2008-11-07 22:36:04 -

- Zacks Equity Research highlights Corrections Corp. of America (NYSE: CXW) as the Bull of the Day and Hartford Financial Services Group, Inc. (NYSE: HIG) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Chesapeake Energy Corp. (NYSE: CHK), Coca-Cola FEMSA S.A. de C.V. (NYSE: KOF) and Orchid Cellmark Inc. (Nasdaq: ORCH).

Full analysis

of all these stocks is available at at.zacks.com/?id=2676.

Here is a synopsis of all five stocks:

Bull of the Day: Corrections Corp. of America (NYSE: CXW)

Corrections Corp. of America is the largest private owner and operator of correctional and detention facilities in the United States. The company owns and operates medium and maximum level security facilities for the US Federal government, 20 state agencies and numerous local agencies.

We reiterate our Buy rating on shares of CXW prior to the release of third-quarter results. Corrections Corp. holds a significant market share advantage over its peers, with a substantial pipeline of additional capacity scheduled to be added to the portfolio over the next two years. The company is the clear leader in an industry with a strong outlook, supported by favorable economic and demographic trends.

We consider the current price to represent an attractive entry point. Our target price equates to multiples of 27x and 22x our '08 and '09 EPS estimates, respectively. CXW will report Q3 results on 11/6/08.

Bear of the Day: Hartford Financial Services Group, Inc. (NYSE: HIG)

Hartford Financial Services shares had lost more than half their value Thursday morning, based on the concerns that the company may need to raise additional capital soon.

Further, the management was not able to provide a forecast of the year-end capital margin due to the ongoing market volatility. 3Q08 core losses of $1.40 per share were substantially worse than the estimates. The company also lowered its guidance for FY08 to $4.30 4.50 per share from $9.20 9.50 per share earlier. After reviewing the results and revised management guidance, we are reducing our FY08 and FY09 EPS estimates and downgrading our recommendation on the shares to a Sell.

At the current price level, shares of HIG trade at 0.48x its September 30, 2008 reported book value of $41.80 per share and 0.36x its adjusted book value (excluding AOCI) of $55.63 per share. It is difficult to anticipate significant price-to-book value multiple expansion at this point in time due to the challenging environment, as we expect the company to face increased competition and higher losses in the investment portfolio in the coming quarters.

As such, our six-month price target of $8.50 per share incorporates values for both the P&C and Life segments at 0.21x our estimated book value of $40.00 per share (excluding AOCI) as of March 31, 2009. This price target also equates to 1.5x our estimated earnings for the year 2008.

Latest Posts on the Zacks Analyst Blog:

Chesapeake Energy Corp. (NYSE: CHK)

Oklahoma-based Chesapeake Energy Corp. is an independent oil and gas company engaged in the acquisition, development and production of onshore U.S. natural gas resources. The company has grown rapidly and now ranks as a leading U.S. natural gas producer.

At the end of the quarter, Chesapeake's proved reserves stood at approximately 12.1 Tcfe, compared to 12.2 Tcfe at the end of the second quarter of 2008. During the first nine months of the year, the company replaced its 630 Bcfe of production with an estimated 1.83 Tcfe of new proved reserves for a reserve replacement rate of 290%. At the end of the third quarter of 2008, debt-to-capitalization ratio stood at 46.6%, compared to 55.9% at the end of the second quarter of 2008.

Coca-Cola FEMSA S.A. de C.V. (NYSE: KOF)

We are keeping our Buy recommendation on Coca-Cola FEMSA. The company posted slightly lower-than-expected results for the third quarter of 2008 due to losses in derivatives and currency exchange losses, but the results in the Mercosur division were particularly impressive.

We believe that, going forward, new lines of business combined with the recent acquisitions will enhance its top-line growth despite the difficult economic environment throughout the world, including Mexico. Being a producer of an inexpensive, daily-use product, focused on domestic markets, KOF is less exposed to the international credit crisis.

Orchid Cellmark Inc. (Nasdaq: ORCH)

Orchid Cellmark is a leading provider of DNA testing services for forensic, human identity and agricultural applications in the U.S. and the U.K. The company is also the world's largest provider of scrapie susceptibility genotyping. Orchid Cellmark is now leveraging its expertise in DNA testing to enter into new markets like pork traceability, immigration testing and security applications.

Recent market conditions have left the stock trading close to the 52-week low. We expect the company to benefit from the accretive effect of the ReliaGene acquisition in the second half of 2008. Additionally, revenue from the mega tender in the U.K. will positively impact the company's topline in 2009.

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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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