The company, a Zacks #1 Rank (strong buy), which manufactures and distributes over-the-counter (OTC) and prescription pharmaceuticals, nutritional products and consumer products, is expanding as consumers switch from more expensive, brand-name products to cheaper items in a slowing economy.

Perrigo is one of the largest suppliers of branded products to retailers. It supplies products in more than 15 categories and 500 formulas and offers analgesics, cough and cold remedies, and gastrointestinal and feminine hygiene products, as well as vitamins, dietary supplements and nutritional drinks.

Perrigo Gets Tentative Approval for Ibuprofen PM

Perrigo continues to invest in new generic products. On Oct 29, PRGO announced it received tentative approval from the FDA for its over-the-counter Ibuprofen and Diphenhydramine Citrate Tablets, 200/38 mg., which is a pain reliever/nighttime sleep aid.

The company estimates that brand sales for the product for the prior 12 months ending Sept 30, 2008 were $70 million.

Perrigo is a Value Stock

Analysts continue to be bullish about Perrigo's future. 2008 year-over-year growth is expected to be 24.05%.

Full year 2009 estimates are up 4 cents to $1.96 in the last 60 days. Estimates for the first-quarter 2009 are up 2 cents to 42 cents in the last 30 days.

Perrigo has a forward P/E of 14.8. Its price-to-book is 3.0. PRGO has a stellar 1-year return on equity (ROE) of 17.5%.

The company has surprised on earnings 3 out of 4 quarters by an average of 11.65%. It reports first-quarter 2009 earnings on Nov 6.

 
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Zacks Investment Research ]]> Thu, 16 Oct 2008 00:00:01 EST Perrigo Company (PRGO), has seen its stock hold up pretty well amidst the recent stock market sell-off.

The company, a Zacks #1 Rank (strong buy), which manufactures and distributes over-the-counter (OTC) and prescription pharmaceuticals, nutritional products and consumer products, is expanding as consumers switch from more expensive, brand-name products to cheaper items in a slowing economy.

Perrigo is one of the largest suppliers of branded products to retailers. The company supplies products in more than 15 categories and 500 formulas and offers analgesics, cough and cold remedies, and gastrointestinal and feminine hygiene products, as well as vitamins, dietary supplements and nutritional drinks.

Stock investors have been fleeing to quality health and drug company names, including Perrigo, during the market downturn. Perrigo has solid fundamentals.

The company recently paid $25 million in cash for Laboratorios Diba, S.A., a privately-held Mexican store-brand manufacturer of OTC and prescription pharmaceuticals. Perrigo expects the acquisition to add $15 million in annual sales.

Sales Grew 26% in 2008

In August, Perrigo reported its third straight quarter of record year-over-year sales and earnings. Sales rose 26% in 2008 compared to fiscal 2007. The company generated $248 million in cash flow in 2008.

Analysts continue to be bullish about Perrigo's future. 2008 year-over-year growth is expected to be 24.05%. Full year 2009 estimates are up 6 cents to $1.96 in the last 60 days. Estimates for the first quarter 2009 are down a penny to 42 cents in the last 2 months.

Perrigo has a forward P/E of 17.9. Its price-to-book is 3.6. It has a stellar 1-year return on equity (ROE) of 17.5%.

The company has surprised on earnings 3 out of 4 quarters by an average of 11.65%. It reports first-quarter 2009 earnings on Nov 6.

 
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Zacks Investment Research ]]> Thu, 02 Oct 2008 00:00:01 EST Martek Biosciences Corp. (MATK) has patented two strains of microalgae that produce beneficial oils: docosahexaenoic acid, or DHA, and arachidonic acid, or ARA. Both DHA and ARA are important nutrients in infant development. DHA also has health benefits that extend throughout a person's life.

Martek's product, life'sDHA, is used as an ingredient in infant formulas, products for pregnant and nursing women, food and beverage products and dietary supplements. Life'sDHA, along with life'sARA, is found in over 90% of U.S. infant formulas. The acids are also added to infant formulas sold in over 70 countries.

Martek, a Zacks #1 Rank (Strong Buy) stock, is headquartered in Maryland and has operations in Colorado, Kentucky and South Carolina.

Martek Enters Into Agreements

On Sep 18, the company announced it had entered into a multi-year DHA and ARA license and supply agreement with Hero, a Swiss-based international food company that manufactures infant nutrition and cereals. Martek will serve as Hero's exclusive supplier for all of its DHA and ARA needs for infant formula.

On Sep 22, Martek also signed a multi-year agreement with Swiss-based Hochdork Nutricare for the use of ARA in China and some parts of Europe.

Similarly, on Sep 24, Martek inked a multi-year agreement with Grupo Ricap, a third-party manufacturer of infant formula, to supply DHA and ARA in infant formula products produced for pharmacies in Mexico and Guatemala.

Martek Raises Full Year Guidance

On Sep 5, the company reported third quarter earnings and provided guidance for the rest of the year. Martek is seeing strong growth from infant formula customers, especially internationally.

Earnings per share for fiscal 2008 are expected to be higher than previously announced, in the range of $1.06 to $1.09, a 65% increase over 2007. Revenues are projected between $349 million and $353 million.

Covering analysts raised estimates for the full year to be in-line with the company's guidance. Full year estimates are up 3 cents in the last 30 days to $1.08 per share.

Fundamentals

Martek has a forward P/E of 25.23. It has surprised on estimates 4 consecutive quarters on average of 15.46%. The company reports fourth-quarter earnings on Dec 10.

 
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Zacks Investment Research ]]> Thu, 25 Sep 2008 00:00:01 EST Sohu.com Inc. (SOHU) is one of China's largest web networks, running 7 Chinese language web properties and proprietary search engines. The company has been on fire as Internet access expands across China and its growing middle class. Analysts expect 2008 year over year earnings growth of 293.89%.

Sohu.com's Revenue Explodes

On Jul 28, the company reported second quarter earnings and beat its own prior guidance and Wall Street estimates by 45.71%, or 32 cents per share. Net income surged 60.1% to $40.2 million, or $1.02 per share, from $25.1 million, or 64 cents in the year-ago period.

Revenues continued to soar, rising 162%, and 20% quarter-on-quarter, to $102 million from $39 million in the second quarter of 2007. Total revenues exceeded $100 million for the first time in the company's history. Advertising revenues were hot, growing 53% year-over-year to $43.4 million.

Sohu.com was the Internet Content Sponsor for the Beijing 2008 Olympic Games. In its second quarter report in July, the company was optimistic that the Games would expand its market penetration in China and spur growth for the remainder of 2008.

Third Quarter Revenue Expected to Grow

Sohu.com issued third quarter revenue guidance of between $112 million to $116 million and expects advertising revenues of $48.5 million to $50.5 million.

Consensus Estimates Spike Higher

The last four quarters, Sohu.com has easily surprised on estimates on average of 28.41%. Given its track record of growing earnings, covering analysts have been scrambling to raise estimates on the third quarter and the full year.

Third quarter estimates rose 30 cents to 98 cents in the last 60 days. Full year estimates jumped 28.69% in the last month to $3.55 from $2.76.

Fundamentals Are Solid

Shares of Sohu.com have tumbled since July due to the challenging market environment. Sohu.com is now trading in value territory, with a forward price-to-earnings (P/E) of just 14.22. The company also has an outstanding one year return on equity (ROE) of 35.69%.

 
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Zacks Investment Research ]]> Thu, 18 Sep 2008 00:00:01 EST Almost Family Inc. (AFAM) is in an industry that is in demand despite the slowing economic environment.

AFAM provides home health nursing, rehabilitation and personal care services in 11 states. The company has two segments: Visiting Nurse (VN) and Personal Care (PC). Visiting Nurse provides skilled nursing and physical, occupational and speech therapy. Personal Care includes custodial and personal care services.

AFAM Reports Record Second Quarter

As other companies are feeling the pain from the challenging economic conditions, Almost Family recently posted a record second quarter that saw net income soar 95% to $3.9 million, or 50 cents per share, compared to $2 million a year ago. However, the company added 2,512,500 shares in the second quarter of 2008 with a common stock offering that netted $41.8 million.

The company beat Wall Street estimates by 31.58% for the second quarter and has beaten estimates 3 out of the last 4 quarters by an average of 21.80%.

AFAM reported a large jump in service revenues. It rose by 50% to $48.7 million. The Visiting Nurse segment saw revenues soar 66% to $38.9 million from $23.5 million in the second quarter of 2007. $7.6 million could be attributed to acquired operations, as the company completed the acquisition of Patient Care, Inc.

Personal Care also got into the game, growing 9% to $9.8 million from $9 million in 2007.

Analysts Continue to Be Bullish

Covering analysts are upbeat about AFAM. 2008 year over year earnings growth estimates are up 35%. Sales are expected to grow 10.49%.

Estimates for the third quarter and the full year are higher in the last month. Third quarter estimates rose a penny to 45 cents from 44 cents. Similarly, for the full year, consensus estimates climbed to $1.89 from $1.88 per share.

Almost Family's Solid Fundamentals

AFAM is a Zacks #1 Rank (Strong Buy). The company has a forward P/E of 19.24. It has an outstanding one year return on equity (ROE) of 22.2%.

 
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Zacks Investment Research ]]> Thu, 11 Sep 2008 00:00:01 EST Invitrogen Corporation (IVGN) continues to move towards completion of its previously announced $6.7 billion buyout of Applied Biosystems, Inc. (ABI). Both companies have scheduled shareholder votes on the merger for Oct 16.

Invitrogen provides life science technologies for disease research, drug discovery and commercial bio-production through more than 4,700 scientists in 70 countries around the world.

The company produces 35,000 products and services that support academic and government research institutions, and has been involved in stem cell research, the discovery of the AIDs virus, and advancements in cancer treatment.

IVGN has two segments: BioDiscovery and Cell Systems. When it combines with Applied Biosystems, the company will focus on uncovering links between genes and illnesses.

In the merger, Applied Biosystems' shareholders will receive $38 per share distributed as 55% in Invitrogen common stock and 45% in cash. However, shareholders will also have the option of requesting all stock or all cash.

Invitrogen Grows Revenues by 14.3% in the Second Quarter

Invitrogen has been operating on all cylinders going into the ABI buyout. The company recently surprised on second quarter estimates by 19.30% as revenues rose 14.3%.

Both of the company's segments saw revenue growth with Cell Systems seeing a 16% increase over 2007 to $115 million. BioDiscovery wasn't far behind, as it grew revenues by 13.6%. Even excluding currency translation, growth was still 6.5% in the BioDiscovery segment.

Europe saw the largest gains, as revenue jumped 24%. Asia Pacific also saw an increase of 22%.

Stability in a Rough Market

Invitrogen is the furthest you can get from a financial or a commodities stock. While volatility continues in those sectors, IVGN is posting earnings surprises. It recently surprised for the fourth consecutive quarter and its average surprise was 18.62% over that period.

Consensus estimates have not changed in the last 2 months. Third quarter estimates call for 58 cents up from 56 cents. For the full year, estimates remain at $2.59 up from $2.43 in the last 60 days.

Invitrogen is a Zacks #1 Rank (Strong Buy) stock. It has a forward P/E of 15.16. The company reports third quarter earnings on Nov 4. The Applied Biosystems buyout is expected to be completed by the end of 2008.

 
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Zacks Investment Research ]]> Thu, 04 Sep 2008 00:00:01 EST Metalico, Inc. (MEA), the scrap metal processor with 20 recycling facilities across the United States, reported the strongest quarter in the company's history as soaring metal prices hiked revenues by 342%.

The company, a Zacks #1 Rank (Strong Buy), operates in two segments: ferrous and non-ferrous scrap metal recycling and lead fabrication.

It is the scrap metal recycling segment which is spurring the company's growth. In the second quarter, volumes rose 185% for ferrous and 93% for non-ferrous metals year-over-year.

Prices have skyrocketed. In the second quarter, ferrous metal prices increased 126% and non-ferrous soared 215% quarter-over-quarter. The largest source of non-ferrous revenue in the quarter was in the Platinum Group Metals (PGM).

Metalico Cautions About The Third Quarter

MEA obviously operates in the highly volatile commodities sector and is susceptible to price fluctuations. For the third quarter, the company expects ferrous metal pricing to remain near record levels with both international and domestic demand expected to remain strong but pricing has been volatile in recent days.

The company said at the end of July that non-ferrous prices were settling into a trading range lower than that of the first half. It expects sluggish third quarter pricing for stainless steel and copper and steady prices for aluminum.

Platinum Group Metal prices are off their record levels in the first part of the third quarter, but the company believes they'll settle into a narrow, but lower, trading range.

Metalico is still in an expansionist mode. It hopes to complete at least one more acquisition before the end of 2008.

Consensus Estimates Rising for the Year

As would be expected coming off the best quarter in the company's history, covering analysts have been raising estimates for both the third quarter and the full year. For the third quarter, consensus estimates are up 2 cents in the last 30 days to 33 cents from 31 cents per share.

For the full year, estimates have jumped 12 cents to $1.22 from $1.10 in the last month

Additionally, analysts expect sales to grow 55.42% year-over-year.

Solid Fundamentals

Metalico has surprised on estimates 3 out of the last 4 quarters by an average of 30.46%. It has an excellent one year return on equity (ROE) of 22.09%. MEA's forward P/E is only 9.54.

 
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Zacks Investment Research ]]> Thu, 28 Aug 2008 00:00:01 EST We have highlighted CF Industries Holdings, Inc. (CF), one of North America’s largest manufacturers and distributors of nitrogen and phosphate fertilizers, from the Timely Buy list several times over the last few months and rightly so. Read the Aug 14 analysis.

With all of the talk of companies with declining earnings, or, in the case of some of the financial companies, of losses, CF Industries continues to deliver.

Despite rising estimates from covering analysts, CF has beaten those estimates each of the last 4 quarters by an average of 28.73%.

Estimates continue to rise for fiscal 2008 and 2009. Consensus estimates jumped 24% for fiscal 2008 to $17.68 from $14.25, with all 4 covering analysts raising. Covering analysts appear equally bullish about 2009 as well, as estimates rose 14% to $22.29 to $19.63 in the last month.

Analysts expect year over year earnings growth in 2008 of 176.60%.

Meanwhile, the stock is cheap. Its trading at only 7.2x forward earnings.

CF remains a Zacks #1 Rank (Strong Buy). It reports third quarter earnings on Nov 10.

 
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Zacks Investment Research ]]> Fri, 22 Aug 2008 00:00:01 EST Oi Participações, the former Tele Norte Leste Participações S.A. (TNE), also known as Telemar, is a leading provider of fixed and wireless telecommunications services in Brazil. The company operates two business segments: wireline/ broadband communications, and wireless services.

Through its subsidiary, Telemar S.A., the company is the largest provider of wireline services in South America, with around 14 million access lines in service. Telemar also provides local, intra/inter-regional, international long distance services, and custom data transmission services in a territory encompassing approximately 64% of the population of Brazil. The company has established quite some time ago a strong presence in the fast-growing Brazilian wireless sector. In mid-2002, the company launched its wireless service operating under the brand name Oi. We are encouraged by the company s strategy to increase its focus on the wireless business, which provides TNE with a healthy mix of businesses. Recently, the company decided to focus on the Oi brand, which is now the company s brand for all its products.

While the local wireline business has stagnated, the company has established a strong presence in the fast-growing wireless sector and the promising broadband segment.

The company has a high dividend yield and an attractive valuation.

On July 31, 2008, Telemar released solid results for the second quarter of 2008. Net revenues reached R$4.677 million (US$2.835 million), an increase of 4.1% quarter-over-quarter and 7.3% year-over-year in Brazilian reals.

The wireless segment reached 20.3 million total subscribers (including TNCP), with a growth of 17.1% quarter-over-quarter and 48.9% year-over-year, representing an estimated market share in its region of 30.7%, from 27,9% in the previous quarter and 26,5% one year ago.

Net income for the quarter reached R$249 millions (US$151 million) from R$486 in the previous quarter and R$468 million one year ago. Without non-recurrent items net income would have been R$401 million (US$243 million).
 
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Zacks Investment Research ]]> Thu, 14 Aug 2008 00:00:01 EST CF Industries Holdings, Inc. (CF), one of North America’s largest manufacturers and distributors of nitrogen and phosphate fertilizers, remains a Zacks #1 Rank (Strong Buy) despite the whiplash moves in its stock price in the last 2 weeks.

The company reported record second quarter earnings on July 28 which boosted the stock price to $167 by July 30. The company was also bullish about the rest of 2008 in its earnings report.

But a sell-off in the commodities sector, and most companies in commodities-related industries such as the fertilizers, drove the stock down to as low as $123.11 on Aug 12.

CF Industries Fundamentals Remain Strong

CF's recent stock plunge was not for the faint-of-heart but the roller coaster continues as it has again bounced to higher levels.

After this recent sell-off, CF remains an extremely cheap stock and its fundamentals remain in place. Basically, it has gone on sale. It's trading at only 6.24x its forward earnings. That's cheap even by industry standards which has a trailing P/E of 11.02.

Consensus Estimates Jump

Brokerage analysts continue to believe the fundamentals remain strong as well. Consensus estimates continue to rise on the company for both the third quarter and the full year.

In the last 30 days, third quarter estimates climbed 27% to $3.80 from $3.00 per share.

Full year estimates skyrocketed by 29% in the last month to $17.13 from $13.32. As an indicator of how quickly things are changing in the fertilizer sector, and how bullish the analyst outlook is, consensus estimates for full year 2009 have jumped 36.4% to $22.25 from $16.31 in just the last 90 days.

CF Continues To Surprise to the Upside

Despite earnings increases by analysts over the course of the prior quarters, CF continues to beat consensus estimates. The company surprised by 15.17% in the second quarter. That surprise came on the heels of 3 consecutive prior surprises. The company has beaten Wall Street estimates by an average of 28.73% the last four quarters.

Given the pricing power and profits in the fertilizer sector, CF has a tremendous return on equity (ROE). Its trailing 12 month ROE is 46.75%.

CF's stock is on roller coaster ride right now, but its earnings potential can't be beat.

 
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Zacks Investment Research ]]>