Zacks Equity Research highlights Cree, Inc. (Nasdaq: CREE) as the Bull of the Day and Pfizer, Inc. (NYSE: PFE) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Green Mountain Coffee Roasters (Nasdaq: GMCR) and Human Genome Sciences, Inc. (Nasdaq: HGSI). Full analysis of all these stocks is available at http://at.zacks.com/?id=2676.
Here is a synopsis of all four stocks:
Bull of the Day:
Our Bull of the Day recommendation is for Cree, Inc. (Nasdaq: CREE). Cree is one of the leading producers of SiC and GaN-based LEDs. September quarter results beat the consensus on both the top and bottom lines. Forward guidance is for a 1-5% growth in the December quarter. Near-term revenue growth is likely to come from the lighting space, and notebooks seem to be next in line. However, new product ramp up costs and low utilization rates are likely to keep the pressure on margins. The LED market is hot in our opinion, and the convenience, energy efficiency and eco-friendliness of LED devices should become more apparent over the next few years. We would not be surprised if the company is the subject of a lucrative takeover. Consequently, we are reiterating our BUY rating on CREE shares.
Bear of the Day:
Our Bear of the Day recommendation is for Pfizer, Inc. (NYSE: PFE). We continue to rate Pfizer a Sell based on a shrinking top-line and weak late-stage pipeline. Pfizer’s top- and bottom-line growth prospects beyond over the next few years do not look encouraging. The company announced (yet another) major restructuring and cost-cutting initiative in early 2007. We do not find cost-cutting and share buybacks as a viable long-term growth strategy. The company will probably seek to do multiple deals in the pharma and biotech industry in 2008. The risk of over-paying or failing to successfully integrate on these acquisitions is high. In our view, the stock does not become attractive until the low $20s.
Analyst Blog:
Green Mountain Coffee Roasters (Nasdaq: GMCR) is a growth company in a growth industry. The company has reported 20 consecutive quarters of double-digit sales growth. Over the next few years, management's financial goals are to grow both sales and EPS in the 20% to 25% range. The company is expanding geographically and by expanding the channels of distribution, including the Office Coffee Service (OCS) channel, the Supermarket channel, the Consumer Direct channel, the Convenience Store channel, and the Food Service channel. Geographically, the company's operations were concentrated in New England until 2003, when management began emphasizing a national sales program.
Human Genome Sciences, Inc. (Nasdaq: HGSI) is a biopharmaceutical company focused on discovering novel protein and antibody drugs through gene-based research and albumin fusion technology. The company has two candidates in late stage development. Albuferon is in phase III studies for hepatitis C and LymphoStat B is in phase III trials for systemic lupus erythematosus (SLE). Both candidates have potential to become blockbusters, while we see LymphoStat B is a higher risk program. Although we believe Albuferon has a high success rate of development due to the existing interferon alpha safety and efficacy profile, we think LymphoStat B for lupus is a high risk program since lupus is a difficult disease to treat.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.
About the Bull and Bear of the Day
Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.
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Updated throughout every trading day, the Analyst Blog provides analysis from Zacks Equity Research about the latest news and events impacting stocks and the financial markets.
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