Zacks Equity Research highlights NovaMed, Inc. (Nasdaq: NOVA) as the Bull of the Day and School Specialty (Nasdaq: SCHS) the Bear of the Day. In addition, Zacks Equity Research provides analysis on Bank of America (NYSE: BAC), General Motors (NYSE: GM) and Fannie Mae (NYSE: FNM).
Full analysis of all these stocks is available at http://at.zacks.com/?id=2676.
Here is a synopsis of all five stocks:
NovaMed, Inc. (Nasdaq: NOVA) is an emerging healthcare services company engaged in the operation of ambulatory surgery centers (ASCs) and the provision of optical products and services to eye-care professionals.
The company reported 1Q09 net income of $1.729M, up 10% y/y, which was broadly inline with expectations. Consolidated net revenue in 1Q09 was $38M, up 13.3% y/y, largely due to the contribution of ASCs acquired or developed over the past 12 months which offset a same-facility surgical net revenue decline of 1.6% y/y.
Notwithstanding reimbursement risk and relatively high levels of debt on the balance sheet, cash flows from operations remain strong. We retain our Buy recommendation at current levels.
On its fiscal third quarter report, School Specialty (Nasdaq: SCHS) missed estimates and lowered its guidance for fiscal year 2009. That was the second quarter in a row that School Specialty missed estimates and lowered its fiscal 2009 guidance.
The third quarter shortfall was due to a decline in state revenues. SCHS is highly dependent on state and local governments for its revenues. A weak economy and de-leveraging in the credit markets will only exacerbate the problems in local government funding.
We expect this trend to continue, and that will hurt School Specialty’s results. We reiterate our Sell rating on SCHS. Our six-month target price is $13, or 10x our fiscal 2010 EPS estimate.
Latest Posts on the Zacks Analyst Blog:
Gov’t Pressuring BAC to Revamp?
Though the government has invested $45 billion in Bank of America (NYSE: BAC), the investment is in the form of preferred shares which do not carry voting rights. Further, most of its current woes stem from its acquisition of Merrill Lynch, reportedly on the government's behest.
According to testimony by Ken Lewis to the New York Attorney General, he was pressured by Fed Chairman Bernanke and former Treasury Secretary Paulson to not disclose the huge losses at Merrill Lynch and not invoke the material adverse change clause in the agreement in order to get out of the deal.
The government had adopted a different strategy in bailouts of General Motors (NYSE: GM), Fannie Mae (NYSE: FNM) and others when the CEOs were ousted following the bailouts. However in the case of banks, the CEOs were allowed to remain in office.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.
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