in certain consumers trading down to a less-expensive mix of products or searching for discounts on grocery items, which in turn have impacted Safeway's sales.

The company expects these difficult economic conditions to continue for some time. The company confronts a wide spectrum of competitive threats, especially from players like SUPERVALU Inc (SVU), The Kroger Co (KR) and Wal-Mart Stores (WMT). Safeway currently retains a Zacks #3 Rank (short-term Hold rating). Over the long term, we are Neutral on the stock.

With the deal, Jones Lang has further cemented its strategic ties and reinforced the business relationship with Procter & Gamble that had originated in 2003, when the two companies joined together to pioneer service delivery approaches and technology-supported platforms to excel competitive pressure.

Under the terms of the new agreement, Jones Lang would provide integrated facility management, project development, construction management and strategic occupancy planning services for all the owned and lobal leased corporate facilities portfolio of Procter & Gamble, spanning over 60 countries across 6 continents including North America, South America, Europe, Africa, Asia and Australia. 

Several positives weighed in favor of Jones Lang in outsmarting competitors in the race to be adjudged the best in its business by Procter & Gamble, including its unrivalled track record of superior service delivery, flexible global service model and dedication to using facilities and real estate investments as a competitive advantage for the consumer goods company.

That the two companies have already worked in tandem for over eight years to successfully achieve individual corporate goals by optimizing real estate investments also helped.

Going forward, in order to meet increased customer expectations and probably exceed them, Jones Lang has decided to focus on driving productivity and innovation at Procter & Gamble through real estate portfolio optimization, total workplace design, and advanced analytics.

This, in turn, is expected to augment the revenue of Jones Lang’s Corporate Solutions business, which primarily helps companies to form outsourcing partnerships with third-parties to manage and execute a range of occupier services, thereby improving their own productivity and profitability. The strategic alliance, therefore, is a win-win solution for both the participating companies.

Chicago-based Jones Lang provides corporate, financial and investment management services to corporations and other real estate owners, users and investors worldwide. A broad real estate product and service range, and extensive knowledge of domestic and international real estate markets enable the company to operate as a single-source provider of real estate solutions.

With about 200 corporate offices across the globe, Jones Lang operates in more than 1,000 locations in 70 countries. Jones Lang is an industry leader in property and corporate facility management services, with a portfolio of approximately 2.1 billion square feet worldwide.

LaSalle Investment Management, the company’s investment management business, is one of the largest and most diverse in the real estate sector with nearly $47.2 billion of assets under management.

Jones Lang continually invests in industry-leading research to identify emerging trends and anticipate future conditions to respond to the shifting market and business trends of its clients. This enables the company to develop new investment products and services tailored to the specific investment goals and objectives of its clients, thereby maintaining profitable long-term relationships during challenging market conditions. The company also has a strong balance sheet that provides it with an operating flexibility to protect and enhance market positions.

We maintain our Outperform recommendation on Jones Lang, which presently has a Zacks #1 Rank translating into a short-term Strong Buy rating.

Additionally, Fitch reaffirmed the short-term IDR of Hartford at “F2” and insurer financial strength rating (IFS) of the company’s subsidiaries at “A-.” Moreover, the rating agency assigned a stable outlook to all the ratings.

However, on maintaining a financial leverage ratio at around 20%, holding company cash of over $1 billion and interest preferred dividend coverage at 6x, an upgrade in the debt ratings of the company is likely.

On the other hand, a rating downgrade is possible if the company’s financial leverage ratio stays above 25%, the holding company cash balance deteriorates significantly, interest and preferred dividend coverage does not improve or the company suffers substantial investment or operating losses, thereby impacting the shareholders' equity or statutory capital.

Hartford’s strong financial results, satisfactory financial leverage, considerable cash balance and limited credit and investment risks were primarily responsible for the rating upgrade. The ratings also reflect the impact of the recent structural changes in the company.

In March 2012, Hartford announced its decision to divest its Individual Life and Retirement Plans segments along with Woodbury Financial Services. The company also decided to terminate its Individual Annuity business, which has consequently been included in the Runoff Operations division effective second quarter of 2012. The structural changes are intended to increase Hartford’s focus on its property and casualty (P&C), Mutual Funds and Group Benefits segments.

Fitch considers the execution risk associated with the changes to be manageable, while a successful execution is expected to be beneficial for Hartford as it will not only boost the cash balance but also enhance financial flexibility. Increased hedging of the Japanese variable annuity and satisfactory equity credit adjusted financial leverage ratio are other positives for the company.

However, earnings growth in the medium term is expected to be adversely affected by higher hedging costs and compressed margins in the Runoff Annuity and non-core Life Insurance businesses. Loss ratios in the Group benefits business are also expected to continue growing, while income from the P&C business is expected to decline due to price competition.

Fitch considers Hartford’s subsidiaries -- Hartford Life & Accident Insurance Co. and Hartford Life Insurance Co. -- to be strategically “Important” for the company as it contributes a majority of its life insurance business. However, Hartford Life & Annuity Insurance Co. is placed in the “Limited Importance” strategic category as the Variable Annuity business constitutes a majority of this unit.

Hartford, which competes with insurance companies like American International Group (AIG) and MetLife Inc. (MET), is one of the largest multi-line insurance and investment companies in the U.S. Currently, the shares of the company carry a Zacks #3 Rank (short-term Hold rating). Considering the fundamentals, we maintain a long-term Neutral recommendation on Hartford.

Varian is a leading manufacturer of radiotherapy systems for treating cancer and a supplier of X-ray tubes to Original Equipment Manufacturers (“OEMs”) for diagnostic imaging. It also has an “Other” segment, which comprises the Varian Particle Therapy business, the Security and Inspection Products business and the Ginzton Technology Center.

The company is well positioned to expand sales and order bookings through regular product upgrade cycles and further penetration in under-equipped international markets.

In Oncology Systems, Varian introduced the TrueBeam system for image guided radiotherapy, which is expected to expedite replacement of the company’s older systems. TrueBeam currently constitutes over 45% of Varian’s high energy accelerator orders. Since its inception in April 2009, Varian has booked about 490 orders for TrueBeam, of which 230 installations have been completed or represent work in progress.

Varian’s X-Ray Products business had a moderate quarter with revenues increasing 4% year over year. Revenue from the Other category increased $9 million to $32 million, driven primarily by revenues from the installation of the Scripps Proton system.

Varian is a leading manufacturer of integrated radiotherapy systems for treating cancer and a premier supplier of X-ray tubes for diagnostic imaging applications. The company operates in a technology-driven environment where success depends on the use of new technology, product development and upgrades. In the radiation oncology market, Varian competes with Accuray (ARAY).

Varian is poised to increase its market share in radiation oncology. It is currently enjoying healthy demand for its TrueBeam technology, which is meaningfully contributing to its net order oncology growth.

Moreover, Varian enjoys a strong balance sheet marked by low debt and sizeable cash. The company uses a part of its healthy cash flows for share repurchases.

However, Varian competes with larger players in a technology-intensive industry. Further, uncertainties stemming from health care reform and a still weak hospital capital spending environment across many developed countries, especially in Europe, are significant challenges. We are currently Neutral on the stock. The stock currently retains a Zacks #4 Rank, which translates into a short-term Sell recommendation.

First Quarter Highlights

On a GAAP basis, quarterly net loss was $17.4 million or 8 cents per share, compared with a net income of $38.6 million or 16 cents per share in the year-ago quarter. Adjusted EPS of 5 cents missed the Zacks Consensus Estimate of 7 cents.

Quarterly net revenue of $409.2 million was down 10.1% year over year, well below the Zacks Consensus Estimate of $420 million. Operating loss was $7.6 million compared with an operating income of $12.6 million in the prior-year quarter.

Agreement of Analysts

Of the two analysts covering the stock in the last 7 days, none of the analysts have revised the estimates upward or downward for the fourth quarter of 2012. Similarly, for the first quarter of 2013, out of the two analysts covering the stock, none have revised their estimates.

Similarly, for fiscal 2012 and 2013, out of the two analysts covering the stock in the last 7 days, none have revised their estimates.

Currently, the Zacks Consensus Estimate for the fourth quarter of fiscal 2012 is 9 cents, with a projected annual decline of 43.75%. For the first quarter of fiscal 2013, the Zacks Consensus Estimate of 14 cents indicates an annual growth of 35.00%.

Magnitude of Estimate Revisions

During the past 7 days, the current Zacks Consensus Estimate for the fourth quarter of 2012 and the first quarter of 2013 has been in line with the previous estimates of 9 and 14 cents respectively. Similarly, for fiscal 2012 and 2013, the current Zacks Consensus Estimate remains in line with the previous estimates of 38 and 77 cents, respectively.        

Earnings Surprises

The company has fallen short of the Zacks Consensus Estimates in two out of the four previous quarters. In the first quarter of 2012, the company’s reported earnings were in line with the Zacks Consensus Estimate, while it fell short by 2 cents or 28.57% in the third quarter of 2012.

The estimates for the fourth quarter of 2012 and the first quarter of 2013 are in line with the Zacks Consensus Estimates. Similarly, fiscal 2012 and 2013 estimates are in line with the Zacks Consensus Estimate.

Our Recommendation

Going forward, we believe that as a supplier of fiber optic components for high speed communication network, JDS Uniphase will benefit owing to the increased broadband penetration and rapidly growing internet subscriber.

Diversification in non-telecom areas like commercial laser, currency pigments, 3-D cinema and more will act as a growth catalyst for the company. Additionally, the acquisition of Agilent Technology Inc’s (A) Network Solution Division has increased its market size considerably.

However, we remain concerned about the slowness of the U.S. economic growth and a slow carrier spending situation in Europe and U.S. which might act as impediments to the future growth of the company. Recently, the optical gear manufacturing is going through a consolidation phase which we believe might create headwinds for JDS Uniphase.

Moreover, the company faces stiff competition from Finisar corp. (FNSR), Oplink Communications Inc. (OPLK) and Oclaro Inc. (OCLR), which might jeopardize its growth.    

Considering these factors, we maintain our long-term Neutral recommendation on JDS Uniphase. Currently, JDS Uniphase has a Zacks #4 Rank, implying a short-term Sell rating on the stock.

About Earnings Estimate Scorecard

As a PhD from MIT, Len Zacks proved over 30 years ago that earnings estimate revisions are the most powerful force impacting stock prices. He turned this ground breaking discovery into two of the most celebrating stock rating systems in use today. The Zacks Rank for stock trading in a 1 to 3 month time horizon and the Zacks Recommendation for long-term investing (6+ months). These “Earnings Estimate Scorecard” articles help analyze the important aspects of estimate revisions for each stock after their quarterly earnings announcements. Learn more about earnings estimates and our proven stock ratings at: http://www.zacks.com/education/

The next person to head the company will have a challenging task of keeping costs under control, a problem Calgon Carbon faced in the first quarter this year. He or she will also need to sustain the top-line growth achieved by the company in the previous quarter.

Calgon Carbon’s revenues jumped roughly 10% from the prior-year quarter to $136.6 million in the first quarter of 2012. The bump in revenues was driven by improved demand for activated carbon product and services, increased sales of ballast water treatment systems and ion exchange equipment.

Revenues from equipment sales and consumer products displayed massive growth, jumping almost 77% and 37%, respectively. The company has identified these segments as its revenue drivers. The person who takes over from Mr. Stanik will thus have Calgon Carbon’s growth drivers laid out.

However, the challenge comes in the form of escalating costs. Calgon Carbon’s gross margin shrunk to 31.3% in the first quarter from 33.3% in the year-ago period. The company had to contend with higher plant maintenance expenses, unfavorable mix and raw material inflation in the first quarter.

Moreover, the company might see more challenges thrown its way due to a potentially worsening economic situation. Calgon Carbon is focusing on improving its margins and Mr. Stanik’s replacement will have to address the issue of rising costs if the company is to achieve its target.

The company sprung a positive earnings surprise of 16.67% in the most recent quarter, posting earnings of 14 cents a share as against the Zacks Consensus Estimate of 12 cents. However, its performance has not been reflected in the share price, with Calgon Carbon’s stock losing approximately 11% of its value since the turn of the New Year.

In addition, the stock trades perilously close to its 52-week low. Hence, the next person to lead the company will have the task of steering it through its cost problems and deliver value to shareholders.

We currently have a long-term Neutral recommendation on Calgon Carbon. The company, which competes with MeadWestvaco Corporation (MWV), holds a Zacks #3 Rank, which translates into a short-term Hold rating.

Prior-Quarter Synopsis

Applied’sfirst quarter 2012 pro forma earnings were above the Zacks Consensus Estimate due to higher revenue and lower-than-expected opex.

Revenue growth was weak in the Applied Global Services (AGS) segment, while all other business segments did better than expected. The softening at 200mm was the main reason for the decline in the AGS segment, and Applied expects this to continue through the first half of 2012.

Orders in the quarter were up 25.9% sequentially due to order improvement in the SSG and Display segments. The higher demand for TVs and mobile devices in SSG and Display were the main reasons for the increase. Gross margins also improved sequentially to 40.7% mainly on account of the richer mix of SSG.

Second Quarter Guidance

Applied now projects second quarter revenue to be up 5-15% sequentially, with SSG (including Varian) increasing 15-25% sequentially, AGS to be up 5-10%, Display being flat to down 25% and EES to be down more than 40%. The non-GAAP EPS is expected to come in at 20–28 cents a share. For the second quarter, the Zacks Consensus Estimate is pegged at 24 cents, below the guided range.

(Detailed earnings results can be viewed in this blog: Applied Guides Above Expectations

Agreement of Analysts

Out of the 17 analysts providing estimates for the second quarter, none made any revisions in the last 30 days. For fiscal 2012, only 1 analyst made a downward revision over the same 30-day time period.

A few analysts expect a decent second quarter with revenue and earnings in line with guidance of $2.4 billion and $0.24, respectively. They believe that pressure in both Display and Solar will be partially offset by growth in Silicon and a modest improvement in Service, helping results to match the guidance.

Also, a few analysts expect revenue to come in modestly above the mid-point of guidance, consistent with its peers including Lam Rearch (LRCX), Novellus Systems, Inc. (NVLS) and KLA-Tencor Corporation (KLAC). 

Additionally, the analysts believe Applied is benefiting from continued strength in the foundry market, as many of the key players have maintained or increased their levels of spending. In particular, Taiwan Semiconductor Manufacturing Co. Ltd. (TSM) has increased its capex guidance by more than 30% for 2012 at its 1Q12 earnings call.

With TSMC likely employing multiple patterning at its 28nm ramp, the analysts believe Applied’s CMP tools will be in high demand, given the additional steps and layers required in the chip manufacturing process. According to Gartner, Applied is the market leader in CMP equipment, with approximately 67% of the total market in 2011.

Magnitude of Estimate Revisions

In the past 30 days, there was no change to the Zacks Consensus Estimate for the second quarter and fiscal 2012.

Over the 90-day period, the Zacks Consensus Estimate increased 7 cents to 24 cents for the second quarter and 13 cents to 94 cents for fiscal 2012.

The recent strength in semi-cap orders and shipments could be the reason for the increase in estimates.

Our Recommendation

We expect a decent second quarter due to higher overall semiconductor equipment spending levels. Though we believe there is potential in the solar energy market over the long term, we remain cautious about the company's efforts since management has already missed several targets to bring its solar division to profitability.

Nevertheless, we remain positive on Applied’s strong position in the semiconductor market, the solar business in China, a vast portfolio and strategic relationships. The semiconductor business appears to be improving, both on account of strengthening end markets and the Varian acquisition.

Applied, which competes with other large equipment makers, such as KLA-Tencor, Lam Research and Novellus Systems, holds a Zacks #3 Rank that translates into a short-term Hold rating.

Chesapeake − the second largest U.S. gas producer after ExxonMobil Corporation (XOM) − faces a funding gap of $9 billion to $10 billion as natural gas prices hit a 10-year low early this year. The new loan comes at an initial interest rate of 8.5%, which could eventually exceed 11.5% if the company fails to pay it off by the end of the year.

In first quarter 2012, Chesapeake paid $195 million in interest expense. This amount could increase by $43 million over the next three months with the addition of new loan and after paying down the revolver, which takes 2.75% interest rate.

Meanwhile, ratings agency Standard & Poor's announced that it has slashed Chesapeake's credit rating to "BB-" from "BB.” This is the second time that the agency downgraded its rating on Chesapeake in recent months, highlighting concerns over the company's ability to finance its operations due to a wider gap between operating cash flow and capital expenditures.

This news hit Chesapeake's stock, with shares falling 5.6% to $14.65 on Tuesday. This is the worst fall for Chesapeake shares in more than three years.

Although Chesapeake plans to divest its assets in order to bridge the funding gap, this program might be delayed to ensure that terms and conditions set forth by its creditors are not jeopardized. However, this new loan will enable the Oklahoma-based company to pay off its debt as well as complete its asset sale program. The proceeds from planned asset sales will be utilized to repay the loan in full before the end of this year.

The addition of unsecured loan brings its liquidity to more than $4.7 billion including unrestricted cash on hand and available borrowing capacity under its revolving bank credit facilities.

Chesapeake is in the midst of a restructuring plan that intends to reduce its long-term debt to $9.5 billion by the end of the year through monetizing its assets and reducing in lease-hold spending, while transforming from a natural gas-focused producer to a more balanced liquids-focused producer.

Per the Zacks Consensus, Chesapeake’s earnings per share for the year 2012 and 2013 are estimated at $0.73 and $1.91, respectively. This represents a decline of 73.9% in 2012 and a growth of 161.3% in 2013.

Chesapeake holds a Zacks #3 Rank, which is equivalent to a Hold rating for a period of one to three months. Longer term, we maintain our Neutral recommendation on the stock.

Most of the major markets recorded a double-digit fall in new car registrations in the continent during the month, except Germany and U.K.

Sales in Italy dipped 18% to 129,663 vehicles, Spain plunged 22% to 56,250 units and France slid 1.9% to 166,552 units. However, sales in Germany scaled up 2.9% to 274,066 units and in U.K. rose 3.3% to 142,322 units.

All the major automakers except Daimler AG (DDAIF) and Bayerische Motoren Werke AG (“BMW”), posted declines in sales. Both Daimler and BMW benefited from higher sales of premium brands in Germany.

Among the U.S. automakers, General Motors Company (GM) posted an 11.1% fall in sales to 85,493 units, driven by lower Opel/Vauxhall (16.9%) and GM brand (50%) sales while Ford Motor Co. (F) saw an 8.3% drop in sales to 79,223 units.

Among the Japanese automakers, Toyota Motor Corp.’s (TM) sales ebbed 13.2% to 41,259 units and Nissan Motor Co. (NSANY) sales shrank 19.5% to 29,719 units. However, Korean automaker Hyundai Motor Co. (HYMLF) saw a 1.3% rise in sales to 35,977 units.

In Europe, the top automaker Volkswagen AG (VLKAY) reported a 5.2% decline in sales to 261,571 units driven by lower sales of the namesake brand (8.4%) and Seat brand (22.4%). However, both of its Audi and Skoda brands did well during the month with 4.4% and 4% rise in sales, respectively.

The second biggest Paris-based carmaker PSA Group (PEUGY) revealed a marginal 258 units fall in sales to 132,466 units due to a 4% decrease in Peugeot brand sales.

Meanwhile, the third largest automaker, Renault Group, saw a 15.1% decline in sales to 89,724 units. The company’s CEO, Carlos Ghosn, stated that automakers in Europe will continue to suffer if the government doesn’t allow them to restructure and downsize workforce. Sales at Fiat Group (FIATY) tumbled 11.3% to 75,462 units driven by lower sales of the namesake brand (10.9%) and Alfa Romeo (31.3%).

However, sales at the world’s largest luxury carmaker BMW rose 2.6% to 68,334 units while sales at Daimler grew 1.1% to 56,677 vehicles. The improvement in sales was led by strong demand for their premium luxury lineups such as BMW brand and Mercedes-Benz.

Automakers are still concerned about car sales in Europe in the near term due to the continuous negative impact (such as lower consumer confidence) from the debt crisis. Some automakers have projected that the European auto market will shrink 5% in 2012. 

Texas Capital's business model remains a chief growth driver. The gain in market share from its competitors and organic growth is impressive. Credit quality improvement is also encouraging. The company's efforts to hire experienced bankers and expand its presence are impressive.

We believe that with an eventual improvement in the Texan economy, the company would be further poised to experience an increase in earnings. Our six-month target price of $46.00 equates to 16.7x our earnings estimate for 2012. This price target implies an expected total return of 18.8% over that period.
 
TEXAS CAP BCSHS (TCBI): Free Stock Analysis Report
 
To read this article on Zacks.com click here. ]]> Wed, 16 May 2012 00:00:01 EST China Life Insurance - ADR (LFC) to Underperform from Neutral due to the lack of any significant growth catalyst amid the prevailing interest rate, market and currency risks. China Life's full-year 2011 earnings declined steeply from the prior year, due to low premium income and increased impairment losses.

Operating cash flow also declined substantially due to increased claim expenses and adverse changes in the fair values of securities. Despite a strong brand name, significant competition on the domestic front limits earnings growth. Though an extensive domestic distribution channel, strong balance sheet and stable ratings augur strength, we expect limited upside in the near term.

Our six-month target price of $36.00 equates to 25.9x our earnings estimate for 2012. Combined with the $0.81 per ADR annual dividend, this target price implies an expected total return of a negative 8.7% over that period.
 
CHINA LIFE INS (LFC): Free Stock Analysis Report
 
CHINA LIFE INS (LFC): Free Stock Analysis Report
 
To read this article on Zacks.com click here. ]]> Wed, 16 May 2012 00:00:01 EST Monster Beverage (MNST) sees growth in the implied earrings growth rate and has recently become a Zacks #1 Rank (Strong Buy).

Company Description

Monster Beverage makes alternative beverage category beverages. The company's Direct Store Delivery segment offers carbonated energy drinks, non-carbonated dairy based coffee plus energy drinks and ready-to-drink iced teas. This segment sells its products through a distributor network. The company was formerly known as Hansen Natural Corporation and changed its name to Monster Beverage Corporation in January 2012. Monster Beverage Corporation was founded in 1985 and is based in Corona, California.

Monster Beverage Meets or Beats Estimates in Five of Last Seven Quarters

Monster Beverage has met or topped the Zacks Consensus Estimate in five of the last seven quarters. The four beats have come in on average more than $0.03 higher than the Zacks Consensus Estimate. Those three cents translate into positive earnings surprises of more than 9.5%. The stock has generally reacted positively when the company beats expectations. The stock was up 3.2% on average following the four beats.

The second largest price movement in the stock came the day after the company met estimates. The September 2011 quarter saw the company beat the topline estimate of $461 million by posting revenues of $475 million. EPS was in line with the Zacks Consensus Estimate and the stock moved higher by 8.3%.

Follow Brian Bolan on twitter at @BBolan1

Monster Beverage Most Recent Reported Earnings

On May 9, 2012 Monster Beverage reported revenue of $455 million, approximately $8 million higher than the Zacks Consensus Estimate and up from $356 million reported in year ago quarter, an increase of 28%. In addition, earnings per share came in at $0.41, $0.03 higher than the Zacks Consensus Estimate of $0.38. The beat of 7.9% helped lift the stock higher by 8.6% in the session following the release.

Monster Beverage Sees Estimates Moving Higher

Monster Beverage has seen earnings estimates move higher following the recent positive earnings surprise. The Zacks Consensus Estimate for 2012 was as low as $1.85 in December 2011 and has since moved to $2.03. That represents an increase of more than 9.7%.

Estimates for 2013 have also seen an increase following the most recent quarterly release. The Zacks Consensus Estimate for 2013 stood at $2.21 and has since moved to $2.41. The increase of 12% for 2013 is part of the key driver for the stock. Better than the 12% increase in 2013 earnings expectations is the 22% implied growth rate for earnings from 2012 to 2013. That is the type of growth that aggressive growth investors look for.

Valuation

The valuation for Monster Beverage can be summed up as double the industry average. The trailing twelve months PE multiple of 43x is more than double the 19x industry average. The forward PE sports a similar premium at a 35x multiple compared to a 17x industry average. Price to book is 11.5x compared to 5.2x industry average and the price to sales multiple is 6.9x, more than double the 3x industry average. The "double" the industry average is justified, in that MNST has grown revenue by 28% on year over year basis while the industry average is a mere 5.4%. EPE growth of 39% is also well above the industry average of negative 4.6%. Multiples of a growth stock are generally on the high side for good reason, and MNST supports its high multiples with growth.

The Chart

A quick look at the price and consensus chart shows a stock that has done nothing by move higher. Earnings estimates have also pretty much continuously moved higher, but the stock is well above the earnings lines implying a rich valuation. The multiples for this stock are on the high side for good reason, and MNST supports its high multiples with revenue and earnings growth. Monster Beverage has moved to a Zacks #1 Rank (Strong Buy) as of May 11, 2012.

Brian Bolan is the Aggressive Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the Zacks Home Run Investor service

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To read this article on Zacks.com click here. ]]> Wed, 16 May 2012 00:00:01 EST Magna International Inc. (MGA) after the company delivered both a revenue and earnings beat on May 10. It is a Zacks #1 Rank (Strong Buy) stock.

The company also pays a dividend that yields a solid 2.6%. And valuation is attractive too, with shares sporting a PEG ratio of only 0.8.

Company Description

Magna International Inc. is one of the largest diversified auto parts suppliers in the world. Geographically, its sales were divided as follows in the first quarter of 2012:

North America: 53%
Europe: 41%
Rest of World: 6%

The company was founded in 1961 and is headquartered in Aurora, Ontario, Canada. It has a market cap of $10.0 billion.

First Quarter Results

Magna International delivered strong first quarter results on May 10. Earnings per share came in at $1.46, beating the Zacks Consensus Estimate of $1.30. It was a 12% increase over the same quarter last year.

Net sales rose 7% to $7.666 billion, ahead of the Zacks Consensus Estimate of $7.375 billion. Sales increases in North America (+10%), Europe (+6%), and the rest of the world (+29%) were partially offset by decreases in complete vehicle assembly sales (-11%) and tooling, engineering and other sales (-7%).

Gross profit expanded from 12.2% to 12.9% of sales in the quarter, which helped drive a 10% increase in operating income.

Estimates Rising

Magna expects 2012 revenue between $29.0 and $30.5 billion, driven by light vehicle production of 14.4 million units in North America and 12.7 million units in Western Europe. This bullish outlook prompted analysts to revise their estimates significantly higher. It is now a Zacks #1 Rank (Strong Buy) stock.

The Zacks Consensus Estimate for 2012 is now $4.86, representing 8% growth over 2011 EPS. The 2013 consensus estimate is currently $5.53, corresponding with 14% EPS growth.

2.6% Yield

In addition to strong earnings growth, the company offers a dividend that yields a solid 2.6%. The company did cut its dividend during the Great Recession, but it has raised it 4 times since then. Its quarterly dividend of 27.5 cents per share is above its pre-cut high of 19 cents.

Reasonable Valuation

The valuation picture looks very reasonable for Magna. Shares trade at just 8.3x 12-month forward earnings, below the industry median of 9.7x and its 10-year median of 10.2x.

Its PEG ratio is 0.8 based on a consensus long-term growth rate of 10.3%.

Magna's price to sales ratio of 0.3 is also below both the peer group multiple and its historical multiple.

The Bottom Line

With rising estimates, strong growth projections, a 2.6% yield and very reasonable valuation, Magna International offers attractive total return potential.

Todd Bunton is the Growth & Income Stock Strategist for Zacks Investment Research and Editor of the Income Plus Investor service.

 
MAGNA INTL CL A (MGA): Free Stock Analysis Report
 
To read this article on Zacks.com click here. ]]> Wed, 16 May 2012 00:00:01 EST Radware Ltd. (RDWR) became one of the top-performing Zacks #1 Rank (Strong Buy) stocks on Wednesday with a gain of 6.8%. Volume was over 930,000 today, compared to the daily average of around 183,000.

According to Oppenheimer & Co., the company, which is a global leader of application delivery and application security solutions for virtual and cloud data centers, is in “advanced negotiations” with Juniper Networks (JNPR) for a possibly “substantial” deal.

While this speculation was apparently the reason for the share price bump today, it has nothing to do with the company’s Zacks #1 Rank, which is based on earnings estimate revisions and was established well before the announcement.

There’s only one estimate on RDWR for 2012 and 2013, but it has moved higher in the past 30 days. As a result, the Zacks Consensus Estimate for 2012 is up nearly 9.3% in that time to $1.53 per share. For 2013, the Zacks Consensus Estimate has increased 9.1% to $1.79, which suggests year-over-year profit growth of practically 17%.

The reason behind the higher consensus was a solid first-quarter report announced on May 1, in which earnings per share topped the Zacks Consensus Estimate by almost 14%. Meanwhile, revenue jumped 17% year over year to $45 million from $38.6 million. The company attributed this performance to increased demand in the Americas.

RDWR has either beaten or matched the Zacks Consensus Estimate for eight consecutive quarters now. As the graph below shows, it has beaten six times and matched twice in this run, and has now put together three straight quarters of positive surprises.

Radware Ltd. Develops, manufactures and markets products that manage and direct Internet traffic among network resources to enable continuous access to Web sites and other services, applications and content based on Internet protocol. It offers a broad range of Internet traffic management solutions to service providers, e-commerce businesses and corporate enterprises that require uninterrupted availability and optimal performance of IP-based applications that are critical to their business.

 
RADWARE LTD (RDWR): Free Stock Analysis Report
 
To read this article on Zacks.com click here. ]]> Wed, 16 May 2012 00:00:01 EST Textainer Group Holdings Limited (TGH) expanded its fleet by 5.5% year over year in the first quarter. Despite trading at 2-year highs, this Zacks #1 Rank (Strong Buy) continues to be a value stock with a forward P/E of just 8.7.

Textainer is the largest lessor of intermodal containers in the world based on fleet size. It leases dry freight, refrigerated and specialized containers to more than 400 shipping lines.

The company also sells used containers to more than 1,000 customers around the world.

Textainer Beat Again In Q1

On May 8, Textainer reported first quarter results and surprised on the Zacks Consensus Estimate for the 4th quarter in a row. Earnings were 97 cents compared to the consensus of 94 cents.

Revenue jumped 28.9% to $117.5 million from $91.2 million a year ago.

Utilization remained near historic highs but did fall 1.3% to 96.9% from 98.2% a year ago.

The company also continues to expand its fleet. It ordered 224,000 twenty-foot equivalent units ("TEU") of new dry-freight containers and 15,000 TEU of new refrigerated containers for delivery through July 2012.

Container Demand Still Remains Strong

Even though utilization rates declined 1.3% year over year, since April, it has increased steadily. 79% of the company's fleet is committed to long-term, direct financing and sales-type leases, up from 76% a year ago.

It also continues to see "strong demand for new containers."

Zacks Consensus Estimate for 2012 Jumps

The analysts got really bullish after this report, as 7 out of 8 estimates moved higher in the last week.

The 2012 Zacks Consensus also rose by 5.1% to $4.09 from $3.89.

That is earnings growth of 14.2% compared to 2011 when the company made $3.58 per share.

Raised the Dividend For The 9th Quarter In A Row

Shareholders have been rewarded over the last 2 years.

Textainer has raised the quarterly dividend 9 straight quarters and did so again for the second quarter. The Board of Directors approved a dividend of 40 cents, a 8.1% increase from the first quarter.

Textainer is currently yielding 4.4%.

Shares At 2-Year High

Shares have been hot, but there's still plenty of value in Textainer.

In addition to a P/E under 10, it has a price-to-book of 2.4. A P/B ratio under 3.0 usually indicates value.

Textainer also has other strong fundamentals, including a 1-year return on equity (ROE) of 28.6%. This easily beats its peers which average just 8.5%.

The container companies are still growing earnings and paying out big paydays to their shareholders. Textainer joins other container groups in also being an attractive value stock.

Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor of the Turnaround Trader and Insider Trader services. You can follow her on twitter at @TraceyRyniec.

 
TEXTAINER GROUP (TGH): Free Stock Analysis Report
 
TEXTAINER GROUP (TGH): Free Stock Analysis Report
 
To read this article on Zacks.com click here. ]]> Wed, 16 May 2012 00:00:01 EST  
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LEAPFROG ENTRPS (LF): Free Stock Analysis Report
 
To read this article on Zacks.com click here. ]]> Wed, 16 May 2012 00:00:01 EST  
To read this article on Zacks.com click here. ]]> Wed, 16 May 2012 00:00:01 EST Vitamin Shoppe, Inc. (VSI) shares have rocketed 41% in the past 6 months as this retailer of vitamin and feel good healthcare products gained from improved consumer confidence. On May 8, the company reported first-quarter earnings per share that beat the Zacks Consensus Estimate while climbing 30% from last year.

The stock was elevated to a Zacks #1 Rank (Strong Buy) on May 4 and has moved up 18.4% since.

Vitamin Shoppe Routinely Beats Quarterly Expectations

VSI has an excellent history of topping quarterly Zacks Consensus Estimates. The past four quarters have averaged a surprise of more than 13%. Revenues have also beaten the Zacks Consensus Estimate in the last four quarters with positive surprises in a range between 0.3% and 3.49%.

In the first quarter, earnings per share of 61 cents beat the Zacks Consensus Estimate by 7%. Revenues increased 14.4% to $248.1 million, topping the Zacks Consensus Estimate by 3.49%.

Vitamin Shoppe benefited from same-store sales growth of 9.6%, new store openings and 15% growth in Internet sales. The company was able to leverage space and supply chain costs, whereby relatively modest gains on the top line were magnified on the bottom line.

The company foresees same store revenue growth of about 5% or so, supported by the opening of 52 new retail outlets in the current year.

Earnings Estimates on the Upswing

The Zacks Consensus Estimate for 2012 has moved up 4.8% to $1.95 over the past week as all 14 estimates were revised upward. This represents an estimated growth of about 17.5%.

The Zacks Consensus Estimate for 2013 shifted higher about 5% in that timeframe to $2.31, which suggests the potential for year-over-year EPS growth of 18.2%.

Stretched Valuation

The forward PE multiple of 27.6x is more than twice the peer group average of 12x. Similarly, on a price-to-book basis, Vitamin Shoppe currently trades at 4.16x, compared with just 1.14x for its peer group average. However, the company has a 1-year ROE of 15.1% versus the peer group average of 9.7%, implying efficient usage of capital.

Chart: Solid Technicals

The burgeoning momentum for Vitamin Shoppe is well encapsulated in its chart. While the stock has somewhat aimlessly hovered close to its 50-day and 200-day moving averages for the most part of 2011-12, it managed to break free in late April. Expectations for strong earnings have catalyzed the somewhat early bullish trend.

With respect to performance, Vitamin Shoppe is trading just 3% short of its 52-week high. It has outperformed the S&P 500 over the past year and has generated a year-to-date return of 34.85% versus 8.44% for the benchmark.

About the Company

North Bergen, New Jersey-based Vitamin Shoppe, Inc sells vitamins, herbs, homeopathic drugs, minerals, supplements and other products. The company uses retail, Internet and mail order catalogues as its sales channels. As of January 28, 2012, Vitamin Shoppe had 533 stores across 40 states. The company doubled its sales between 2005 and 2011 to about $856.6 million. With a market capitalization of $1.57 billion, the company competes in niches with GNC Holdings Inc. (GNC) and a host of other retailers.

 
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Zacks Investment Research ]]> Tue, 15 May 2012 00:00:01 EST UMB Financial Corporation (UMBF) recently delivered better than expected first quarter results, driven by strong fee-based income and solid credit quality.

Estimates have been rising off the strong quarter, sending the stock to a Zacks #1 Rank (Strong Buy).

Unlike many of its peers, UMB has been steadily raising its dividend over the last decade - even during the financial crisis. It currently yields 1.7%.

Company Description

UMB Financial Corporation is a financial services company primarily offering banking and asset management services.

It is headquartered in Kansas City, Missouri and was founded in 1913. It has a market cap of $1.9 billion.

First Quarter Results

UMB Financial delivered better than expected first quarter results on April 24. Earnings per share came in at $1.15, crushing the Zacks Consensus Estimate of $0.61. Excluding certain one-time items, "core" EPS was around $0.76, still easily beating the consensus.

Net interest income declined 1% year-over-year, but this was more than offset by a 6% increase adjusted non-interest income. Trust & Securities Processing, which made up 41% of non-interest income, increased 6%. Overall, non-interest accounted for 63% of total revenue for the quarter.

The company also recorded its 8th consecutive quarter of loan growth, driven by a 21% increase in commercial loans. And credit quality remained strong, with non-performing loans representing just 0.50% of total loans, well below the industry average around 3.4%.

Estimates Rising

Earnings estimates jumped higher for both 2012 and 2013 following solid Q1 results, sending the stock to a Zacks #1 Rank (Strong Buy) stock.

The Zacks Consensus Estimate for 2012 is now $3.10, representing 12% growth over 2011 EPS. The 2013 consensus is a couple pennies higher at $3.12.

Dividend

Unlike many of its peers, UMB did not cut its dividend during the financial crisis of 2008-2009. In fact, the company actually raised it twice in 2008 and then again in 2009:

It currently yields a solid 1.7%.

Valuation

The valuation picture looks reasonable for UMB with shares trading at 15x 12-month forward earnings. That's a premium to the industry median of 13x, but a discount to its 10-year median of 19x.

Its price to book ratio of 1.6 is in-line with the group and its historical multiple.

The Bottom Line

With a growing loan portfolio, strong fee-based income, solid credit quality, a 1.7% yield and reasonable valuation, UMB Financial offers investors a lot to like.

Todd Bunton is the Growth & Income Stock Strategist for Zacks Investment Research and Editor of the Income Plus Investor service.

 
UMB FINL CORP (UMBF): Free Stock Analysis Report
 
To read this article on Zacks.com click here. ]]> Tue, 15 May 2012 00:00:01 EST ResMed (RMD) sees 2013 earnings increase and has recently become a Zacks #1 Rank (Strong Buy).

Company Description

ResMed Inc., through its subsidiaries, engages in the development, manufacture, and distribution of medical equipment for treating, diagnosing, and managing sleep-disordered breathing and other respiratory disorders. It offers various products for the treatment of obstructive sleep apnea and other respiratory disorders, including airflow generators, diagnostic products, mask systems, headgear, ventilation devices, and other accessories, such as cold pass over humidifiers, carry bags, and breathing circuits.

ResMed Tops Estimates in Five of Last Seven Quarters

ResMed has topped the Zacks Consensus Estimate in five of the last seven quarters. The five beats though not consecutive, have been increasing in both absolute and percentage terms. The average beat works out to be $0.035 more than estimated or a 9.2% positive surprise. When the misses are added into the average the beat amount slides to $0.02 or 5.4%. The stock moved higher by nearly 2% on average following just the beats, but moved lower by an average of 1.2% when the misses are added in.

The biggest price impact came following the December 2011 quarter, the stock rose more than 9% following a 10% positive earnings surprise. The company reported earnings of $0.42, $0.04 more than the Zacks Consensus Estimate. Revenues of $333 million were approximately $7 less than the Zacks Consensus Estimate and represented a 9% increase from the year ago period.

Follow Brian Bolan on twitter at @BBolan1

ResMed Most Recent Reported Earnings

On April 26, 2012 ResMed reported revenue of $349 million, roughly $9 million higher than the Zacks Consensus Estimate and up from $310 million reported in year ago quarter, an increase of 62%. In addition, earnings per share came in at $0.46, $0.05 higher than the Zacks Consensus Estimate of $0.41. The beat of 12% helped lift the stock higher by 7.5% in the session following the release.

ResMed Sees Estimates Moving Higher

ResMed has seen earnings estimates move higher following the recent positive earnings surprise. The Zacks Consensus Estimate for 2012 was as low as $1.55 in December 2011 and has since moved to $1.70. That represents an increase of more than 9.6%.

Estimates for 2013 have also seen an increase following the most recent quarterly release. The Zacks Consensus Estimate for 2013 stood at $1.81 and has since moved to $1.95. The increase of 7% for 2013 is good by aggressive growth investors who are really keying in on the 14.7% expected earnings growth rate from 2012 to 2013. With another solid beat, that growth rate is likely to increase to more than 20%.

Valuation

The valuation for ResMed is slightly higher than the industry average on most of the metrics that aggressive growth investors look to. The forward PE multiple of 20x is higher than the 15x industry average, and the trailing twelve months PE of 21x carries a similar premium to the industry average of 15x. Price to book is closer to being in line with the industry at 3x compared to 2.4x, while price to sales shows a bigger premium with a 3.6x multiple for ResMed and 2x industry average.

The Chart

A quick look at the price and consensus chart shows a lot of what aggressive growth investors are looking for. The growth between the estimated earnings lines shows the good history of earnings performance, and the recent dip was more or less telegraphed by earlier reductions in 2013 earnings. With estimates moving back higher for 2012 and 2013 ResMed has moved to a Zacks #1 Rank (Strong Buy) as of May 12, 2012.

Brian Bolan is the Aggressive Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the Zacks Home Run Investor service

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RESMED INC (RMD): Free Stock Analysis Report
 
RESMED INC (RMD): Free Stock Analysis Report
 
RESMED INC (RMD): Free Stock Analysis Report
 
To read this article on Zacks.com click here. ]]> Tue, 15 May 2012 00:00:01 EST Texas Capital BancShares Inc. (TCBI) has been on a roll for the last several months, hitting a number of new all-time highs and jumping more than 70% since October 2011. With first-quarter EPS growth of 126% year-over-year and a long-term growth projection of about 10%, this regional banking stock has plenty of momentum.

The company became a Zacks #1 Rank (Strong Buy) stock on March 27, riding on the enthusiasm over its strong credit quality, steady capital position and consecutive earnings surprises.

First Quarter EPS Soars

Texas Capital reported first quarter 2012 earnings per share of 70 cents on April 25, beating the Zacks Consensus Estimate by 13% and improving upon last year's 31 cents. An increased top line and a reduced provision for credit losses led to the solid year-over-year growth. However, higher non-interest expense was a problem.

Net interest income was $88.2 million, up 37% from the year-ago quarter on the back of a 46% jump in total loans. Non-interest income increased 20% to $9.2 billion. Non-interest expense grew 13% to $52.3 million. Provision for credit losses was down 60% from the year-ago quarter to $3 billion.

Earnings Estimates Flying High

Currently, the Zacks Consensus Estimate for 2012 is $2.75 per share, an expected year-over-year growth of about 38%. For 2013, the Zacks Consensus Estimate is pegged at $2.85 per share.

For each year, all 13 estimates have been revised upward in the past 30 days, pushing the Zacks Consensus Estimate higher by 15% for 2012 and 11% for 2013.

Valuation Not So Cheap

Texas Capital currently trades at forward P/E of 14.1x, a 5% premium to the peer group average of 13.4x. Also, on a price-to-book basis, shares currently trade at 2.3x, a 63% premium to the peer group average of 1.4x.

However, Texas Capital has a trailing 12-month return on equity (ROE) of 15.1%, well above the 10.6% of its peers. This implies that the company reinvests its earnings more efficiently than its peer group.

Chart: TCBI Continues to Show Strength

Texas Capital began trending higher with the market recovery in March 2009, but shares got an extra boost in October 2011 after the company reported strong third quarter 2011 results with a 12% earnings surprise.

The company continuously outperformed its 200-day moving average and the S&P 500's performance over the last six months. The year-to-date return for the stock came in at 26.5% compared with the S&P 500’s return of 7.6%.

About the Company

Headquartered in Dallas, Texas, this entity operates as the holding company for Texas Capital Bank, National Association that provides various banking products and services. Texas Capital focuses primarily on middle-market business customers and high-net-worth individuals in each of the five major metropolitan markets of Texas. The company was founded in 1996 and conducted business through thirteen full-service banking locations and one operations center as of December 31, 2011. With a market capital of about $1.46 billion, Texas Capital competes with BOK Financial Corporation (BOKF) and BancFirst Corporation (BANF).

 
TEXAS CAP BCSHS (TCBI): Free Stock Analysis Report
 
To read this article on Zacks.com click here. ]]> Tue, 15 May 2012 00:00:01 EST AGCO Corporation (AGCO) with a target price of $52. The company reported first quarter 2012 earnings of $1.21 per share, exceeding the Zacks Consensus Estimate of $0.86. Total revenues increased 26.5% to $2.27 billion, beating the Zacks Consensus Estimate of $2.08 billion.

The acquisition of GSI will help to place the company in a new market sector and extend its achievement in the agricultural industry. Moreover, it plans to invest in new products to expand its product line. In addition, its strategy of entering the emerging markets of Russia, CIS, China and Africa is slated to achieve significant growth.

Further, the demand for AGCO's products may increase as the U.S. Department of Agriculture expects worldwide corn production to rise 10% to 946 million tons in 2012. We set a 6-month target price of $52 per share, based on a P/E of 9.4x and our fiscal 2012 earnings estimate.
 
AGCO CORP (AGCO): Free Stock Analysis Report
 
To read this article on Zacks.com click here. ]]> Tue, 15 May 2012 00:00:01 EST  
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CROCS INC (CROX): Free Stock Analysis Report
 
To read this article on Zacks.com click here. ]]> Tue, 15 May 2012 00:00:01 EST Par Pharmaceuticals Companies, Inc. (PRX) recently reported first quarter results that surprised on the Zacks Consensus by 12.3%. Even with shares soaring to 5-year highs, this Zacks #1 Rank (Strong Buy) is once again a value stock, with a forward P/E of just 10.5.

The New Jersey based pharmaceutical company has two divisions, Par Pharmaceuticals and Strativa Pharmaceuticals. Par produces high barrier-to-entry generics and Strativa makes proprietary drugs.

It has more than 50 currently marketed products in 85 prescription drug families.

Par Beat In the First Quarter

On May 8, Par Pharmaceuticals reported its first quarter results and surprised for the third time in fourth quarters. Earnings per share were 82 cents compared to the consensus at 73 cents.

Revenue rose 7% to $271.5 million from $253.6 million a year ago.

Sales of its biggest product, Metoprolol, which is the authorized generic for all strengths of AstraZeneca's Toprol XL, rose 9.6% to $61.8 million from $56.4 million in the fourth quarter of 2011. The increase was driven by customer buying patterns.

Expansion In India

On Feb 17, the company completed its acquisition of privately-held Edict Pharmaceuticals Private Limited for $20.5 million at closing and $4.4 million repayment of certain pre-close indebtedness.

The Chennai, India-based developer and manufacturer of solid oral dosage generic drugs has a strong pipeline. It currently has 11 ANDAs filed with the FDA.

The Zacks Consensus Estimate For 2012 Jumped

The analysts are more bullish on 2012 than bearish after the first quarter report. 6 estimates have moved higher and 1 lower in the last 30 days.

The 2012 Zacks Consensus Estimate has risen to $3.89 from $3.72 in that time.

That is earnings growth of 15% as the company made just $3.39 in 2011.

Shares Near 5 Year High

It's been a heck of a run for Par's shares since the Great Recession in 2009. Shares recently touched new 5-year highs.

But Par remains a value stock.

In addition to a P/E of 10.5, it has a price-to-book ratio of 2.6. A P/B ratio under 3.0 usually means a company has value. It is also cheaper than its peers, which average a P/B of 1.8.

Par also has other solid fundamentals including a 1-year return on equity of 20.3%.

With double digit earnings growth and a P/E under the average of the S&P 500, this generic drug maker is a good combination of growth and value.

Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor of the Turnaround Trader and Insider Trader services. You can follow her on twitter at @TraceyRyniec.

 
PAR PHARMA COS (PRX): Free Stock Analysis Report
 
To read this article on Zacks.com click here. ]]> Tue, 15 May 2012 00:00:01 EST  
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Zacks Investment Research
 
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report ]]> Thu, 03 May 2012 00:00:01 EST Here is a synopsis of why CVH and APD have a Zacks Rank of #5 (Strong Sell) and should most likely be sold or avoided for the next one to three months. Note that a #5 Strong Sell rating is applied to 5% of all the stocks in the Zacks Rank universe:

Coventry Health Care, Inc. (CVH) announced first-quarter profit of 62 cents per share on April 27 that missed analysts? expectations by 1.59%. The Zacks Consensus Estimate for the current year slid to $2.72 per share from $3.25 per share in the last 30 days as next year?s estimate dipped 23 cents per share to $3.27 per share in that time span.

Air Products & Chemicals, Inc. (APD) posted a second-quarter profit of $1.31 per share on April 24, which came in 2 cents wider than the average forecast. The Zacks Consensus Estimate for the full year fell to $5.56 per share from $5.93 per share over the past month. For 2013, analysts expect a profit of $6.36 per share, compared to last month?s projection for a profit of $6.66 per share.

Here is a synopsis of why DECK and ICON have a Zacks Rank of 4 (Sell) and should also most likely be sold or avoided for the next one to three months. Note that a #4 Sell rating is applied to 15% of all the stocks ranked by Zacks;

Deckers Outdoor Corp (DECK) first-quarter profit of 20 cents per share, posted on April 26, lagged analysts? projections by 20%. Estimate for current year slid 53 cents per share to $4.61 per share over a month as next year?s estimate dipped 54 cents per share to $5.60 per share in that time span.

Iconix Brand Group, Inc. (ICON) reported a first-quarter profit of 43 cents per share on April 25 that fell 6.52% short of the Zacks Consensus Estimate. The full-year average forecast is currently $1.68 per share, compared with last month?s projection of $1.80 per share. Next year?s forecast dropped to $1.88 per share from $1.95 per share in the same period.
 
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COVENTRY HLTHCR (CVH): Free Stock Analysis Report
 
DECKERS OUTDOOR (DECK): Free Stock Analysis Report
 
ICONIX BRAND GP (ICON): Free Stock Analysis Report
 
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Zacks Investment Research ]]> Fri, 27 Apr 2012 00:00:01 EST Here is a synopsis of why ARCO and QUAD have a Zacks Rank of #5 (Strong Sell) and should most likely be sold or avoided for the next one to three months. Note that a #5 Strong Sell rating is applied to 5% of all the stocks in the Zacks Rank universe:

Arcos Dorados Holding Inc (ARCO) announced fourth-quarter profit of 22 cents per share on March 5 that missed analysts? expectations by 4.35%. The Zacks Consensus Estimate for the current year slid to 81 cents per share from 86 cents per share in the last 60 days as next year?s estimate dipped 11 cents per share to $1 per share in that time span.

Quad/Graphics, Inc. (QUAD) posted a fourth-quarter profit of 63 cents per share on February 29, which came in 37 cents wider than the average forecast. The Zacks Consensus Estimate for the full year fell to $1.80 per share from $2.18 per share over the past two months. For 2013, analysts expect a profit of $1.82 per share, compared to last two month?s projection for a profit of $2.84 per share.

Here is a synopsis of why WRC and NVS have a Zacks Rank of 4 (Sell) and should also most likely be sold or avoided for the next one to three months. Note that a #4 Sell rating is applied to 15% of all the stocks ranked by Zacks;

Warnaco Group Inc?s (WRC) fourth-quarter profit of 97 cents per share, posted on February 29, lagged analysts? projections by 1.02%. Estimate for current year slid 7 cents per share to $4.38 per share over two month?s as next year?s estimate dipped 13 cents per share to $4.94 per share in that time span.

Novartis AG (NVS) reported a first-quarter profit of 95 cents per share on April 24 that fell 28.03% short of the Zacks Consensus Estimate. The full-year average forecast is currently $5.35 per share, compared with last month?s projection of $5.49 per share. Next year?s forecast dropped to $5.53 per share from $5.65 per share in the same period.
 
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WARNACO GRP INC (WRC): Free Stock Analysis Report
 
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Zacks Investment Research ]]> Mon, 23 Apr 2012 00:00:01 EST Here is a synopsis of why SAFT and CEL have a Zacks Rank of #5 (Strong Sell) and should most likely be sold or avoided for the next one to three months. Note that a #5 Strong Sell rating is applied to 5% of all the stocks in the Zacks Rank universe:

Safety Insurance Group, Inc. (SAFT) announced fourth-quarter profit of 31 cents per share on March 8 that missed analysts? expectations by 47.46%. The Zacks Consensus Estimate for the current year slid to $3 per share from $3.05 per share in the last 60 days as next year?s estimate dipped 7 cents per share to $3.08 per share in that time span.

Cellcom Israel Ltd. (CEL) posted a fourth-quarter profit of 20 cents per share on March 7, which came in 36 cents wider than the average forecast. The Zacks Consensus Estimate for the full year fell to $1.48 per share from $2.28 per share over the past two months. For 2013, analysts expect a profit of $1.53 per share, compared to last two month?s projection for a profit of $2.06 per share.

Here is a synopsis of why MATW and NAV have a Zacks Rank of 4 (Sell) and should also most likely be sold or avoided for the next one to three months. Note that a #4 Sell rating is applied to 15% of all the stocks ranked by Zacks;

Matthews International Corp (MATW) second-quarter profit of 56 cents per share, posted on April 19, lagged analysts? projections by 3.45%. Estimate for current year slid 1 cent per share to $2.55 per share over a month as next year?s estimate dipped 4 cents per share to $2.83 per share in that time span.

Navistar International Corporation (NAV) reported a first-quarter loss of $2.08 per share on March 8 that fell 732% short of the Zacks Consensus Estimate. The full-year average forecast is currently $4.21 per share, compared with last month?s projection of $4.42 per share. Next year?s forecast dropped to $6.34 per share from $6.50 per share in the same period.
 
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Zacks Investment Research ]]> Thu, 12 Apr 2012 00:00:01 EST Here is a synopsis of why TPC and SINA have a Zacks Rank of #5 (Strong Sell) and should most likely be sold or avoided for the next one to three months. Note that a #5 Strong Sell rating is applied to 5% of all the stocks in the Zacks Rank universe:

Tutor Perini Corporation (TPC) announced fourth-quarter profit of 50 cents per share on March 1 that missed analysts? expectations by 33.33%. The Zacks Consensus Estimate for the current year slid to $2.17 per share from $2.52 per share in the last 60 days as next year?s estimate dipped 25 cents per share to $2.48 per share in that time span.

SINA Corporation (SINA) posted a fourth-quarter profit of 13 cents per share on February 27, which came in 3 cents wider than the average forecast. The Zacks Consensus Estimate for the full year fell to 13 cents per share from 25 cents per share over the past month. For 2013, analysts expect a profit of 1 cent per share, compared to last month?s projection for a profit of 98 cents per share.

Here is a synopsis of why HBI and WRC have a Zacks Rank of 4 (Sell) and should also most likely be sold or avoided for the next one to three months. Note that a #4 Sell rating is applied to 15% of all the stocks ranked by Zacks;

Hanesbrands Inc. (HBI) fourth-quarter profit of 41 cents per share, posted on February 15, lagged analysts? projections by 19.61%. Estimate for current year slid 1 cent per share to $2.51 per share over a month as next year?s estimate dipped 2 cents per share to $3.17 per share in that time span.

Warnaco Group Inc. (WRC) reported a fourth-quarter profit of 97 cents per share on February 28 that fell 1.02% short of the Zacks Consensus Estimate. The full-year average forecast is currently $4.39 per share, compared with last two month?s projection of $4.44 per share. Next year?s forecast dropped to $4.94 per share from $5.07 per share in the same period.
 
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Zacks Investment Research ]]> Thu, 05 Apr 2012 00:00:01 EST Here is a synopsis of why UNS and RIMM have a Zacks Rank of #5 (Strong Sell) and should most likely be sold or avoided for the next one to three months. Note that a #5 Strong Sell rating is applied to 5% of all the stocks in the Zacks Rank universe:

UniSource Energy Corp. (UNS) announced fourth-quarter profit of 22 cents per share on February 27 that missed analysts? expectations by 15.38%. The Zacks Consensus Estimate for the current year slid to $2.25 per share from $2.48 per share in the last 60 days as next year?s estimate dipped 10 cents per share to $2.80 per share in that time span.

Research In Motion Limited (RIMM) posted a fourth-quarter profit of 80 cents per share on March 29, which came in 1 cent wider than the average forecast. The Zacks Consensus Estimate for the full year fell to $1.96 per share from $2.86 per share over the past month. For 2014, analysts expect a profit of $2.07 per share, compared to last month?s projection for a profit of $3 per share.

Here is a synopsis of why LRN and PLCE have a Zacks Rank of 4 (Sell) and should also most likely be sold or avoided for the next one to three months. Note that a #4 Sell rating is applied to 15% of all the stocks ranked by Zacks;

K12 Inc. (LRN) second-quarter profit of 11 cents per share, posted on February 7, lagged analysts? projections by 60.71%. Estimate for current year slid 1 cent per share to 53 cents per share over a month as next year?s estimate dipped 4 cents per share to 78 cents per share in that time span.

Children's Place Retail Stores, Inc. (PLCE) reported a fourth-quarter profit of 87 cents per share on March 7 that fell 2.25% short of the Zacks Consensus Estimate. The full-year average forecast is currently $3.31 per share, compared with last month?s projection of $3.68 per share. Next year?s forecast dropped to $3.87 per share from $4.30 per share in the same period.
 
K12 INC (LRN): Free Stock Analysis Report
 
CHILDRENS PLACE (PLCE): Free Stock Analysis Report
 
RESEARCH IN MOT (RIMM): Free Stock Analysis Report
 
UNS ENERGY CORP (UNS): Free Stock Analysis Report
 
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Zacks Investment Research ]]>