S.S. Corporation (Pvt) Ltd.
Textile Plaza M.A Jinnah Road
Karachi, Pakistan August -23 2011
Phone: +92-21-32430867-32420509
Market Snapshot
Archives
Tuesday August 23, 2011 (04:30 PM EDT)
S&P Market Commentary
... Stocks closed sharply higher as recent sell-offs led to bargain hunting, fueled by FDIC data showing fewer
"problem" banks and investor speculation that the government will take steps to bolster the economy. Banks were
among the biggest winners. An afternoon East Coast earthquake had little impact on trading, which was moderately
active. Crude futures rose on hopes for improving demand. So-called safer havens, including gold, the dollar index
and Treasuries fell as investor demand for risk rose, even though data today showed drops in U.S. new home sales
and the Richmond Fed index./
The Outlook's Market Insight
Update on 19-08- 2011
S&P Stock Picks and Pans
Archives
Tuesday August 23, 2011 (04:00 PM EDT)
FORWARD AIR CORP., TEMPLE-INLAND INC., WILLIAMS-SONOMA INC., PATTERSON COMPANIES INC.
S&P REITERATES HOLD OPINION ON SHARES OF FORWARD AIR CORP(FWRD24.83 ) : Given increased stock
market volatility and likely push-out of a significant U.S. economic recovery, we now think the shares should trade
more towards the lower end of FWRD's 5-year historical P/E range of 11.0X-77.3X reported EPS. As a result, we
have lowered our 12-month target price by $4 to $29, valuing the shares at 16.6X the '12 Capital IQ consensus EPS
estimate of $1.75. FWRD is likely to continue to see tepid revenue growth with improving margins on yield
improvement and good cost control. Timing into improvement in tonnage volumes and revenues remains limited.
S&P RAISES RECOMMENDATION ON SHARES OF TEMPLE-INLAND TO BUY FROM HOLD(TIN20.20 ) : TIN is
down nearly 20% in trading today due to a $1-billion lawsuit filed by the trustee of a failed financial unit TIN spun off in
2007. This matter had been previously disclosed by TIN, and the company says it has no legal liability related to the
spinoff. We believe the drop in the share price will make it easier for International Paper (IP 24 ****) to complete its
proposed offer for TIN, likely at a lower price than its current offer of $30.60 in cash. We lower our 12-month target
price to $27 from $33 to reflect a lower expected premium.
S&P REITERATES HOLD RECOMMENDATION ON SHARES OF WILLIAMS-SONOMA(WSM29.21 ) : Excluding
one-time items, Jul-Q EPS of $0.37, vs. $0.31, is $0.01 above our estimate. While revenue growth of 5.1% came in
slightly below our view, WSM widened gross margins by 90 bps on decreased occupancy costs. We are concerned
that the weak economy and stock market decline will impact sales over the critical holiday season, but think WSM will
continue to manage expenses well in the near term. We are keeping our FY 12 (Jan.) and FY 13 operating EPS
estimates of $2.21 and $2.47, but cutting our DCF-based target price by $7 to $35 on our reduced long-term sales
outlook.
S&P REITERATES HOLD OPINION ON SHARES OF PATTERSON COMPANIES(PDCO28.45 ) : The Capital IQ
consensus EPS forecast for Q1 FY 12 (Apr.) is $0.44, vs. $0.45. PDCO reports Q1 results 8/25. We expect a modest
advance in FY 12 sales, driven by gains in major dental and veterinary product lines. However, we think sales of high
high-ticket items will be impacted by slowing economic trends and government measures to curtail growth in
healthcare spending. Depreciation and options expense are also expected to rise sharply. We trim our target price by
$4 to $32, a peer 16.3X consensus FY 12 EPS forecasts of $1.96 (versus our prior $2.00 forecast).
1
S.S. Corporation (Pvt) Ltd.
Textile Plaza M.A Jinnah Road
Karachi, Pakistan August -23 2011
Phone: +92-21-32430867-32420509
Industry in Focus
Update on 17-08- 2011
S&P Focus Stock of the Week
Update on 22-08- 2011
STARS Changes
Date Symbol Company Name New Ranking Old Ranking Reason
08/23/11 BRO Brown & Brown Valuation
08/23/11 TIN Temple-Inland Valuation
08/22/11 AMZN Amazon.com In Valuation
08/22/11 SAM Boston Beer C Valuation, increased competition
08/22/11 GOOG Google Inc. Valuation
08/22/11 LZB La-Z-Boy Inc. Weaker macro environment
08/22/11 NFLX Netflix, Inc. Valuation
08/19/11 CVLT CommVault Sys Weakening macro environment
08/19/11 HIBB Hibbett Sport Valuation
08/19/11 JASO JA Solar Hold Valuation
08/19/11 LDK LDK Solar Co. Valuation
08/19/11 HOT Starwood Hote Valuation
08/18/11 BBY Best Buy Co. Valuation
08/18/11 CNX CONSOL Energy To sell 50% interst in Marcellus to NB
08/18/11 EMC EMC Corporati Weaker macro environment
08/18/11 HRB H&R Block, In Valuation
08/18/11 NTAP NetApp, Inc. Weakening macro environment
08/18/11 PETM PetSmart, Inc Valuation
08/18/11 STX Seagate Techn Lower demand, rising input costs
08/18/11 SJM The J. M. Smu Valuation
08/18/11 WDC Western Digit Weaker macro environment
08/17/11 CHS Chico's FAS I Valuation
08/17/11 KEP Korea Electri Valuation
08/17/11 HAIN The Hain Cele Slower U.S. economic growth concerns
Economic Calendar
Archives
Tuesday August 23, 2011 (02:13 PM ET)
Calendar of Upcoming Economic Events
AE Street
2
S.S. Corporation (Pvt) Ltd.
Textile Plaza M.A Jinnah Road
Karachi, Pakistan August -23 2011
Phone: +92-21-32430867-32420509
Date Time Release For Forecast Median Last
08/23/11 07:45 US ICSC-Goldman Sachs 08/20 -1.0% A -1.5%
08/23/11 08:55 US Redbook 08/20 0.2% A 0.6%
08/23/11 10:00 US New Home Sales JUL 0.298M A 0.315M 0.300M R
08/23/11 10:00 US Richmond Fed Index AUG -10 A -1
08/23/11 10:00 US Mass Layoff Actions JUL 1,579 A 1,532
08/23/11 10:00 US Separated Workers JUL 145.0K A 143.4K
Economic Insight
Update on 22-08- 2011
Economic Brief
Update on 18-08- 2011
World on Street
Tuesday August 23, 2011 (04:00 PM EDT)
TIVO INC., HEICO CORP., AMERESCO, INC.
CARIS UPGRADES TIVO (TIVO) TO ABOVE AVERAGE FROM AVERAGE(TIVO) : Analyst David Miller tells
salesforce, in tandem with recent market volatility, TIVO shares have fallen back below $8 (yesterday's close), a level
he sees as constructive considering the current risk/reward profile, not counting the take-out of TIVO as pure
optionality. Says with multiple irons in the fire as it applies to commercial deals, a more streamlined process on the
litigation front, a $100M buyback in place, a favorable NOL position, and a unique UI which amalgamates both linear
and online content, upgrades, with a target of $11. S.Trombino
WEDBUSH UPGRADES HEICO (HEI) TO OUTPERFORM FROM NEUTRAL(HEI) : Analyst Kenneth Herbert tells
salesforce he believes HEI represents relatively lower risk opportunity, but with still strong fundamentals, outlook.
Views recent pullback -- off 23% from 7/8 high as compared to 17% drop in S&P 500 -- as representing a better entry
point for stock. Notes HEI is due to report Q3 results after close on 8/24; consistent with prior quarters, he's looking
for slight beat to consensus, with a raise in its full-year guidance. Raises $0.42 Q3 EPS est. to $0.43, $1.65 FY 11
(Oct) to $1.69, $1.95 FY 12 to $1.97. Raises $51 target to $55. B.Brodie
WEDBUSH INITIATES COVERAGE OF AMERESCO (AMRC) WITH OUTPERFORM, $17 TARGET(AMRC) :
Analyst Craig Irwin tells salesforce he believes AMRC is well positioned for growth in its Energy Savings Performance
Contracts, which are typically structured as budget-neutral projects followed by a long-term operational&maintenance
services agreement. Notes stock weakened recently on confusion about Federal budget appropriations risk.
However, resolution of re-compete language for Federal contracts has improved visibility, should support re-
acceleration in this core market, in his view. Forecasts $0.79 '11 EPS, $0.95 '12. B.Egli
3
S.S. Corporation (Pvt) Ltd.
Textile Plaza M.A Jinnah Road
Karachi, Pakistan August -23 2011
Phone: +92-21-32430867-32420509
Market Movers
Tuesday August 23, 2011 (04:00 PM EDT)
Movers: PHARMERICA CORPORATION,TEMPLE-INLAND INC.,PERFECT WORLD CO., LTD.
PHARMERICA CORPORATION(PMC) : PMC confirms that it previously received and rejected an unsolicited
conditional proposal from OMNICARE to acquire co. for $15.00 per share in cash, subject to due diligence and
regulatory approvals. Says its Board of Directors, after consultation with its financial and legal advisors, unanimously
determined that the OCR proposal, which was first made on July 19, 2011, undervalues PMC and is not in the best
interest of PMC or its stockholders.
TEMPLE-INLAND INC.(TIN) : TIN says in 8-K it was named as a defendant in a lawsuit filed in US District Court for
the Northern District of Texas captioned Tepper v. Temple-Inland Inc. Says lawsuit alleges, among other things, that
TIN and certain of its affiliates, officers, and directors caused the failure of Guaranty Financial Group and its wholly-
owned subsidiary, Guaranty Bank. S&P upgrades to buy from hold.See
PERFECT WORLD CO., LTD.(PWRD) : PWRD posts RMB 6.50 vs. RMB 4.19 Q2 non-GAAP EPADS on 32%
revenue rise. Sees Q3 revenues of RMB 756M - RMB 803M, up 15%-22% y/y. ThinkEquity upgrades to buy from
hold.See
MELCO CROWN ENTERTAINMENT LTD.(MPEL) : MPEL posts $0.13 Q2 GAAP EPADS vs. $0.06 loss on 67%
higher net revenue. Capital IQ consensus forecast was $0.11 EPADS.
TRINA SOLAR LIMITED(TSL) : TSL posts $0.17 vs. $0.52 Q2 earnings per ADS as higher op. expenses offset 56%
revenue rise. For Q3, expects to ship between 480 MW to 520 MW of PV modules. S&P keeps buy.See
ARM HOLDINGS PLC(ARMH) : ARMH shares seen higher on unconfirmed takeover speculation.
HEICO CORP.(HEI) : Wedbush upgrades HEI to outperform from neutral. Co. unavailable.See
COACH, INC.(COH) : Jefferies upgrades COH to buy from hold. Co. unavailable.See
MEDTRONIC, INC.(MDT) : MDT posts $0.79 vs. $0.80 Q1 non-GAAP EPS despite 7% rise in revenue (2% rise after
adjusting for a favorable forex impact). Capital IQ consensus forecast was $0.79. Co. says Q1 results showed growth
across many of its businesses, with notable exception of ICDs and spinal products. For FY 12, still sees 1%-3%
revenue growth on constant currency basis, $3.43-$3.50 EPS (incl. items). S&P keeps hold.See
USA TRUCK INC.(USAK) : USAK expects to report a net loss in Q3, but says it is too early in Q3 to predict a range
of expected net loss. Believes main factor is a temporary but significant decrease in efficiency of co.'s truckload
operations associated with its efforts in implementing its new enterprise management software. Morgan Keegan cuts
estimate, target.See
TUESDAY MORNING CORP.(TUES) : TUES posts $0.03 Q4 loss vs. $0.03 EPS on 4.5% lower same-store sales,
3% lower total sales. Capital IQ consensus forecast was $0.04 loss. Sees $0.22-$0.26 FY 12 EPS on net sales in the
range of $828M-$834M, with comp store sales in the negative low single digits. Capital IQ consensus forecast is
$0.13 FY 12 EPS, $818.9M revenue. Sets $5 million stock buyback. Avondale raises estimate.See
ALPHA NATURAL RESOURCES, INC.(ANR) : ANR sets $600 million stock buyback. UBS maintains buy, $17 target
price.See
NVIDIA CORPORATION(NVDA) : Wells Fargo upgrades NVDA to outperform from market perform.See
UNIVERSAL DISPLAY CORP.(PANL) : PANL, Samsung Mobile Display Co., Ltd. (SMD), ink deals under which co.
will license its technologies and sell its proprietary materials to SMD for use in its line of state-of-the-art OLED display
products.
GLEACHER&COMPANY, INC(GLCH) : GLCH says it is exiting its underperforming non-core Equities business,
effective immediately, affecting 62 jobs. Under its new strategic plan, GLCH will continue to service clients through its
fixed income business, and will realign and invest in its core investment banking practice.
4
S.S. Corporation (Pvt) Ltd.
Textile Plaza M.A Jinnah Road
Karachi, Pakistan August -23 2011
Phone: +92-21-32430867-32420509
LINDSAY CORPORATION(LNN) : Janney upgrades LNN to buy from neutral.See
CORINTHIAN COLLEGES INC.(COCO) : COCO posts $0.05 vs. $0.38 Q4 EPS from cont. ops on 12% lower net
revenue. Q4 FY 12 adj. EPS (excl. impairment charge and related tax effect) was $0.13. Capital IQ consensus
forecast was $0.12 EPS. For Q1, co. sees $0.02-$0.04 adj. loss on $414M-$424M revenue. Capital IQ consensus
forecast was $0.15 EPS. S&P keeps hold. BMO Capital maintains market perform.See
FOCUS MEDIA HOLDING LTD.(FMCN) : FMCN posts $0.44 vs. $0.30 Q2 per ADS. For Q3, expects net revenues
for the core business to be in the range of $175M-$177M, net revenues for the non-core business are expected to be
in the range of $11M-$13M, non-GAP net income is expected to be in the range of $68M-$70M, which excludes any
contribution from its 15% stake in VisionChina.
AMERESCO, INC.(AMRC) : Wedbush initiates coverage of AMRC with outperform, $17 target. Co. unavailable.See
REALPAGE, INC.(RP) : RP announces it has entered into an agreement to acquire Multifamily Technology Solutions,
Inc., which offers an Internet listing service for rental properties marketed under the trade name MyNewPlace and a
suite of syndication and organic lead generation tools marketed under the trade name Rent Engine, for about $63.6M
in cash and about $10.8M paid with shares of RP stock.
VIRTUSA CORP.(VRTU) : VRTU to be added to the S&P SmallCap 600 index after the close of trading on Monday,
August 29, 2011, replacing SFN GROUP INC., which is being acquired.
GT ADVANCED TECHNOLOGIES INC.(GTAT) : GTAT to be added to the S&P SmallCap 600 after the close of
trading Wednesday, August 24, 2011, replacing RADIANT SYSTEMS INC., which is being acquired.
Fund Strategies
Update on 11-08- 2011
Neural Fair Value 25 Additions
Company Name Ticker Price
08/23/2011
Company Name Ticker Price Rank
RUBICON TECHNOLOGY, IN RBCN 12.16 55A
Neural Fair Value 25 Deletions
08/23/2011
Company Name Ticker Price Rank
DISH NETWORK CORP. DISH 23.10 41D
High Yield Stocks
5
S.S. Corporation (Pvt) Ltd.
Textile Plaza M.A Jinnah Road
Karachi, Pakistan August -23 2011
Phone: +92-21-32430867-32420509
High Yielding 3/4/5 Star Stocks
(as of 08/22/2011 close)
Company Name Symbol Yield%
CENTURYLINK, INC. CTL 8.5
PITNEY BOWES INC. PBI 8.1
CINCINNATI FINANCIAL CORP. CINF 6.3
ENTERPRISE PRODUCTS PARTNERS LP EPD 6.3
PENNSYLVANIA REAL ESTATE INVESTMENT TRUST PEI 6.3
NATIONAL RETAIL PROPERTIES, INC. NNN 6.2
HEALTH CARE REIT INC. HCN 6.1
AT&T, INC. T 6.0
REYNOLDS AMERICAN INC. RAI 5.9
ALTRIA GROUP INC. MO 5.8
SUN LIFE FINANCIAL INC. SLF 5.8
FEDERATED INVESTORS, INC. FII 5.8
HUDSON CITY BANCORP, INC. HCBK 5.8
HCP, INC. HCP 5.7
BCE, INC. BCE 5.3
ENTERGY CORPORATION ETR 5.3
FIRSTENERGY CORP. FE 5.3
PPL CORPORATION PPL 5.1
SCANA CORP. SCG 5.0
EXELON CORPORATION EXC 5.0
DTE ENERGY CO. DTE 4.9
WEINGARTEN REALTY INVESTORS WRI 4.9
PAYCHEX INC. PAYX 4.9
SOVRAN SELF STORAGE INC. SSS 4.8
AGL RESOURCES INC. AGL 4.8
BRISTOL-MYERS SQUIBB COMPANY BMY 4.7
SOUTHERN COMPANY SO 4.7
BANK OF HAWAII CORPORATION BOH 4.7
S&P Platinum Portfolio
Return Year To Date through 07/31/2011
Platinum Portfolio S&P 500
+5.16 +2.75
See Below For Historical Performance
08/23/2011
Company Name Ticker
FairVal Price FVal Star Ranking
ADVANCE AUTO PARTS INC. AAP 62.70 58.00 4
AEROPOSTALE, INC. ARO 15.20 10.70 5
APPLE INC. AAPL 405.20 356.00 5
6
S.S. Corporation (Pvt) Ltd.
Textile Plaza M.A Jinnah Road
Karachi, Pakistan August -23 2011
Phone: +92-21-32430867-32420509
ASPEN INSURANCE HOLDING AHL 32.80 23.90 5
AVNET INC. AVT 38.80 24.80 5
CELGENE CORPORATION CELG 64.60 54.70 5
CHEVRON CORPORATION CVX 97.80 93.30 4
CISCO SYSTEMS, INC. CSCO 18.80 15.10 5
CLIFFS NATURAL RESOURCE CLF 76.60 67.60 4
COACH, INC. COH 46.00 46.00 3
COMPUTER SCIENCES CORPO CSC 41.40 26.90 5
CSG SYSTEMS INTERNATION CSGS 18.60 12.90 5
CVS CAREMARK CORPORATIO CVS 32.00 32.40 3
DELL INC. DELL 17.80 14.00 5
DREAMWORKS ANIMATION SK DWA 17.10 18.90 2
EXPRESS SCRIPTS INC. ESRX 51.90 44.90 5
EXXON MOBIL CORPORATION XOM 71.80 69.80 4
FEDEX CORPORATION FDX 81.00 73.20 4
FIFTH THIRD BANCORP FITB 11.40 9.30 5
FISERV, INC. FISV 58.40 51.40 5
GAMESTOP CORP. GME 34.70 21.60 5
GENERAL MILLS, INC. GIS 30.60 35.80 2
GILEAD SCIENCES INC. GILD 49.60 37.20 5
GOOGLE INC. GOOG 587.00 490.90 5
HARRIS CORP. HRS 40.80 34.80 5
HEWLETT-PACKARD COMPANY HPQ 30.90 23.60 5
HOLLYFRONTIER CORPORATI HFC 81.00 66.80 5
INTERNATIONAL BUSINESS IBM 172.60 157.50 4
JACOBS ENGINEERING GROU JEC 40.90 31.90 5
JOHNSON CONTROLS INC. JCI 28.40 28.80 3
KYOCERA CORP. KYO 128.40 90.10 5
MARVELL TECHNOLOGY GROU MRVL 16.20 12.70 5
MEDTRONIC, INC. MDT 41.60 31.30 5
MEMC ELECTRONIC MATERIA WFR 15.10 5.80 5
METROPCS COMMUNICATIONS PCS 12.40 10.30 5
MICROSEMI CORP. MSCC 19.50 15.00 5
MONOLITHIC POWER SYSTEM MPWR 14.70 11.50 5
MYLAN, INC. MYL 20.40 17.80 5
NICE SYSTEMS LTD. NICE 30.00 28.00 4
ORACLE CORPORATION ORCL 32.50 24.80 5
PHILIP MORRIS INTERNATI PM 62.00 68.80 2
RANDGOLD RESOURCES LIMI GOLD 164.40 110.00 5
RIO TINTO PLC RIO 67.00 56.00 5
ROYAL DUTCH SHELL PLC RDS.A 70.80 61.70 5
THE CHUBB CORPORATION CB 72.30 58.80 5
THE TRAVELERS COMPANIES TRV 49.40 49.50 3
THERMO FISHER SCIENTIFI TMO 55.90 50.50 4
WAL-MART STORES INC. WMT 54.60 52.30 4
WESTERN DIGITAL CORP. WDC 33.20 26.40 5
XEROX CORP. XRX 9.30 7.30 5
Platinum Portfolio Performance
Year Platinum(%) S&P 500(%)
2010 17.42 12.78
2009 34.23 23.45
2008 -44.47 -38.49
2007 4.85 3.53
2006 12.97 13.62
2005 10.63 3.0
2004 10.74 8.99
7
S.S. Corporation (Pvt) Ltd.
Textile Plaza M.A Jinnah Road
Karachi, Pakistan August -23 2011
Phone: +92-21-32430867-32420509
2003 45.45 26.38
2002 -35.52 -23.37
2001 -0.27 -13.05
2000 18.61 -10.14
1999 75.98 19.53
1998 20.54 26.67
1997 17.42 31.01
1996 34.32 20.26
Morning Star Rating
Company Name Ticker Morningstar Rating Change from Business Risk Industry Secto
Previous Day
Eastman Kodak Company EK +1 Spec. Leisure Con
Analyst Blog
Cooper Recalls Avaira Toric Lenses
Posted Tue Aug 23, 06:13 pm ET
by Zacks Equity Research
CooperVision, a unit of The Cooper Companies Inc. (COO), has voluntarily recalled certain lots of its Avaira Toric
contact lenses. The recall is based on the presence of a residue on these lenses, which was found following the
investigation of a small number of complaints of temporary blurred vision and discomfort.
The California-based company also noted that no other products (other than the specific batches of Avaira Toric)
made by CooperVision were involved in the recall.
Copper stated that a resolution of the manufacturing issue is in process and expects shipment of the Avaira Toric
lenses to resume shortly and inventory to return to normal levels by December 1, 2011. The company will create a
reserve for return of inventory and associated matters, currently estimated to be roughly $14 million.
The Avaira Toric lenses hit the market in April 2010. Avaira Toric, geared to ensure a reliable outcome for a wide
range of astigmatic patients regardless of their condition, further reinforce the company’s product mix. According to
Cooper, these lenses accounted for less than 1% of its sales in third-quarter 2011. The company is expected to
release its results for the quarter on August 31 and provide more details on the recall issue in the earnings call.
Cooper is a global medical products company specializing in a wide range of contact lenses for the vision correction
market with a smaller strategic business unit for women’s health. It holds the number three position in the $6 billion
global contact lens industry.
Cooper is a leader in the high-margin toric lens market. It offers multiple designs of toric lenses, across a wide range
of parameters, unlike some of its competitors, who offer toric lenses in a limited number of designs. The company is
benefiting from strong demand for its Biofinity toric lenses.
8
S.S. Corporation (Pvt) Ltd.
Textile Plaza M.A Jinnah Road
Karachi, Pakistan August -23 2011
Phone: +92-21-32430867-32420509
However, Cooper faces formidable competition in each of its major product lines. Competition comes from globally
well established contact lens makers such as Johnson & Johnson (JNJ) and Novartis (NVS). Depressed levels of
consumer spending have heightened the competitive pressures on the company. Our Outperform recommendation
on the stock is backed by a short-term Zacks #2 Rank (Buy).
Fast Track Status for Bayer's Drug
Posted Tue Aug 23, 05:59 pm ET
by Zacks Equity Research
Recently the US Food and Drug Administration (FDA) granted fast track status to Bayer’s (BAYRY) cancer candidate
alpharadin. The designation has been granted to the candidate for treating castration-resistant (hormone refractory)
prostate cancer in patients with bone metastases.
The fast track program not only facilitates the development but also expedites the review of drugs which are
developed for treating serious diseases. The market for such diseases has a huge unmet medical need.
The receipt of such a designation from the FDA ensures frequent communication of the concerned company with the
US regulatory body during the drug development and review process. The frequent dialogue ensures quicker
resolution of the queries of the FDA regarding the drug, often leading to faster approval.
The move by the FDA to grant such a status to Bayer’s candidate is highly encouraging since prostate cancer is the
most common form of cancer affecting men in the US. We note that the primary reason behind disability and death in
patients suffering from castration-resistant prostate cancer are bone metastases.
We remind investors that in June 2011, Bayer presented encouraging interim data from a phase III trial, which
evaluated alpharadin in patients suffering from castration-resistant prostate cancer and symptomatic bone
metastases. Results revealed that treatment with alpharadin improved overall survival compared to the patients in the
placebo arm.
The study was stopped based on the recommendation of the Independent Data Monitoring Committee (IDMC). Bayer
intends to present detailed results from the study at an upcoming medical conference.
Our Recommendation
Currently, we have a Neutral stance on Bayer in the long run. The company carries a Zacks #4 Rank (Sell rating) in
the short run.
ReneSola Under Repurchase Program
Posted Tue Aug 23, 05:47 pm ET
by Zacks Equity Research
Leading global manufacturer of solar products, ReneSola Ltd. (SOL), may repurchase up to $100 million in
aggregate value of the company's outstanding ordinary shares under its share repurchase program.
Within a limited period, ReneSola is authorized to execute its buyback program, depending on market conditions,
share price and other factors. The company is also permitted to make one or more purchases on the open market or
in privately negotiated transactions.
9
S.S. Corporation (Pvt) Ltd.
Textile Plaza M.A Jinnah Road
Karachi, Pakistan August -23 2011
Phone: +92-21-32430867-32420509
Recently, ReneSola Ltd. reported second quarter 2011 adjusted earnings per American Depositary Share (“EPADS”)
of 5 cents, falling short of the Zacks Consensus Estimate of 15 cents and the year-ago quarterly earnings of 42 cents
per share.
ReneSola at the end of the reported quarter had cash and cash equivalents of $480.8 million, compared with $435.9
million at the end of the sequentially preceding quarter. Total debt was $560.7 million, compared with $522.8 million
at the end of the first quarter of 2011. With this healthy cash position, the company believes that the share
repurchase program will generate value for its shareholders.
ReneSola enjoys a geographically diversified customer base, ongoing expansion programs, a subsidy program in
China, and improving operating efficiencies. Despite relatively weak capital markets and a challenging solar market,
the company is confident of the long-term prospects of its business.
Going forward, the company expects to benefit from its Virtus wafer technology, increasing in-house polysilicon
production and its strong leadership position in wafer production to capitalize on new opportunities.
However, the near-term valuation of the company will be adversely impacted by apprehensions over tepid module
demand in Europe, subsidy roll-back in Germany, rising competition, credit risk from its customers and the company’s
high research and development expenses. The company presently retains a short-term Zacks #4 Rank (Sell). We
have a long-term Neutral recommendation on the stock.
ReneSola, based in China, is a leading global manufacturer of solar wafers and producer of solar power products.
Capitalizing on proprietary technologies, economies of scale, low-cost production capabilities and technological
innovations and know-how, ReneSola leverages its in-house virgin polysilicon, solar cell and module production
capabilities to provide its customers with high-quality, cost-competitive solar wafer products and processing services.
The company possesses a global network of suppliers and customers that includes some of the leading
manufacturers of solar cells and modules. The company competes with LDK Solar Co. Ltd. (LDK) and MEMC
Electronic Materials Inc. (WFR) among others.
Bull of the Day
CIGNA Corporation (CI)
By: Zacks Equity Research
August 24, 2011 | Comments: 0
Recommended this article (0)
CI
CIGNA Corporation's (CI - Analyst Report) second quarter core earnings were fairly ahead of the Zacks Consensus
Estimate well as the year-ago quarter's earnings. Better-than-expected results were aided by strong earnings across
the board. Earnings per share (EPS) also benefited from a lower share count compared with the year-ago quarter.
The company is aggressively expanding its international operations, which will likely drive future growth. Moreover,
CIGNA has lower exposure to reform risks than other insurers, and thus has an edge with respect to the Healthcare
Reform Act. A strong balance sheet and adequate liquidity will further lead to continued share buybacks, thereby
contributing to the bottom line. Moreover, membership enrollment has increased.
Our six-month target price of $49.00 equates to about 9.2x our earnings estimate for 2011. We view $0.16 per
common share annual dividend as secure, implying an expected return of about 20.0% over that period.
10
S.S. Corporation (Pvt) Ltd.
Textile Plaza M.A Jinnah Road
Karachi, Pakistan August -23 2011
Phone: +92-21-32430867-32420509
Bear of the Day
Computer Sciences Corp. (CSC)
By: Zacks Equity Research
August 24, 2011 | Comments: 0
Recommended this article (0)
CSC
Computer Sciences Corp. (CSC - Analyst Report) is one of the leading players in the information technology (IT)
services industry. We are apprehensive about the intense competition in the IT and cloud computing space from both
small and big players such as Accenture and Hewlett-Packard.
Moreover, with government orders expected to dry up to a certain extent and the National Health Services realization
getting pushed to future quarters, things look difficult for the company. Moreover, the demand for the company's
products in Europe is not encouraging for the upcoming quarters.
While we are positive on the company we are a bit concerned about the competition it faces from larger players and
its high outstanding debt. We maintain an Underperform rating on CSC and set a price target of $27.00, representing
a P/E of 5.9x our 2012 EPS estimate.
Aggressive Growth
Rocky Brands, Inc
By: Bill Wilton
August 24, 2011 | Comments: 0
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RCKY
Rocky Brands, Inc. (RCKY - Snapshot Report) has done a fantastic job of eliminating costs to boost its bottom line
further than anyone expected.
Estimates are rising, and have been for a while, driving share to a Zacks #1 Rank (Strong Buy).
Company Description
Rocky Brands, Inc. makes footwear and apparel under several brand names including Rocky, Durango and licenses
brands like Michelin. Styles range from western to work boots.
Big Surprise
On Jul 26 saw a nice spike in net income despite more outstanding shares than last year. The bottom line grew $1.8
million, to $2.3 million. EPS was $0.30 up from just $0.08 a year ago after more than 900,000 additional shares were
available.
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S.S. Corporation (Pvt) Ltd.
Textile Plaza M.A Jinnah Road
Karachi, Pakistan August -23 2011
Phone: +92-21-32430867-32420509
Sales for the period were off slightly, at $52.3 million versus $55.2 million, but big improvements in operating
efficiencies led to the better than expected earnings. Analysts polled by Zacks were expecting EPS to be $0.20,
giving Rocky Brands its eighth consecutive surprise.
Rising Estimates
Analysts raised full-year projections for both this year and 2012. The 2011 Zacks Consensus Estimate is up a dime,
to account for the surprise, putting the expected growth rate at 24%.
Estimates for 2012 are also up a dime, to $1.71, giving Rocky Brands a 12% expected growth rate. Thanks to the
rising estimates and sell off, the valuations have gotten pretty enticing.
The forward P/E is at just 7 times and the PEG is at 0.7. Shares are going for 0.33 times sales and just under book
value.
Zoom Out
While it would be nice to see top-line growth driving earnings rather than margin improvement, but it is hard to argue
with the earnings outlook. Earnings have been climbing steadily both year over year and throughout each year. That
is a hard trend to ignore.
Bill Wilton is the Aggressive Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the Zacks
Small Cap Trader service
Growth & Income
Walgreen Co.
By: Todd Bunton
August 24, 2011 | Comments: 0
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WAG
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S.S. Corporation (Pvt) Ltd.
Textile Plaza M.A Jinnah Road
Karachi, Pakistan August -23 2011
Phone: +92-21-32430867-32420509
Investors looking for strong growth and solid income at a reasonable price should take note of Walgreen Co. (WAG -
Analyst Report).
The company recently reported a 38% increase in third quarter EPS on solid sales growth and margin expansion.
Based on consensus estimates, analysts are projecting 24% EPS growth this year and 14% growth next year.
Walgreens also generates exceptionally strong free cash which it has been using to buy back shares and
aggressively raise its dividend. It currently yields a solid 2.6%.
Valuation is attractive too, with shares trading at just 11.7x forward earnings.
Company Description
Walgreen Co. is primarily a retail drugstore chain that sells prescription and non-prescription drugs and general
merchandise. It operates over 8,100 locations in all 50 states, the District of Columbia, Guam and Puerto Rico.
The company was founded in 1901 and is headquartered in Deerfield, Illinois. It has a market cap of $31.3 billion.
Third Quarter Results
Walgreens reported strong third quarter earnings on June 21. Earnings per share came in at 65 cents, beating the
Zacks Consensus Estimate by 3 cents. It was a stellar 38% increase over the same quarter in 2010.
Sales rose 7% to $18.371 billion, slightly ahead of the Zacks Consensus Estimate of $18.352 billion. Same-store
sales were up a solid 4.1% while customer traffic in comparable stores was up 1.7%.
Prescription sales, which made up 65% of total sales in the quarter, increased 6%. Private label products continued
their strength as consumers continue to shop for value.
Gross profit as a percentage of sales improved 50 basis points to 28.1% due to an increase in higher margin generic
drug sales. Operating income rose 15% while the operating margin improved from 4.8% to 5.2% of sales.
Solid Growth Ahead
Analysts are projecting strong EPS growth from Walgreens over the next two years. The Zacks Consensus Estimate
for 2011 is $2.62, representing 24% growth over 2010 EPS. The 2012 consensus estimate is currently 14% higher at
$2.99.
It is a Zacks #2 Rank (Buy).
Walgreens is scheduled to report fourth quarter results on September 27. The Zacks Consensus Estimate is 55
cents, representing 12% growth over 2010.
Strong Cash Flow
Walgreens has exceptionally strong cash flow and has been rewarding its shareholders with stock buybacks and
dividend hikes. In the first 9 months of its fiscal 2011, Walgreens generated over $2.5 billion in free cash flow and
bought back nearly $1.4 billion in shares.
Since 2000, the company has increased its dividend at an average annual rate of 17.4%.
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S.S. Corporation (Pvt) Ltd.
Textile Plaza M.A Jinnah Road
Karachi, Pakistan August -23 2011
Phone: +92-21-32430867-32420509
It currently yields a solid 2.6%.
Attractive Valuation
Shares have sold off along with the overall market in the last few weeks, leading to some compelling valuations.
Shares trade at just 11.7x 12-month forward earnings, a significant discount to its 5-year median of 14.8x and the
industry average of 15.2x.
Its PEG ratio is 0.9 based on a 5-year growth rate of 13.6%.
Walgreens price to book ratio of 2.2 is essentially in-line with its peers.
The Bottom Line
With a well-regarded brand name, strong EPS growth projections and a solid dividend, Walgreens looks very
attractive at just 11.7x forward earnings.
Todd Bunton is the Growth & Income Stock Strategist for Zacks Investment Research.
Momentum
Ralph Lauren Corp
By: Michael Vodicka
August 24, 2011 | Comments: 0
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RL
Ralph Lauren Corp (RL - Analyst Report) is hanging tough in the weak market, recently rebound from a key trend
line to push shares back into elevated territory. With a Q2 earnings surprise of 15% and bullish projection, this Zacks
#1 Rank stock is a fashionable take on momentum.
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S.S. Corporation (Pvt) Ltd.
Textile Plaza M.A Jinnah Road
Karachi, Pakistan August -23 2011
Phone: +92-21-32430867-32420509
Company Description
Ralph Lauren Corp is a fashion merchandising company that operates across multiple brands. The company was
founded in 1967 and has a market cap of $11.51 billion.
Ralph Lauren has held up well in the recently volatile market, buoyed by strong Q2 results from early August that
came in well ahead of expectations.
Second-Quarter Results
Revenue for the period was up 32% from last year to $1.5 billion. Earnings also came in strong at $1.90, 31% ahead
of the Zacks Consensus Estimate, where the company has an average earnings surprise of 30% over the last four
quarters.
Wholesales sales were up 29% to $673 million. Retail sales were up 37% to $814 million.
Financial Profile
Ralph Lauren also has a strong financial profile, with cash and short-term investments of $952 million and just $304
million in total debt.
Estimates
We saw some decent movement in estimates off the good quarter, with the current year adding 37 cents to $6.73.
The next-year estimate is pegged at $7.77, a bullish 15% growth projection.
Valuation
On the valuation front, RL's PEG ratio of 1.2 is only marginally higher than the benchmark for value of 1.
12-Month Chart
On the chart, share remain in elevated territory after hitting a new 52-week high on the good quarter. Look for support
from the trend line on any weakness, take a look below.
Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the Zacks
Momentum Trader Service.
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S.S. Corporation (Pvt) Ltd.
Textile Plaza M.A Jinnah Road
Karachi, Pakistan August -23 2011
Phone: +92-21-32430867-32420509
Value
Boston Scientific Corporation
By: Tracey Ryniec
August 24, 2011 | Comments: 0
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BSX
Boston Scientific Corporation (BSX - Analyst Report) is seen as a turnaround story with a single digit stock price
and a forward P/E of 13. But this Zacks #1 Rank (strong buy) recently surprised on the Zacks Consensus Estimate
for the 7th quarter in a row and raised full year guidance.
Boston Scientific is a global company that makes medical devices in a broad range of areas including Cardiology,
Rhythm and Vascular Group, the Endoscopy Division, Urology and Women's Health Division and the
Neuromodulation Division.
Boston Scientific Beat By 11%
On July 28, Boston Scientific kept its winning streak alive as it reported second quarter results which beat the Zacks
Consensus for the 7th time in a row. Earnings per share were 10 cents compared to the consensus of 9 cents.
Net sales rose 2% to $1.98 billion from $1.93 billion last year. However, if you exclude the impact of changes in
foreign currency exchange rates and sales from divested businesses, net sales were flat year over year.
Several of the segments had solid quarters. Neuromodulation sales rose 16%, Peripheral Interventions jumped 7%,
Endoscopy and Urology climbed 6% on a worldwide constant currency basis due to new product introductions.
The company is also ramping up its investment in China. It intends to spend an additional $150 million over the next 5
years to develop local manufacturing capabilities and to build a training center.
It expects headcount in China to grow to 1200 from the current 200 employees.
Raised Full Year Guidance
The company is bullish on the rest of 2011 as it raised its full year guidance to the range of 64 to 70 cents per share
from its prior forecast of 58 cents to 68 cents per share.
After the guidance was raised, the analysts jumped in to raise their estimates as well with the 2011 Zacks Consensus
Estimate jumping to 45 cents from 40 cents in the last 30 days.
While this is an earnings decline of 7% from 2010, analysts believe the company will turn around earnings in 2012
with growth of 17.5%.
BSX Is a Value Stock
Shares haven't done much in the last 3 years.
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S.S. Corporation (Pvt) Ltd.
Textile Plaza M.A Jinnah Road
Karachi, Pakistan August -23 2011
Phone: +92-21-32430867-32420509
But with a forward P/E of 13.6, which is under the 15x cut-off I use for value, Boston Scientific is well within the range
for a value stock.
The company also has a price-to-book ratio of 0.8. A P/B ratio under 3.0 usually means there is value.
With Boston Scientific, investors are getting a turnaround story that is priced cheaply.
Zacks #1 Rank Top Performers
Update on 18-08- 2011
Investment Ideas
Value is the Best Defense
By: Todd Bunton
August 23, 2011 | Comments: 0
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TJX | WMT | AAP | SWM
When the stock market began to tumble in late July, many investors swiftly gave up on equities and ran to the relative
safety of U.S. Treasuries. But the paltry 2.1% yield on the 10-year T-note doesn't provide much comfort.
The recent market weakness and heightened risk of another recession isn't a reason to dump equities altogether,
however.
Attractive Yields
For investors with a long-term time horizon, stocks look pretty attractive right now. The yield on the Dow Jones
Industrial Average is currently 3.2%, and the earnings yield (inverse of the P/E ratio) on the S&P 500 is an attractive
8.4%.
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S.S. Corporation (Pvt) Ltd.
Textile Plaza M.A Jinnah Road
Karachi, Pakistan August -23 2011
Phone: +92-21-32430867-32420509
While recent economic data has been weak and the odds of a recession have risen, there is still a good chance we're
just facing sluggish economic growth for the next couple of quarters. If this is the case, these metrics point to plenty of
upside for stocks.
Moreover, investors should realize that not all stocks will get beaten up if we do enter a recession.
Value is the Best Defense
Studies have shown that the best protection against the loss of capital in a down market isn't earnings growth but
rather valuation. Those former high-flying stocks with irrationally high P/E ratios will get hit the hardest, no matter
what their growth forecasts are. Stocks with low double-digit or single-digit P/E ratios, on the other hand, have much
less downside risk.
Stocks That Bucked the Trend in 2008
Investors may be surprised to learn that there were 30 stocks in the S&P 500 that finished in the green in 2008.
Granted, many were bought out earlier that year, and a few were biotechs with hit products. But take a look at some
of the other top performers from '08:
Family Dollar Stores (FDO - Analyst Report): +36%
Wal-Mart (WMT - Analyst Report): +18%
AutoZone (AZO - Analyst Report): +16%
Hasbro (HAS - Analyst Report): +14%
General Mills (GIS - Analyst Report): +7%
McDonald's (MCD - Analyst Report): +6%
Waste Management (WM - Analyst Report): +1%
Most of these are value-oriented retailers or consumer staples that were trading at reasonable prices before the
crash.
But it's not just about value. Once a bull market resumes, investors want to own stocks with earnings growth potential
so they don't miss out on the upside. The key is to find those stocks that offer both growth and value.
Stocks Bucking the Trend in 2011
The 14% drop in the S&P 500 since July 22 has sent shares of a lot of good companies lower, but it hasn't sunk all
stocks.
Here is a list of value stocks that have held up quite well so far. They also each have strong earnings growth potential
and should rise along with the market when it rebounds:
The TJX Companies, Inc. (TJX - Analyst Report)
Price Change Since July 22: -2%
12-Month Forward P/E: 12.5
This off-price retailer thrived during the Great Recession as middle-income consumers went bargain shopping. As the
economy began to recover, the customers never left. The company continues to churn out positive same-store sales
growth with the unemployment rate north of 9%.
Earnings estimates have been rising consistently over the last few months, sending the stock to a Zacks #2 Rank
(Buy). Based on current consensus estimates, analysts expect 14% EPS growth this year and 12% growth next year.
Advance Auto Parts (AAP - Analyst Report)
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S.S. Corporation (Pvt) Ltd.
Textile Plaza M.A Jinnah Road
Karachi, Pakistan August -23 2011
Phone: +92-21-32430867-32420509
Price Change Since July 22: +4%
12-Month Forward P/E: 11.2
Advance Auto Parts has held up strong in the weak market, much like it did in 2008. The auto parts retailer continues
to benefit from customers holding onto their cars longer and repairing them rather than replacing them.
Analysts are currently projecting 19% EPS growth from AAP in 2011 and 14% growth in 2012. Despite this, shares
trade at just 11.2x forward earnings, a discount to its 10-year historical median of 14.4x.
Wal-Mart Stores Inc. (WMT - Analyst Report)
Price Change Since July 22: -3%
12-Month Forward P/E: 11.1
Wal-Mart is another retailer that has held up well despite the carnage on Wall Street. The stock was one of few to
thrive in 2008 too.
People may think Wal-Mart has no growth prospects left. Analysts disagree. Based on consensus estimates, analysts
project 10% EPS growth this year and 9% growth next year. On top of this growth, the company pays a dividend that
yields a solid 2.8%.
Schweitzer-Mauduit International Inc. (SWM - Snapshot Report)
Price Change Since July 22: -2%
12-Month Forward P/E: 8.5
Schweitzer-Mauduit International Inc. produces premium specialty papers primarily for the tobacco industry. This is
certainly a defensive industry, but the company has excellent growth prospects too.
Analysts are projecting 22% EPS growth in 2011 and 29% growth in 2012. Estimates have risen significantly since
the company delivered solid second quarter results on August 3. It is a Zacks #2 Rank (Buy) stock.
The Bottom Line
If you're worried about further stock market declines, think twice before exiting equities altogether. These value stocks
have all held up well so far, and their growth potential provides plenty of upside if the market turns back around.
Todd Bunton is the Growth & Income Stock Strategist for Zacks Investment Research.
Economic Highlights
August 22: Oil Retreat A Key Positive For The Economy
by Zacks on August 22, 2011
With nothing much on the economic docket for today, stocks will likely get a lift from the emerging Libyan picture. The
resumption of Libya's long-stalled oil supplies in the wake of the imminent collapse of the Qadhafi regime will be a
major boost for the global economy.
Investors will also be closely watching the Fed this week for any clues of further quantitative easing as the annual
Jackson Hole meeting gets underway. It was in the Jackson Hole speech last year that Bernanke had announced the
second round of quantitative easing (QE2). The Fed's QE2 program, which ended last June, gets the credit for
addressing the deflation fears and giving us a stock-market rally.
I am not convinced that we will get anything more than a general discussion of the different policy options from
Bernanke. Recent inflation readings make it difficult for Bernanke to come out with another round of quantitative
easing even if he is otherwise inclined to go that way.
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S.S. Corporation (Pvt) Ltd.
Textile Plaza M.A Jinnah Road
Karachi, Pakistan August -23 2011
Phone: +92-21-32430867-32420509
Libya was the country that seemed to have stalled the gains made by the so-called Arab Spring earlier this year. The
resulting face-off between the NATO-supported rebels and the Qadhafi regime disrupted global oil supplies by
removing Libya's high-quality crude oil from world markets.
For months now, the Libyan situation turned had into a stalemate between the Benghazi-based rebels and the Tripoli-
based Qadhafi regime, with no side appearing to make any headway. But rebels made slid gains this weekend and
the regime appears to be on the run.
The resumption of Libyan crude oil exports following the end of the Qadhafi regime will be a significant net positive for
the global econnomy. Lower oil prices will hasten the downtrend in fuel prices, removing a major drag from consumer
spending. We have yet to see the full extent of the recent downtrend in oil prices show up at the pump. But the timing
lag notwithstanding, the trend is clearly in right direction.
The stabilizing outlook for Libya will also be a net positive for a number of major oil companies that were forced by
the conflict to shut down their operations. Oil major BP (BP) and Italy's Eni (E), among others, will be looking forward
to resuming their operations once hostilities come to an end.
Market News Summary
Stock Market News for August 22, 2011
by Zacks Equity Research on August 22, 2011
Fears of a global downturn dragged the markets down on Friday and benchmarks registered their fourth
consecutive week of losses. While recession worries in US unnerved investors, fears of financial
destabilization on the European front strengthened the bearish mood.
Posting its 10th move of over 100 points in the last 15 trading days, the Dow Jones Industrial Average
(DJIA) shed 172 points or 1.6% to close at 10,817.65. The Standard & Poor 500 (S&P 500) slipped 1.5%
to settle at 1,123.53. The Nasdaq Composite Index dropped 1.6% to finish the day at 2,341.84. The fear-
gauge CBOE Volatility Index (VIX) settled over 43 and is far ahead of the technical level of 30. On the
New York Stock Exchange, consolidated volumes were 5.16 billion shares. For every one stock that
moved up, three stocks were on the declining side. On Friday, the benchmarks posted their biggest four-
week decline since March 2009, and the Dow, S&P 500 and the Nasdaq dropped 4%, 4.7% and 6.6%,
respectively, for the week.
The week had started with gains after merger and acquisition news boosted the indices. However,
disappointing economic reports crippled the markets throughout the rest of the week. Additionally,
concerns about the European financial system also weighed on investor sentiment. On Friday, markets
had initially been trading in the green but fears of bad news from Europe coming to the forefront during
the weekend soon pulled the benchmarks lower.
Two consecutive quarters of economic contraction is popularly believed to be a recession. The Gross
Domestic Product (GDP) growth rate is not providing any encouragement to economists at the moment
and a slew of disappointing economic reports are making matters even worse. JPMorgan Chase & Co.
(NYSE:JPM) slashed its forecast for the fourth quarter economic-growth and now projects the US’ annual
growth to be merely 1%. Earlier, the financial company had projected the growth rate to be 2.5% for the
fourth quarter.
As for the S&P 500, it has now moved below a key-resistance level of 1, 130, with the analysts looking at
1, 100 as the next support level. All of the 10 industry groups in the index traded in the red and the index
is now down 10.7% for the year. Additionally, the S&P 500 has moved down by 17.6% from its closing
high on April 29.
Among the 30 Dow components, only 7 managed to finish higher. These seven stocks posted marginal
gains with American Express Company (NYSE:AXP), Cisco Systems, Inc. (NASDAQ:CSCO), Chevron
Corp. (NYSE:CVX), McDonald's Corp. (NYSE:MCD), Merck & Co. Inc. (NYSE:MRK), Procter & Gamble
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S.S. Corporation (Pvt) Ltd.
Textile Plaza M.A Jinnah Road
Karachi, Pakistan August -23 2011
Phone: +92-21-32430867-32420509
Co. (NYSE:PG), Wal-Mart Stores Inc. (NYSE:WMT) gaining 0.4%, 0.5%, 0.1%, 1.9%, 0.6%, 0.2% and
0.9%, respectively.
As for the decliners in the blue-chip index, Hewlett-Packard Company (NYSE:HPQ) suffered a massive
blow as it plunged 20% and dragged the Dow 45 points lower. The tech-giant also recorded a six-year
closing low. It was the company’s announcement of the possibility of spinning-off its PC business that led
to its downfall on the bourses. Chief executive officer Leo Apotheker unveiled this significant restructuring
plan as the company looks to focus on high-margin and high-growth businesses.
Among other tech bellwethers, Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT),
International Business Machines Corp. (NYSE:IBM) and Intel Corporation (NASDAQ:INTC) declined by
2.7%, 2.5%, 3.8% and 2.9%, respectively.
Company News Summary
Company News for August 22, 2011
by Zacks Equity Research on August 22, 2011
• Sprint Nextel Corp. (NYSE:S) was rumored to be in talks with cable companies and may possibly acquire
Clearwire Corporation (NASDAQ:CLWR)
• AnnTaylor Stores Corp. (NYSE:ANN) posted second quarter earnings per share of $0.47, which surpassed the
Zacks Consensus Estimate of $0.45 per share
• Autodesk, Inc. (NASDAQ:ADSK) reported second quarter 2012 earnings of $0.36 per share, beating the Zacks
Consensus Estimate by $0.02
• Bank of America Corporation (NYSE:BAC) has planned to reduce its workforce of 288, 000 by almost 1% and will
cut 3,500 jobs
• Chief executive officer Leo Apotheker of Hewlett-Packard Company (NYSE:HPQ) announced that the company is
planning to spin-off its PC business
• Jefferies Group Inc. (NYSE:JEF) initiated coverage on American Equity Investment Life Holding Co. (NYSE:AEL)
with a “Buy” rating
• First Analysis upgraded Intuit Inc. (NASDAQ:INTU) to “Overweight” from an “Equal Weight” rating
• Citigroup, Inc. (NYSE:C) initiated coverage on BB & T Corp. (NYSE:BBT) with a “Hold” rating
• Think Equity downgraded LDK Solar Co., Ltd. (NYSE:LDK) to a “Hold” rating from “Buy” rating
Economic Highlights
August 23: Waiting For Bernanke
by Zacks on August 23, 2011
With the domestic economic calendar on the thin side, the market will likely find today's manufacturing data coming
out of Asia and Europe to be reassuring enough. The Libyan situation remains fluid, but it is increasingly becoming
obvious that Qadhafi may not have much time left.
But all eyes are on Bernanke, who will speak about the U.S. economy at the Fed's annual Jackson Hole confab.
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S.S. Corporation (Pvt) Ltd.
Textile Plaza M.A Jinnah Road
Karachi, Pakistan August -23 2011
Phone: +92-21-32430867-32420509
Anticipation has been building that he will repeat his performance from last year and lay out the plans for another
round of quantitative easing.
China's manufacturing purchasing managers index (PMI) for August came in modestly better than expected, showing
improvement over the prior month's reading. The composite PMI reading for the Euro Zone also came in better than
expected, though it stayed steady at the prior month's level. Importantly, Germany's PMI posted decent momentum.
The positive aspect of the Chinese and Euro Zone PMI data is not that it is very good. But rather than it could have
been quite bad. And that counts for something in these grim times.
With respect to the Bernanke watch, I am not looking for announcement of a new quantitative easing program. What
we will get instead is a discussion from the Fed Chief of the different policy options at the central bank's disposal and
their pros and cons. The high inflation readings of recent months make it almost impossible for him to announce
another round of easing.
And as we found from the last FOMC meeting, Bernanke does not have all his members onboard with a fresh round
of monetary easing. Unless growth and inflation readings drop precipitously in the coming months, all the talk of
further easing will likely come to nothing.
On the earnings front, we got a top- and bottom-line beat from H.J. Heinz (HNZ), though rising input costs weighed
on the ketchup-maker's margins. Medtronic (MDT), the largest medical device maker, came out with inline earnings
on a modest revenue beat. Results would have fallen short of expectations without positive contribution from foreign
exhange effects. In other corporate news, we have share buyback announcements from Lowes (LOW) for $5 billion
and Alpha Natural Resources (ANR) for $500 million.
New Home Sales are scheduled for release today at 10:00 AM EST. Our consensus estimate shows this
indicator is expected to decrease to 311,000 from the annual pace of 312,000 reported in June.
Market News Summary
Stock Market News for August 23, 2011
by Zacks Equity Research on August 23, 2011
Markets lacked the conviction to bet big leading to a flat finish for the benchmarks on Monday. A choppy
day of trading was initially spurred by hopes that the Fed chairman would announce another asset-buying
plan on Friday, but lingering concerns about the domestic and global financial situation ensured the
indices ended flat.
The Dow Jones Industrial Average (DJIA) gained 0.3% to settle at 10,854.65. The Standard & Poor 500
(S&P 500) moved up 0.02% to close at 1,123.82, and 6 of its 10 industry groups registered gains. The
Nasdaq Composite Index climbed 0.2% to finish the day at 2,345.38. The fear-gauge CBOE Volatility
Index (VIX) traded roughly over 42. On the New York Stock Exchange, consolidated volumes were 4.8
billion shares. Advancers were outnumbered by the declining stocks on the NYSE, as for every two
stocks that gained, three stocks were on the declining side.
It was another day of wild swings for the Dow as it jumped 200 points in the opening session but ended
with an overall gain of only 37 points. The encouraging start of the blue-chip index was soon reduced to a
mere 2-point gain ahead of the afternoon session and then the index again gained 100 points. The Dow,
as well as the broader markets, had experienced wild swings during the first half of the month and the
Dow had even registered a movement of 400+ points consecutively for four days.
In fact, seven of the thirty Dow components had to settle in the red zone with Bank of America
Corporation (NYSE:BAC) ending up as the biggest laggard as it plunged 7.9%. Interestingly, a similar 7 to
23 ratio had emerged yesterday, but on the contrary those 7 stocks were the gainers. Among the
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S.S. Corporation (Pvt) Ltd.
Textile Plaza M.A Jinnah Road
Karachi, Pakistan August -23 2011
Phone: +92-21-32430867-32420509
individual components, Hewlett-Packard Company (NYSE:HPQ) led the race among the gainers and it
surged 3.6%. It is worth noting that HP had suffered the most yesterday among the Dow components
after it sank 20%. While, the 20% fall of the tech-giant’s stock was spurred by the company’s
announcement that it was considering the possibility of spinning-off its PC business, yesterday’s gains
were sparked after the company revealed a new desktop and cut its TouchPad tablet’s price.
Meanwhile, markets anxiously await the announcement of another asset purchase program when the
Federal Reserve Chairman Ben Bernanke walks up to deliver his speech at the central bank's annual
conference in Jackson Hole, Wyoming. The economy has been faltering for a prolonged period now, with
no encouraging economic reports and uncertainty about the financial situation weighing heavily on the
markets. Global conditions have combined with domestic recessionary fears to severely dampen investor
sentiment. Investors are hopeful that the bond-buying plan will give a boost to the financial markets. It
was August last year when Bernanke had actually laid the foundation for the $600 billion bond-buying
plan known as the QE2. The second round of stimulus had provided sufficient stimulus to the markets
until its scheduled end.
Earlier this year, unrest in the oil-rich Persian Gulf nations had dented the markets for a considerable
period. Much of the damage was brought about by the ensuing violence in Libya, a country which
accounted for almost 2% of the global oil output. The agitation against estranged Libyan leader Muammar
Gaddafi ultimately resulted in a positive outcome for the rebels as the protestors took over the majority of
Tripoli and media reports stated that Gaddafi has disappeared while his two sons have been captured.
This led to a drop in Brent crude as it was expected that Libya would now resume oil exports. On the New
York Mercantile Exchange, crude for September delivery jumped 2.3% and settled at $84.12 per barrel.
Among the stocks in the energy sector, Exxon Mobil Corporation (NYSE:XOM), Marathon Oil Corporation
(NYSE:MRO), Royal Dutch Shell plc (NYSE:RDS-A) and Sunoco, Inc. (NYSE:SUN) gained 0.5%, 0.5%,
2.2% and 0.9%, respectively. Among the decliners were Western Refining Inc. (NYSE:WNR),
ConocoPhillips (NYSE:COP), Murphy Oil Corporation (NYSE:MUR) and Transocean Ltd. (NYSE:RIG)
and they were down 4.1%, 0.4%, 1.7% and 2.0%, respectively.
The banking sector was one of the biggest laggards and bellwethers suffered significant losses. Apart
from Bank of America, as mentioned earlier, financial stocks like JPMorgan Chase & Co. (NYSE:JPM),
Wells Fargo & Company (NYSE:WFC), Citigroup, Inc. (NYSE:C) and The Goldman Sachs Group, Inc.
(NYSE:GS) dropped 2.7%, 2.0%, 2.7% and 4.7%, respectively.
Only one economic report was released on Monday which showed that the Chicago Fed National Activity
Index for July has moved up to -0.06. However, the index is still in the negative zone and this was also
the fourth consecutive month that the index has stayed negative.
Company News Summary
Company News for August 23, 2011
by Zacks Equity Research on August 23, 2011
• According to a report in the New York Post, discount chain retailer 99-Cents Only Stores (NYSE:NDN) could be
purchased by private equity firm Apollo Global Management (NASDAQ:APO). Following this development, shares of
99-Cents gained 8.56%
• Board members of online content provider Demand Media Inc (NYSE:DMD) has approved a stock repurchase
program worth as much as $25 million
• Share prices of The PMI Group, Inc. (NYSE:PMI) plunged 31.83% after two of the mortgage insurer's units were
placed under regulatory supervision by the Arizona Department of Insurance
• Shares of online travel marketer Travelzoo Inc. (NASDAQ:TZOO) gained 4.98% to close at $34.17 after the
company announced its decision to buy back 500,000 of its own shares
23
S.S. Corporation (Pvt) Ltd.
Textile Plaza M.A Jinnah Road
Karachi, Pakistan August -23 2011
Phone: +92-21-32430867-32420509
• Shares of aviation-company Boeing Co. (NYSE:BA) advanced 1.46% to $58.38 after the airplane maker clinched
a $1.64 billion helicopter contract. According to media reports, Delta Air Lines, Inc. (NYSE:DAL) is planning to buy
100 Boeing 737 jets from the airplane maker
• Analysts at Piper Jaffray (NYSE:PJC) downgraded New York & Company, Inc. (NYSE:NWY) to "Neutral" rating
from "Overweight" rating
• Shares of SS&C Technologies Holdings, Inc. (NASDAQ:SSNC) were downgraded by William Blair to "Market
Perform" from "Outperform" rating
• Analysts at Stifel Nicolaus upgraded shares of Investors Bancorp (NASDAQ:ISBC) from "Hold" rating to "Buy"
rating with a target price of $16.50
• Shares of ManTech (NASDAQ:MANT) were upgraded by analysts at Standpoint Research to "Buy" rating. The
analysts also raised the target price of the stock to $42.00
• Shares of Murphy Oil Corporation (NYSE:MUR) were upgraded by analysts at Howard Weil to "Outperform rating"
from "Market Perform" rating with a target price of $74.00 on the stock
Sector Data Rank as of 18-03-2011
"This
"Week ago "FY10 "FY10 "FY11
Week's "FY10 Estimates
Sector Zacks Rank Revisions Estimates Revisions
Zacks Rank Revised Down "
" Ratio " Revised Up " Ratio "
"
Auto-Tires-Trucks 2.59 2.73 2.12 70 33 2.52
Transportation 2.72 2.72 2.05 352 172 1.94
Computer and
2.86 2.89 1.99 843 424 1.81
Technology
Basic Materials 2.9 2.93 0.95 196 207 1.15
Aerospace 2.9 2.95 0.79 38 48 0.76
Industrial
2.94 2.94 2.09 232 111 1.86
Products
Consumer
2.98 2.98 1.63 312 191 1.25
Discretionary
Business Services 3.01 3 0.89 134 150 0.79
Utilities 3.02 3.07 1.48 155 105 0.92
Consumer Staples 3.03 3.06 1.65 167 101 1.76
24
S.S. Corporation (Pvt) Ltd.
Textile Plaza M.A Jinnah Road
Karachi, Pakistan August -23 2011
Phone: +92-21-32430867-32420509
Medical 3.04 3.03 0.91 404 442 0.73
Retail-Wholesale 3.06 3 0.89 292 327 0.77
Construction 3.07 3.01 0.54 63 116 0.41
Oils-Energy 3.09 3.08 0.7 482 690 0.71
Finance 3.11 3.07 0.8 932 1159 0.56
Conglomerates 3.13 3.04 3.93 55 14 1.27
25