Zacks Equity Research highlights Stone Energy Corp. (NYSE: SGY) as the Bull of the Day and American Axle (NYSE: AXL) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Avnet, Inc. (NYSE: AVT), Barr Pharmaceuticals (NYSE: BRL) and Rogers Communications (NYSE: RCI).
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: Stone Energy Corp. (NYSE: SGY)
We recently upgraded Stone Energy shares to Buy from Hold following the stock’s pullback (down more than 20% in the last month alone) on the back of commodity-price weakness. We like the acquisition of Bois d’Arc Energy. The strategic rationale of the transaction is compelling, given the complementary asset bases, strategies, and skill sets of the two companies. The new Stone Energy will be more diversified with a significant Gulf of Mexico exploration exposure.
Bear of the Day: American Axle (NYSE: AXL)
Weak SUV demand is greatly affecting AXL’s sales. Furthermore, high commodity costs and pricing pressure as well as production cuts by OEMs such as GM remain causes for concern. Thus, we rate the stock a Sell and set a six-month target price of $4.00.
Latest Posts on the Zacks Analyst Blog:
Avnet, Inc. (NYSE: AVT)
Avnet, Inc. is one of the world’s largest distributors of electronic components and computer products. The company reported June quarter revenue and adjusted EPS of $4.68 billion and $0.85 versus our estimates of $4.60 billion and $0.80, respectively.
Generally speaking, performance improved sequentially across the company quarter over quarter [q/q], particularly at Technology Solutions (TS), where there was a nice jump in operating margin, despite a notable softening of the European IT market. That said, growth appears stalled or slowing in nearly every region on an organic basis, making it difficult for the distributor to realize significant operating leverage.
Barr Pharmaceuticals (NYSE: BRL)
Barr Pharmaceuticals, Inc.’s first quarter results missed ours and the Street’s expectations by a huge margin with all the business segments performing poorly. Given the lack of significant catalysts, barring a favorable ruling in the Miraprex case, and the ongoing issues related to pricing pressure and intense competition in the generics market, we had advised investors to avoid the name for the time-being.
We had issued a Sell rating on the stock after the company posted disappointing first-quarter results and slashed its full-year outlook. However, we moved back to a Hold rating following the recent announcement regarding the takeover of the company by Teva Pharmaceuticals. Teva and Barr entered into a definitive agreement under which Teva will acquire Barr for $7.46 billion plus the assumption of net debt of approximately $1.5 billion. This offer has come at the right time for Barr - the deal is expected to close later this year.
Rogers Communications (NYSE: RCI)
Rogers Communications Inc.’s wireless operations are well positioned with the biggest share (37%) of the attractive Canadian market. Wireless penetration in Canada is just about 60% compared with 70% in the mature U.S. market, providing significant growth opportunities. The company’s cable operations are growing rapidly, fueled by its "triple play" packages -- cable, telephony and Internet data services.
As the only Canadian carrier using GSM the technology used all across Europe and in many other countries Rogers is uniquely positioned to capture roaming revenue from foreign visitors. We estimate that international roamers contribute about 10% of Rogers wireless revenue.
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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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