Zacks Bull and Bear of the Day Highlights: DeVry, Salix Pharmaceuticals, Potash, Mobile TeleSystems and Marlin Business Services

Zacks Equity Research highlights DeVry, Inc. (NYSE: DV) as the Bull of the Day and Salix Pharmaceuticals (Nasdaq: SLXP) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Potash of Saskatchewan (NYSE: POT), Mobile TeleSystems (NYSE: MBT) and Marlin Business Services (Nasdaq: MRLN).

Full analysis of all these stocks is available at http://at.zacks.com/?id=2676.

Here is a synopsis of all five stocks:

Bull of the Day: DeVry, Inc. (NYSE: DV)

DeVry, Inc.'s management continues to execute well with the company reporting positive enrollment trends since its turnaround in fiscal 2006. In addition, the management is executing a five year strategic plan that focuses on four growth priorities in order to drive growth while maintaining the company's financial strength.

DeVry University is benefiting from strong enrollment growth and increased enrollments of online students. Total student enrollment growth for the 2008 summer term increased 12.6%. Finally, the ongoing real estate optimization strategy and incremental acquisitions are adding to the company's earnings potential. Therefore, the stock is upgraded to a Buy.

Bear of the Day: Salix Pharmaceuticals (Nasdaq: SLXP)

Salix Pharmaceuticals, Ltd. suffered a major setback late last year when the FDA granted approval to three generic versions of its lead product, Colazal. This is devastating news for Salix as Colazal was a significant contributor to both the top and bottomline. As such, we expect 2008 to be an extremely challenging year for the company with a significant decline in both revenues and earnings.

In order to make up for lost revenues, Salix is investing significantly in both R&D and SG&A. New product launches and new indications for rifaximin should support a recovery in revenues from 2009 onwards. We believe Salix will also seek suitable in-licensing opportunities in order to grow revenues. However, we do not expect earnings growth to resume prior to 2010.

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Potash of Saskatchewan (NYSE: POT)

Potash has benefited from higher fertilizer application rates, higher crop plantings, increasing demand for biofuels and rising crop prices. Rising fertilizers prices, especially potash, will expand POTs margin in the second half of 2008 and 2009.

The company is expanding potash production capacity by 2.7 million tons to cater to the growing fertilizer demand. The companys manufacturing plants are located in low-cost areas and its financials are solid. The management raised EPS guidance for 2008 from $9.5-$10.50 to $12-$13 expecting an EPS of $3.25-$3.75 in the third quarter of 2008. Hence, we rate the stock a Buy with a target price of $200.

Mobile TeleSystems (NYSE: MBT)

Mobile TeleSystems provides communication services over an integrated network in Russia, Ukraine, Uzbekistan, Turkmenistan, Armenia, Kyrgyzstan and Belarus. Subscriber growth remained robust in the most recent quarter, contributing to improved revenue and earnings performance.

The managements outlook for 2008 is also encouraging, with a projected annual sales growth of 25% while margins are expected to remain healthy with a 50% target. The stock has also reacted favorably to the recent $450 million share repurchase plan. While we view the expansion of 3G services as a key driver, larger expenditures to support network expansion and promotional initiatives may potentially tighten margins for the remainder of 2008.

Marlin Business Services (Nasdaq: MRLN)

We suspect the weakening economy will continue to impact the new originations, and the delinquencies will continue to rise through 2008. MRLN recently opened its industrial bank, which will lower the cost of funding however we do not expect any significant impact on the earnings in the current year. Based on the results and our concerns for further deterioration in growth and credit quality, we have lowered our FY08 and FY09 estimates to $0.58 and $0.82 per share, respectively.

MRLN currently trades at 9.3 times the consensus forward estimate, a 29% discount to the peer group median. On a price-to-book basis, the shares now trade at a 52% discount to the peer median, versus a 59% discount in June. We note again that peer group multiples vary widely, and that the medians can shift somewhat rapidly.

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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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