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Business
Zacks Bull and Bear of the Day Highlights: Logitech International, Freddie Mac, Stryker, Cleveland BioLabs and Polycom
© Business Wire 2008
2008-07-21 12:20:16 - - Zacks Equity Research highlights Logitech International (Nasdaq: LOGI) as the Bull of the Day and Freddie Mac (NYSE: FRE) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Stryker Corp. (NYSE: SYK), Cleveland BioLabs, Inc. (Nasdaq: CBLI) and Polycom, Inc. (Nasdaq: PLCM).
Full analysis of all these stocks is available at
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Here is a synopsis of all five stocks:
Bull of the Day: Logitech International (Nasdaq: LOGI)
LOGI reported revenues for the fourth quarter of 2008 which were better than expected, although earnings were below our estimates due to write-down of value of remaining CDOs. There was strong demand for Harmony remotes and pointing devices combined with good traction with original equipment manufacturers (OEMs). Gross margins remained at a high level for the company, reflecting ongoing product cost reductions and supply chain efficiencies.
We now estimate that the company will continue to grow revenues and GAAP EPS by 15.0% and 10.1% respectively in 2009. We continue to rate LOGI a Buy with a target price of $38.00 over the next six months.
Bear of the Day: Freddie Mac (NYSE: FRE)
As the housing situation continues to worsen, we anticipate higher losses and write-offs in the coming quarters. As a result, FRE will need to raise more capital, which is becoming increasingly difficult and expensive. We also expect FRE to cut or suspend its dividend.
Recent measures announced by the Treasury affirm our belief that both the GSEs (FRE and Fannie Mae) are too big and important to fail, but any investment by the Treasury will further dilute the existing shareholders. Based on our concerns, we are maintaining our Sell recommendation on the shares and reducing our six-month target price to $4.50 per share.
Latest Posts on the Zacks Analyst Blog:
Stryker Corp. (NYSE: SYK)
Stryker reported solid second quarter results, meeting our expectations. Sales were strong across all business units except Hips, which were impacted by the January recall of the Trident cup.
In May 2008, the company received a warning letter from the Food and Drug Administration (FDA), prompting them to institute a Quality Action Plan that has put new product launches on hold. Our 2008 earnings per share estimate and price target remain unchanged at $2.88 and $71.00 target, an earnings multiple of roughly 25x.
Cleveland BioLabs, Inc. (Nasdaq: CBLI)
Cleveland BioLabs is developing compounds for Biodefense, a treatment of cancer and tissue protection due to external stress. We are excited about the company's rich pipeline of clinical candidates, its unique positioning, lack of competition for any product and the immense market potential if the company can successfully develop and commercialize the compounds. We maintain our Buy rating on the stock with a target price of $6.00.
Polycom, Inc. (Nasdaq: PLCM)
Polycom, a leading provider of voice/video conferencing solutions, announced mixed financial results for its second quarter fiscal 2008. Business enterprises on a global basis are facing restrictive travel budgets as economic weakness is evident. Under this scenario, Polycom's high-definition telepresence solutions have generated impressive growth in an increasingly interactive world.
However, reduction in sales of the company's high-margin Network Systems products and intensifying competition in this segment remains a concern for Polycom. Beyond macroeconomic demand factors, the company's balance sheet is capable of supporting initiatives for new ventures. We believe robust market demand for online voice/video collaborative solutions and strong business relationships with several large companies should be considered enablers for the company's long-term prospects.
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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.
About the Analyst Blog
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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Zacks.com
Mark Vickery
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