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Business
Zacks Bull and Bear of the Day Highlights: Bristol-Myers Squibb, Internap Network Services, LSI Corporation, ArvinMeritor and PS Business Parks
© Business Wire 2008
2008-10-03 12:02:04 - - Zacks Equity Research highlights Bristol-Myers Squibb (NYSE: BMY) as the Bull of the Day and Internap Network Services (Nasdaq: INAP) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on LSI Corporation (NYSE: LSI), ArvinMeritor, Inc. (NYSE: ARM) and PS Business Parks (NYSE: PSB).
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: Bristol-Myers Squibb (NYSE: BMY)
Bristol-Myers Squibb Company is a major producer and distributor of pharmaceuticals and other healthcare-related products. The Pharmaceutical segment manufactures and sells branded pharmaceutical drugs such as Pravachol for cholesterol reduction, Plavix for hypertension and Erbitux for cancer. The Nutritional segment, through its subsidiary Mead Johnson, develops infant formulas like Enfamil, as well as other nutritional products.
We think the non-small cell lung cancer market offers significant opportunities for Erbitux. Add on the potential for IMC-118 to become a blockbuster product and we think it makes sense for Bristol raise its $62/share offer for ImClone. A sale to any other suitor may very possibly end up in a court battle over ownership rights to ImClone's pipeline.
So while we think it makes little sense for any other suitor other than Bristol to be interested in acquiring ImClone, we think a deal with Bristol fits well within the framework of the company's "String of Pearls" strategy.
Bear of the Day: Internap Network Services (Nasdaq: INAP)
Internap Network Services offers a suite of network optimization solutions that allow companies to transfer business-critical applications to the Internet. It offers products and services that optimize Internet applications for e-commerce, customer relationship management (CRM), multimedia streaming, voice-over Internet-protocol (VoIP), virtual private networks (VPNs), and supply chain management.
Being a small player in a competitive industry, Internap has a relatively low revenue growth rate. Although the company has been gaining traction in its data colocation services, it is witnessing softness in its content delivery network business. Much of this has been caused by the weakening economy, which has forced INAP to trim its 2008 guidance twice.
Though the company has been making important upgrades to its CDN product, there has been a lackluster performance in the segment in the last few quarters. As such, we are initiating our coverage on INAP with a Sell rating and a price target of $2.50.
Latest Posts on the Zacks Analyst Blog:
LSI Corporation (NYSE: LSI)
LSI Corporation designs, manufactures and markets application-specific integrated circuits (ASICs) and other standard products. An ASIC is a chip built by connecting existing circuit building blocks in new ways. ASICs can be found in edge switches and routers, and are also found in such consumer devices as DVD players and recorders, digital set-top boxes, cable modems, DSL modems, residential gateways and digital cameras.
We maintain our Hold rating on the stock with a target price of $7.00. LSI's technology offering and scale in storage remains positive, but in the meantime, valuation is highly stretched. Our target represents 14.0 times our 2008 EPS estimate -- lower than the industry median.
ArvinMeritor, Inc. (NYSE: ARM)
ArvinMeritor, headquartered in Troy, Michigan, is a global automotive parts manufacturer and supplier to various customers in North America, Europe, and other parts of the world. The company is a worldwide supplier of a broad range of integrated systems, modules and components for commercial, specialty and light vehicles worldwide, and has developed market positions as a leader in most of its markets.
Presently, the company is planning to spin off its Light Vehicle Systems (LVS) business. The company is undergoing dramatic cost reductions through its profit improvement initiative "Performance Plus." The company is also expanding geographically and outsourcing to low-cost countries. However, a downturn in the automotive industry, along with production cuts, coupled with rising steel and fuel prices, lead us to rate the shares a Hold.
PS Business Parks (NYSE: PSB)
PS Business Parks is a self-advised and self-managed equity real estate investment trust (REIT) whose property portfolio includes low-rise suburban multi-tenant offices, business parks, and industrial and flex space (a combination of warehouse and office space). The company currently owns approximately 19.6 million rentable square feet of commercial space with approximately 3,850 customers across eight states.
Most of the company's markets reported rental rate increases on new leases, a positive sign in a rapidly weakening economy. PSB has a strong balance sheet with low debt levels. The dividend, while low compared to peers, is adequately covered by operating cash. In addition, PSB has plenty of cash and availability under its line to be active in the acquisitions market.
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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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