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S.S. Corporation (Pvt) Ltd.

DHA Phase VI

Karachi, Pakistan

Phone: +92
-
21
-
5240131
-
40

December
-
13
-

2010

1

Market Snapshot



Monday December 13, 2010 (04:30 PM EST)

S&P Market Commentary

... Stocks closed mixed as investors awaited the outcome of a Senate vote on proposed U.S. tax legislation
and the final Federal Reserve policy meeting of 2010. The tax vote wa
s taking place as of the close of trading;
the Fed meeting starts Tuesday. Tech and consumer services stocks lagged the broader market. NYSE
breadth was 16
-
14 negative, NASDAQ breadth was 15
-
11 was negative. The WSJ reported that the
Obama/GOP tax deal wou
ld likely win grudging passage in Congress. Treasuries rose. The dollar fell. China
raised bank reserve requirements but left rates unchanged. Gold, oil rose.

The Outlook's Market Insight


Update on 10
-
12
-

2010



S&P Stock Picks and Pans


Monday Decemb
er 13, 2010 (04:00 PM EST)

MGM RESORTS INTERNATIONAL, UNITEDHEALTH GROUP, GENL ELECTRIC, WEBMD HEALTH
CORP(NEW)

S&P LIFTS FUNDAMENTAL OUTLOOK ON CASINOS&GAMING TO NEUTRAL FROM
NEGATIVE(
MGM
44.90 *** ) : Although we still see challenges to the industry based on a difficult consumer
spending environment, we think industry performance in 2011 will be lifted by continued improvement in
Las
Vegas, which accounted for over 20% of commercial casino gross gaming revenue year to date through
October. We see Vegas Strip room rates improving on a more benign room supply outlook and a modest
improvement in visitation. We believe Vegas Strip offe
rs compelling values for corporate and leisure
segments. However, we still see challenges to regional markets and Atlantic City.


S&P REITERATES POSITIVE FUNDAMENTAL OPINION ON MANAGED CARE SUB
-
INDUSTRY(
UNH
37.00 **** ) : A Virginia federal district judge rules that a key provision of the health reform
law, that Americans obtain health insurance or pay a fine, is unconstitutional. S
till, we note he did not block
the law's implementation, and other federal judges upheld the law. Other lawsuits are pending, including one
filed by 20 states in Florida. We see the lawsuits ultimately decided by the Supreme Court. We believe the
law will
ultimately be declared constitutional, but if the individual mandate is not, other provisions of the law
will be able to move forward, including Medicaid expansion.


RETRANSMIT
-

S&P REITERATES BUY OPINION ON SHARES OF GENERAL ELECTRIC(
GE
17.70 **** ) :
GE offers $1.3B for the outstanding shares of Wellstream Holdings, subject to shareholder approval.
Wellstream makes flexible pipe

used in subsea oil and gas production. We view this acquisition as extending
GE's existing subsea oil&gas production business, and importantly, establishing a larger customer base in
Brazil, where very large subsea oil fields have been discovered. GE also

plans to open a $100M global
research center in Rio de Janeiro in '12. We expect GE to continue to aid growth through investment in high
-
technology energy, industrial, and healthcare equipment.


S&P UPGRADES SHARES OF WEBMD HEALTH TO BUY FROM HOLD(
WBMD
50.18 **** ) : WBMD shares
have fallen about 5% over the last month, and we now see the stock as attractively valued. We think W
BMD's
franchises, organic growth, improving profitability, and expanding geographic footprint have appeal. We also
note the stock trades at a '11 P/E
-
to
-
growth on par with other Internet stocks within our coverage, reflecting
notable growth and offsetting
a premium P/E of 42X. We also think WBMD has done a good job over the last


S.S. Corporation (Pvt) Ltd.

DHA Phase VI

Karachi, Pakistan

Phone: +92
-
21
-
5240131
-
40

December
-
13
-

2010

2

year or so at merging with HLTH Corp. and cleaning up its balance sheet to better position the company. We
keep our $62 target price.

Industry in Focus


Update on 08
-
12
-
2010



S&P

Focus Stock of the Week



Monday December 13, 2010 (10:00 AM EST)

XEROX CORP. (XRX )

XEROX CORP. : (
XRX
)


INVESTMENT THESIS Thi
s week's Focus Stock of the Week is Xerox Corporation (XRX: $12), which carries
Standard&Poor's highest investment recommendation of 5
-
STARS, or Strong Buy. We believe the company
is a major player in both the global document management and business proces
s outsourcing (BPO)
industries, and has the potential to gain market share based on new products, small acquisitions, and
synergies following Xerox's February 2010 acquisition of Affiliated Computer Services (ACS).


We foresee revenue growth of 43% for 201
0, reflecting the acquisition of ACS operations that produced about
$6.6 billion in revenue in 2009 (compared to XRX revenues of $15.2 billion for 2009) plus a cyclical rebound
year for the printer industry and information technology generally. For 2011, w
e project revenue gains near
8% based on improving global economies and cross
-
selling synergies from the combined selling teams of
XRX and ACS, plus the presence of ACS for the full year rather than just 11 months. The overlap of the
customer lists at the
time of the merger was only about 20%, so we believe there is ample opportunity for
cross
-
selling on the enlarged customer list. Also, we see a chance for a sales boost based on territorial
expansion, given that, historically, about 90% of ACS's sales were

from the U.S. Giving the ACS sales team
access to XRX's European distribution system should create opportunities to open new BPO accounts, by our
analysis.


We expect margins to improve in 2011 and 2012 based on acquisition synergies and higher volumes. A
lso,
restructuring and cost saving programs put in place to help XRX through the economic slowdown of the past
few years have created a relatively lean operating model, in our view. Our operating EPS estimates, which
exclude acquisition
-
related and restruc
turing charges, are for improvement from $0.60 achieved in 2009, to
$0.93 for 2010, with further gains to $1.15 in 2011, and $1.40 in 2012.


Part of our thesis is that an improvement in earnings visibility, created by a substantial increase in the portion
of revenue derived from services, which are typically tied to long
-
term contracts, should encourage a higher
valuation level for XRX shares. We set our 12
-
month target price of $16 by applying a target P/E of 14X to our
$1.15 operating EPS estimate for 201
1. This target multiple is in line with a recent average P/E of 13.8X for
Information Technology Sector companies in the S&P 500 Index, and is below the average annual low P/E of
about 14.6X for XRX shares over the 2003
-
2009 period. The average mid
-
point P
/E for XRX shares over that
historical seven
-
year period was 21.0X.


All in all, we expect revenue and earnings growth above industry averages in 2011 based largely on
acquisition synergies. We also see potential for multiple expansion based on better earn
ings visibility. XRX's
valuation appears compelling to us based on our P/E analysis.


BUSINESS PROFILE Xerox is a well
-
known incumbent in the worldwide document management markets.
Based in Norwalk, Connecticut, it has a corporate history going back to 190
6. The company operates in about
160 countries. It had about 54,000 employees worldwide at the end of 2009, before the merger with ACS in


S.S. Corporation (Pvt) Ltd.

DHA Phase VI

Karachi, Pakistan

Phone: +92
-
21
-
5240131
-
40

December
-
13
-

2010

3

February 2010, and presently has about 133,000 employees. Offerings include a complete line of document
equipment and
related services, plus the business process outsourcing services from the acquired ACS
operations.


Equipment lines include printing and publishing systems; digital copiers; laser and solid ink printers; fax
machines; and digital multifunction devices that

can print, copy, scan and fax. Related service markets
include traditional printer support and supplies, and customer financing. Increasingly, the company has been
aiming at newer types of services such as managed print services, whereby it helps customer
s better control
document printing, sharing and storage across the enterprise, including the office, mobile and home workers,
and the print center.


For 2009, about 23% of revenue came from equipment sales, with the remainder from post
-
sale work such as
ma
intenance, services, supplies and financing. This was down from 27% of sales from equipment in 2008,
which we attribute mainly to a more severe slowdown for equipment sales than for services and supplies in
the economic downturn. Even though equipment sale
s are a minority of total revenue, they add volatility to
overall sales, which depresses the valuation level, in our opinion. Presumably, dampening this sales volatility
was one factor in the company's consideration of an acquisition of a large services co
mpany such as ACS.
During the third quarter of 2010, the portion of total sales coming from equipment fell to 17%, from 22% for
the year
-
earlier period, mainly reflecting the inclusion of ACS service operations in 2010. With more non
-
equipment sales in the

mix, we expect less volatility in sales going forward.


Business process outsourcing services include handling operations with a lot of documented transactions,
such as claims reimbursement, electronic toll transactions, customer call centers, and human r
esources
benefits management. In July 2010, the company acquired ExcellerateHRO, LLP, a global benefits
administration and relocation services provider from Hewlett
-
Packard (HPQ 43 Strong Buy). The
ExcellerateHRO deal was Xerox's first acquisition since th
e ACS acquisition, and added about 1,800 human
resource specialists. On November 1, 2010, XRX acquired Spur Information Solutions, a provider of computer
software used for parking enforcement in the United Kingdom. The Spur deal gives the ACS operations
ad
ditional technology to take on parking enforcement business in cities of all sizes globally. We expect a
series of similar small
-
scale acquisitions to continue over the next few years as a way of extending XRX's
capabilities and the customer base for vario
us BPO markets.


Before the transformative merger with ACS in February 2010, the company viewed its addressable market at
$132 billion. It faced traditional enterprise printer and copier competitors such as Hewlett
-
Packard, Canon
(CAJ 49 Hold), Ricoh and o
thers. We view the printer industry as growing roughly in line with to slightly slower
than the overall economy, reflecting long
-
term trends such as increased use of digitized documents rather
than printed documents. With ACS operations, the company believ
es its addressable market is much larger,
at about $500 billion.


New competition would include potential customers' in
-
house operations, and other BPO outsourcers such as
Accenture (ACN 46 Hold), IBM (IBM 145 Buy) and Genpact Ltd. (G 15 Hold). Furthermore
, we view the BPO
industry as growing a little faster than the overall economy, reflecting a long
-
term trend toward outsourcing.


COMPANY OUTLOOK AND STRATEGY In Xerox's traditional printer business, we believe the keys to
growing faster than the industry
include offering new digital and color products as the appeal of black and
white copying fades, encouraging more intense usage of installed machines to drive supply sales, targeting
mid
-
sized businesses in addition to the usual large enterprise customers,
territorial expansion, deeper
penetration of existing customer accounts, and offering document management services. The company
spends about $800 million a year on R&D, and shares technology with its affiliate Fuji Xerox in pursuit of new
products, such as

the ColorCube 9000 series and the Xerox Color 800 and 1000 series. Clever product
features include tagged pages for document control, solid ink blocks for easy replacement, and high
-
speed
printing. Product differentiation is a help in the competitive prin
ter industry.


Given the challenges of growing revenue as a large incumbent in a mature and slow
-
growth printer industry,
the company chose to accelerate its operations in faster
-
growing markets in Information Technology services
with the acquisition of Af
filiated Computer Services, completed on February 5, 2010 in a cash
-
and
-
stock


S.S. Corporation (Pvt) Ltd.

DHA Phase VI

Karachi, Pakistan

Phone: +92
-
21
-
5240131
-
40

December
-
13
-

2010

4

transaction valued at approximately $6.5 billion. As mentioned above, the deal created some immediate
advantages, including a broader client list; a larger distribution system fo
r the ACS operations, which should
jump
-
start its European sales; a technology R&D boost for the ACS operations; greater potential service sales
to existing XRX accounts; and cost savings from overhead cost reductions.


Now almost a year after the merger,
we believe things are progressing nicely. On October 21, the company
reported third
-
quarter total service signings of $3.0 billion, up 26% from the same period in 2009, and a 17%
increase in new business signings. XRX reported signing more than 30 synergy
deals since the acquisition
and sees a synergy pipeline of $3.5 billion, which we take to mean business that neither company would have
developed without collaboration. If XRX can deliver $3.5 billion in new business, it would be equivalent to
about 16% of

the pro
-
forma annual revenues for 2009 indicated by adding XRX's and ACS's independently
generated revenues for 2009 of $21.8 billion ($6.6 billion for ACS plus $15.2 billion for XRX). Of course, new
BPO business is contract work that will be earned over
several years, so the impact of synergy revenues will
likely be spread out over time.


All in all, we project revenues of $21.7 billion for XRX in 2010, with about 8% growth to $23.4 billion in 2011,
and 4% growth in 2012 to $24.4 billion. We forecast that

gross margins will widen from about 34.8% in 2010,
to 35.9% in 2011, and to 36.7% in 2012. We expect improvement on the R&D and SG&A lines, a relatively
stable tax burden, and modest reductions in share count by 2012. Excluding acquisition and restructuri
ng
costs, we estimate EPS of $0.93 for 2010, $1.15 for 2011, and $1.40 for 2012. The company guided for 2011
operating EPS of $1.05 to $1.10, and we believe the difference reflects our slightly more optimistic outlook on
revenue potential.


Two near
-
term n
egatives from the ACS deal that we think will fade in coming quarters are a wave of
acquisition and restructuring charges and an increase in debt. Company earnings guidance implies about
$0.47 of such charges in 2010. As for debt, Xerox has already paid do
wn $1.9 billion of debt since the ACS
acquisition and aims to reduce debt further. Total short
-
term and long
-
term debt at the end of the 2010 third
quarter stood at $9.5 billion, which is not very different from the $9.3 billion at year
-
end 2009. Bear in m
ind
that the company finances some customer purchases, and of the $9.5 billion in debt at the end of October
2010, some $6.2 billion related to the financing business and supported finance receivables of $7.1 billion.


VALUATION XRX shares are trading at a
bout 10.4X our 2011 operating EPS estimate of $1.15. We believe
this large a discount to a recent average P/E multiple of 13.8X for Information Technology Sector companies
in the S&P 500 Index is unwarranted. In our opinion, while the pre
-
ACS Xerox might h
ave been properly
viewed as meriting a discount due to its exposure to slow
-
growth and cyclical office equipment markets, we
believe that the addition of relatively steady services operations in the ACS deal and an ongoing string of
smaller acquisitions su
bstantially dilutes that argument. The company is aiming at a services industry with
better growth and margin potential than the printer industry, by our analysis, and it is conceivable to us that
XRX may eventually devise some end
-
to
-
end document manageme
nt and business process services
offerings that are sufficiently differentiated to permit premium pricing.


Valuing the company in line with large
-
cap IT peers at 14X our 2011 estimate of $1.15 leads to our 12
-
month
target price of $16.


We believe that 14
X is a reasonable target multiple from some additional reference points. Based on the
2003
-
2009 period, XRX shares hit an average annual low P/E of 14.6X. The average annual high was 27.4X
and the average mid
-
point was 21.0X. We will concede that XRX trade
d at a P/E as low as 7X during 2009,
but that was a year with depressed industry conditions and we believe it is an achievement for the company
to have delivered positive EPS each year since 2002.


For a reference point on a large
-
cap peer with exposure to

printing markets, Canon shares are trading near
16.3X our $3.00 operating EPS estimate for 2011. Checking a mid
-
cap peer in the BPO industry, Genpact is
trading at about 20X our 2011 EPS estimate of $0.75.


CORPORATE GOVERNANCE We view positively that all

members of the board's Finance Committee and
the Corporate Governance Committee, which recommends nominees for director elections, are independent


S.S. Corporation (Pvt) Ltd.

DHA Phase VI

Karachi, Pakistan

Phone: +92
-
21
-
5240131
-
40

December
-
13
-

2010

5

directors. Indeed, all but one of the nine nominees in the annual elections to the board described in the
co
mpany's spring 2010 proxy was independent. On December 8, 2010, Xerox announced the election of
Robert Keegan, a former chairman and CEO of The Goodyear Tire and Rubber Company (GT 11 Hold) as a
director, and we view the ability of the board to attract dir
ectors with such deep managerial experience as a
positive factor.


We see the holding of both the board chairmanship and the CEO position by the same individual as a
negative factor for corporate governance, but note that this is a common practice and that

the current CEO,
Ursula Burns, has over 30 years' of service with the company.


INVESTMENT RISKS Risks to our recommendation and target price include acquisition integration, failure to
realize cross
-
selling synergies with acquired ACS operations at the p
ace we estimate, aggressive pricing
competition in printer and office electronics markets, and failure of new products to gain customer acceptance
in line with our projections. Cost efficiency gains from acquisitions and restructurings could prove less tha
n we
forecast. Investor sentiment might not be as encouraged by the company's new service
-
heavy profile as we
project, and valuation levels might not trend higher. Debt rose with the ACS acquisition and the company
engages in customer financing, which crea
tes some exposure to potentially higher interest expense if interest
rates should rise.


CONCLUSION Summing it up, we see potential for revenue to grow in 2011 based on several factors: printer
industry cyclical rebound; steady growth in the BPO services i
ndustry; new sale accounts; and deeper
penetration of existing accounts as a result of synergies from the ACS acquisition. We anticipate opportunities
for margin improvement on higher volumes, the fruits of earlier restructurings, and better efficiencies o
n
overhead costs following the ACS acquisition. In addition, we think that having a higher percentage of sales
from services should lead to better earnings visibility and ultimately to higher valuation levels. The present
valuation near 10.4X our $1.15 ope
rating EPS estimate is compelling, in our view, given that large
-
cap IT
peers trade closer to 14X. Our recommendation is Strong Buy.


S&P's views on stocks are constantly re
-
evaluated. Please refer to our most recent publication on this stock
to see our cu
rrent view.


Thomas W. Smith, CFA

STARS Changes






Date

Symbol

Company Name

New

Ranking

Old

Ranking

Reason

12/13/10

AEIS

Advanced

Energy



Valuation


12/13/10

GAP

Great

Atl

&

Pac




No longer followed analytically


12/13/10

HBAN

Huntington

Banc



Valuation


12/13/10

IDA

Idacorp

Inc



Valuation


12/13/10

INFA

Informatica

Cor



Valuation





S.S. Corporation (Pvt) Ltd.

DHA Phase VI

Karachi, Pakistan

Phone: +92
-
21
-
5240131
-
40

December
-
13
-

2010

6

12/13/10

PAYX

Paychex

Inc



Valuation


12/13/10

TSL

Trina

Solar

ADS



Valuation


12/13/10

WBMD

WebMD

Health

Co



Valuation


12/10/10

AMG

Affiliated

Mana



Valuation


12/10/10

VRSN

VeriSign

Inc



Potential for fu
rther special actions


12/10/10

WOR

Worthington

Ind



Valuation


12/09/10

BKI

Buckeye

Technol



Valuation


12/09/10

CAG

ConAgra

Foods



Lower EPS estimates


12/09/10

DPL

DPL

Inc



Valuation


12/09/10

MTB

M&T

Bank



Valuation


12/09/10

TCB

TCF

Financial



Valuation


12/08/10

CASY

Casey's

Genl

St



Stronger than expected demand


12/
08/10

HRB

H

&

R

Block



Improving margin trends


12/08/10

JRCC

James

River

Coa



Valuation


12/08/10

JOYG

Joy

Global




Added to Stars


12/08/10

MOVE

Move

Inc



Valuation


12/08/10

UTSI

UTStarcom

Inc



Valuation


12/07/10

AGL

AGL

Resources



Valuation, acquiring Nicor Inc (GAS)


12/07/10

ITW

Illinois

Tool

W



Valuation


12/07/10

PBY

Pep

Boys
-
Manny,



Valuation




S.S. Corporation (Pvt) Ltd.

DHA Phase VI

Karachi, Pakistan

Phone: +92
-
21
-
5240131
-
40

December
-
13
-

2010

7

12/07/10

SLG

SL

Green

Realty



Improving

leasing fundamentals


12/06/10

ANR

Alpha

Natural

R



Valuation


12/06/10

CNX

CONSOL

Energy



Valuation


12/06/10

VRGY

Verigy

Ltd



Multiple Expansn likely frm M&A potntl




Economic Calendar




Update on 10
-
12
-

2010


Economic Brief


Update on
9
-
12
-

2010


Word On The Street




Monday December 13, 2010 (04:00 PM EST)

CASELLA WASTE SYSTEMS INC., THERMO FISHER SCIENTIFIC, INC., CYTOKINETICS INC.

WEDBUSH UPGRADES CASELLA WASTE (CWST) TO OUTPERFORM FROM NEUTRAL(
CWST
) :
Analyst Al Kaschalk tells salesforce upgrades for several reasons. Says industry checks and discussions
with management have been

encouraging, suggesting CWST could announce sizeable, targeted asset
divestitures in early 2011. Thinks divestiture of non
-
core assets should lead to higher EBITDA margin, given
route optimization, and improved free cash flow. Notes increasingly favorable

competitive dynamics across
co.'s disposal assets are likely to drive increased pricing power and margins on higher internalization rates.
Raises $5.50 price target to $9.50. M.Morrow


THERMO FISHER (TMO) TO BUY DIONEX (DNEX). LAZARD CAPITAL UPS TMO TO BU
Y(
TMO
) : Analyst
Stephen Unger tells salesforce TMO's acquisition of DNEX is a strong strategic fit, as it clearly strengthens
TMO's inst
rumentation product offering, broadens overall geographic diversity. Notes TMO is a seasoned
integrator, DNEX will be a plug
-
and
-
play, enabling the deal to be immediately accretive (he estimates a close
by 3/31/11). Says valuation for DNEX is rich, but rev
., cost synergies should allow TMO to deliver 15%
-
plus
pro
-
forma EPS growth over next 2 years. Ups his $3.93 '11 EPS est. to $4.10 on net sales of $11.9B. Sets
$71 12
-
month target. B.Egli




S.S. Corporation (Pvt) Ltd.

DHA Phase VI

Karachi, Pakistan

Phone: +92
-
21
-
5240131
-
40

December
-
13
-

2010

8


CYTOKINETICS (CYTK) COMPLETES ALS DRUG TRIAL. NEEDHAM KEEPS HOLD(
CYTK
) : Analyst Mark
Monane says CYTK and key trial investigators reviewed the Phase 2a data of CK
-
357 in 67 amyotrophic
lateral sclerosis (
ALS, also known as Lou Gehrig's disease), patients. Notes with regards to efficacy, the data
were encouraging. Says while he agrees with mgmt's prudent, stepwise approach to drug development, he
maintains his hold rating as he awaits further sentinel event
s over the next 6
-
12 months to drive CYTK stock
valuation higher. Says a partnership for the CK
-
357 program may provide an upside to his valuation thesis.
B.Brodie


Market Movers

Monday December 13, 2010 (04:00 PM EST)

Movers: DIONEX CORP.,CYTOKINETICS INC.,MOLYCORP, INC.

DIONEX CORP.(
DNEX
) : DNEX agrees to be acquired by THERMO FISHER SCIENTIFIC in deal valued at
about $2.1 billion. Terms: DNEX holders to get $118.50 per share in cash.


CYTOKINETICS INC.(
CYTK
) : CYTK announces successful completion of its Phase IIa "Evidence of Effect"
(EoE) clinical trial of CK
-
2017357 in patients with amyotrophic lat
eral sclerosis (ALS), also known as Lou
Gehrig's disease. Needham maintains hold as it awaits further sentinel events over the next 6
-
12 months to
drive CYTK stock valuation higher.See


MOLYCORP, INC.(
MCP
) : MCP announces it has secured the last of several environmental permits
necessary to begin construction of its new rare earth mfg facility at Mountain Pass, California.


MAGIC SOFTWARE E
NTERPRISES LTD.(
MGIC
) : MGIC agrees to acquire its South African distributor,
Magix Integration Ltd. MGIC will now control 51% of Magix
Integration with an option to increase its holdings
to 75%; for a total investment of up to $2.5 million to be paid over the next year.


JDS UNIPHASE CORPORATION(
JDSU
) : Piper Jaffray upgrades JDSU to overweight from neutral. Co. does
not comment on stock activity.See


THERMO FISHER SCIENTIFIC, INC.(
TMO
) : TMO agrees to acquire DIONEX CORP. for $118.50 per share,
or about $2.1 billion. Lazard Capital upgrades TMO to buy from hold.See


CASELLA WASTE SYSTEMS INC.(
CWST
) : Wedbush upgrades CWST to outperform from neutral.


CLOUD PEAK ENERGY INC.(
CLD
) : CLD announced today that it has filed an amendment to its Registration
Statement on Form S
-
1 that provides for an underwritten secondary public offering of 25.6m CLD shares.
Says shares would be sold by Rio Tinto Energy America Inc. and its affili
ate. Says it contemplated that, in
connection with the offering, the selling shareholders would grant to the underwriters an option to purchase up
to an additional 3.8M CLD shares to cover over
-
allotments, if any.


COST PLUS INC.(
CPWM
) : CPWM confirms it is conducting a merchandising test with BED BATH&BEYOND
involving its consumables products in three BBBY stores. Raymond James raises pri
ce target on CPWM to
$13 from $10, rates strong buy.See


SPRINT NEXTEL CORP.(
S
) : Credit Suisse raises its target price for S to $8 from $6
, reiterates outperform. S


S.S. Corporation (Pvt) Ltd.

DHA Phase VI

Karachi, Pakistan

Phone: +92
-
21
-
5240131
-
40

December
-
13
-

2010

9

unavailable.See


WESTERN REFINING INC.(
WNR
) : RBC Capital downgrades WNR to underperform from sector perform.
Co. unavailable.See


HUNTINGTON BANCSHARES INC.(
HBAN
) : HBAN begins underwritten public offering of $920M of HBAN
shares. Also announces

anticipated future offer of about $300M in original principal amount of subord. debt in
a registered public offering. Intends to use the proceeds of the offerings, together with other available funds,
to repurchase all $1.4B of the Preferred Stock that it

issued to the U.S. Dept of Treasury under its Troubled
Asset Relief Program's (TARP) Capital Purchase Program. S&P downgrades to hold.See


AMERICAN SUPERCONDUCTOR CORPORATION(
AMSC
) : Shares of AMSC appear overvalued because
too much of its business relies on one Chinese customer: Barron's.


AO SMITH CORP.(
AOS
) : AOS agrees to sell its Electric Products Company to REGAL BELOIT CORP. for
about $875 million, comprised of $700M in cash and about 2.83 million shares of RBC stock. S&P reiterates
strong buy.See


THE GREAT ATLANTI
C&PACIFIC TEA COMPANY, INC.(
GAP
) : In response to GAP's announcement that it
has filed a voluntary petition under Chapter 11, NYSE Regula
tion, Inc. says it has determined GAP stock
should be suspended immediately. The Chapter 11 process will facilitate A&P's financial and operational
restructuring, which is designed to restore the company to long
-
term financial health.


FOREST OIL CORP.(
FST
) : FST announces that Lone Pine Resources Inc, a unit of FST, has filed a
registration statement on Form S
-
1 with SEC related to the pro
posed initial public offering of shares of
common stock of Lone Pine. Lone Pine will be the new parent of Canadian Forest Oil Ltd., which owns all of
Forest's Canadian assets.


MAGELLAN HEALTH SERVICES INC.(
MGLN
) : MGLN sees '11 revenue of $2.8B
-
$2.9B, EPS of $2.84
-
$3.33. Street was at $3.55. Confirms '10 guidance for EPS of $3.66
-
$4.07.


Fund Strategies


Update on
09
-
12
-

2010


Neural F
air Value 25 Additions

Update on 09
-
12
-

2010


Neural Fair Value 25 Deletions

Update on 09
-
12
-

2010




S.S. Corporation (Pvt) Ltd.

DHA Phase VI

Karachi, Pakistan

Phone: +92
-
21
-
5240131
-
40

December
-
13
-

2010

10


High Yield Stocks


High Yielding 3/4/5 Star Stocks

(as of 12/06/2010 close)

Company Name

Symbol

Yield%

HOSPITALITY

PROPERTIES

TRUST

HPT

7.9

CENTURYLINK,

INC.

CTL

6.6

PITNEY

BOWES

INC.

PBI

6.4

ALTRIA

GROUP,

INC.

MO

6.3

BANCORPSOUTH,

INC.

BXS

6.3

FIRS
TENERGY

CORP.

FE

6.2

HEALTH

CARE

REIT,

INC.

HCN

6.0

REYNOLDS

AMERICAN

INC.

RAI

6.0

AT&T

INC.

T

5.9

ENTERPRISE

PRODUCTS

PARTNERS

L.P.

EPD

5.6

NATIONAL

RETAIL

PROPERTIES,

INC.

NNN

5.6

HCP,

INC.

HCP

5.5

NATIONWIDE

HEALTH

PROPERTIES,

INC.

NHP

5.3

PPL

CORP.

PPL

5.3

CINCINNATI

FINANCIAL

CORP.

CINF

5.2

EXELON

CORP.

EXC

5.2

WINTHROP

REALTY

TRUST

FUR

5.1

BRISTOL
-
MYERS

SQUIBB

CO
.

BMY

4.9

DTE

ENERGY

CO.

DTE

4.9



S.S. Corporation (Pvt) Ltd.

DHA Phase VI

Karachi, Pakistan

Phone: +92
-
21
-
5240131
-
40

December
-
13
-

2010

11

HUDSON

CITY

BANCORP,

INC.

HCBK

4.9

SOVRAN

SELF

STORAGE,

INC.

SSS

4.9

CONSOLIDATED

EDISON,

INC.

ED

4.8

DPL

INC.

DPL

4.7

SOUTHERN

CO.

(THE)

SO

4.7

ENTERGY

CORP.

ETR

4.6

REGENCY

CENTERS

CORP.

REG

4.4

DOMINION

RESOURCES,

INC.

(VA.)

D

4.3

LOC
KHEED

MARTIN

CORP.

LMT

4.3

MERCK

&

CO.,

INC.

MRK

4.3

PUBLIC

SERVICE

ENTERPRISE

GROUP

INC.

PEG

4.3


S&P Platinum Portfolio





Return Year To Date through
11/30/2010


Platinum Portfolio

S&P 500

+10.45

+5.87



See Below For Historical Performance


Company Name

Ticker

12/13/2010

FairVal

Price

FVal

Star Rank
ing

Aeropostale

Inc

ARO

29.40

23.10

5



Arrow

Electronics

ARW

45.10

33.70

5



Aspen

Insurance

Hldg

AHL

43.80

29.10

5





S.S. Corporation (Pvt) Ltd.

DHA Phase VI

Karachi, Pakistan

Phone: +92
-
21
-
5240131
-
40

December
-
13
-

2010

12


Avnet,

Inc.

AVT

41.7
0

33.10

5



Brocade

Communic

Sys

BRCD

7.20

5.30

5



CVS

Corp.

CVS

42.50

32.40

5



Chevron

Corp.

CVX

92.40

84.90

4



Chico's

FAS

C
HS

12.20

12.50

3



Cisco

Systems

CSCO

23.80

19.10

5



Coach

Inc

COH

52.80

56.60

3



Computer

Sciences

CSC

57.90

47.10

5



EMC

Corp.

EMC

22.80

22.10

4



Express

Scripts

ESRX

57.40

54.20

4



ExxonMobil

XOM

70.80

71.20

4



Fifth

Third

Bancorp

FITB

13.60

13.30

4



Fiserv

FISV

66.50

58.20

5



GameStop

Corp'A'

GME

30.90

21.30

5



General

Mills

GIS

31.20

35.60

2



Gilead

Sciences

GILD

44.00

37.30

5



ITT

Industries

ITT

53.60

48.90

5



International

Business

IBM

174.00

145.40

5



JPMorgan

Chas
e

&

Co

JPM

46.00

39.60

5



Jacobs

Engineering

Grou

JEC

46.10

41.30

5




S.S. Corporation (Pvt) Ltd.

DHA Phase VI

Karachi, Pakistan

Phone: +92
-
21
-
5240131
-
40

December
-
13
-

2010

13


Johnson

Controls

JCI

33.30

39.20

2



MEMC

Electronic

Materia

WFR

18.60

11.90

5



Medtronic,

Inc.

MDT

51.10

34.20

5



MetroPCS

Communic

PCS

14.40

12.40

5



NICE
-
systems

ADS

NICE

34.40

31.00

5



New

York

Community

Banc

NYB

16.40

17.30

3



Noble

Corp.

NE

43.40

33.60

5



Oracle

Corp.

ORCL

36.80

28.80

5



Rio

Tinto

plc

ADS

RIO

72.60

70.10

4



Sanmina
-
SCI

Corp.

SANM

12
.70

11.20

5



State

Street

Corp.

STT

51.20

45.70

5



Transocean

R
IG

82.10

70.50

5



Travelers

Cos

TRV

59.70

54.90

4



Tyson

Foods

T
SN

19.90

16.90

5



Under

Armour'A'

UA

48.20

59.00

2



Wal
-
Mart

Stores

WMT

60.10

54.60

5



Western

Digital

WDC

38.30

34.70

5



Willis

Group

Holdings

WSH

36.30

32.80

5



Worthington

Industries

WOR

18.90

17.30

5




Platinum Portfolio Performance



S.S. Corporation (Pvt) Ltd.

DHA Phase VI

Karachi, Pakistan

Phone: +92
-
21
-
5240131
-
40

December
-
13
-

2010

14


Year

Platinum(%)

S&P 500(%)

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


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





Analyst Blog



Buckeye

Buys

Assets

in

Puerto

Rico


Posted Mon Dec 13, 05:55 pm ET

Houston
-
based
Buckeye Partners L.P.

(
BPL
) has acquired a refined petroleum products terminal in Puerto
Rico from an associate of
Royal Dutch Shell plc

(
RDS.A
). Royal Dutch Shell has agreed, under a multi
-
y
ear
contract, to remain a key customer at the terminal.



S.S. Corporation (Pvt) Ltd.

DHA Phase VI

Karachi, Pakistan

Phone: +92
-
21
-
5240131
-
40

December
-
13
-

2010

15

Located on the southeast coast of Puerto Rico, in Yabucoa, the terminal comprises 44 storage tanks with a
storage capacity of roughly 4.6 million barrels. The terminal is capable of storing gasoline,
jet fuel, diesel, fuel
oil, and crude oil.


The acquired Royal Dutch Shell assets represent an important step in Buckeye's growth objectives.
Buckeye's first acquisition outside the continental United States brings the company’s total storage capacity to
o
ver 30 million barrels.

The acquisition offers geographic diversity for Buckeye’s operations while also providing strong local demand
and potential regional growth opportunities. Furthermore, the acquisition is expected to immediately increase
distributabl
e cash flow, according to management. Buckeye recently paid cash distribution of 97.25 cents per
limited partner unit for the quarter ended September 30, 2010.

Buckeye reported third
-
quarter 2010 operating earnings of 93 cents per limited partner unit, whi
ch matched
the Zacks Consensus Estimate. The results of the partnership beat the year
-
ago earnings of 89 cents per
share. The Zacks Consensus earnings per unit for fourth quarter 2010, fiscal 2010 and fiscal 2011 are 97
cents, $3.46 and $3.66, respectively
.

Buckeye Partners L.P. primarily operates refined petroleum products pipeline systems in the United States.
The partnership’s independent refined petroleum products pipeline system stretches across 5,400 miles with
about 67 products terminals.

Buckeye Par
tners currently retains a Zacks #3 Rank (short
-
term Hold rating), which supports our long
-
term
Neutral recommendation on the stock. The partnership is favorably positioned versus its closest peer
Ferrellgas Partners L.P.

(
FGP
) with a Zacks # 4 Rank (Sell), based on short
-
term ratings.

GD

Gets

Marine

Vehicle

Contract



Posted Mon Dec 13, 05:40 pm ET

GeneralDynamics Land Sys
tems


Canada, a business unit of
General Dynamics Corporation

(
GD
)
received from the U.S. Marine Corps Systems Command a $317.4 million contract for upgrade kits under the
Mine Resistant Ambush Protected (
MRAP) vehicle program. The company expects to finish delivery of the
kits by November 2011.

GeneralDynamics Land Systems


Canada, located in London, Ontario, Canada, is a business unit of
General Dynamics Land Systems of Sterling Heights, Michigan. Genera
l Dynamics Land Systems is part of
the company’s Combat Systems business segment.

General Dynamics Land Systems plays an integral role in the U.S. Army's core vehicle programs, including
the Abrams tank (M1A2 SEP upgrade and AIM), Stryker infantry combat v
ehicle and Fox NBC
reconnaissance vehicle, and in its modernization plan.

General Dynamics’ Combat Systems business segment witnessed 13.6% decline in revenues in the first nine
months of 2010 on being compared year over year. This was due to lower volumes

in the Abrams main battle
tank and Stryker wheeled combat vehicle programs.

Total backlog of General Dynamics at the end of the first nine months of 2010 was $61.83 billion, which
slipped 6.7% from $66.3 million reported in the year
-
ago period. Going forw
ard performance of the company
will improve from new contracts like the Stryker wheeled armored vehicle program, agreement with NASA to
modernize the ground segment of the satellite communications network, a deal with the U.S. Navy for
supplying long
-
lead
materials, and advanced design efforts for the Mobile Landing Platform program.



S.S. Corporation (Pvt) Ltd.

DHA Phase VI

Karachi, Pakistan

Phone: +92
-
21
-
5240131
-
40

December
-
13
-

2010

16

General Dynamics, headquartered in Falls Church, Virginia is a market leader in business aviation; land and
expeditionary combat systems, armaments and munitions; shipbuilding
and marine systems; and information
systems and technologies. The company operates through four business segments − Information Systems &
Technology, Combat Systems, Marine Systems, and Aerospace. The major competitors of the company are
Northrop Grumman C
orporation

(
NOC
),
Raytheon Company

(
RTN
) and
Force Protection Inc.

(
FRPT
).

General Dynamics currently
estimates full
-
year 2010 operating earnings in the range of $6.70 to $6.75 per
share, taking into consideration the robust performance during the third quarter. The Zacks Consensus
Estimates for fourth
-
quarter 2010, fiscal year 2010 and 2011 are $1.85 per
share, $6.76 per share and $7.09
per share, respectively.

General Dynamics currently retains a Zacks #3 Rank (short
-
term Hold rating). We also maintain our Neutral
recommendation on the stock.

SABESP

Prices

Its

Notes

Due

2020


Posted Mon Dec 13, 05:25 pm ET

Sao Paulo, Brazil
-
based
Companhia de Saneamento Basico do Estado de Sao Paulo
(
SBS
), or
SABESP
,
recently announced th
e pricing of its 6.25% Notes due 2020. The company will be issuing notes amounting to
$350.0 million to qualified institutional investors outside Brazil. The proceeds of the notes issuance will be
utilized to pay down SABESP’s outstanding debts.

The compan
y’s major portion of debt is long term in nature and is from national and international credit
agencies like the BID (Interamerican development bank), BNDES (Brazilian national development bank), IDB
(Interamerican development bank), JBIC (Japan bank for i
nternational cooperation), Banco do Brasil (state
-
owned Brazilian Bank), etc. All together, loans from multilateral credit agencies represent around 70% of the
company’s total debt.

In the third quarter of 2010, SABESP’s loans and financing, net of current

portion soared 7.9% sequentially to
R$6,496.3 million. In September, the company sought loan from Inter
-
American Development Bank (IBD) to
finance the 3rd Phase of the Tietê Project, requiring an aggregate amount of US$800 million.

Another loan agreement
with Japan International Cooperation Agency (JICA) was signed in October to
finance the Environmental Improvement Integrated Program at Billings reservoir water source area
(ProBillings).

Companhia de Saneamento Basico do Estado de São Paulo is the largest

water and sewer service provider
in the Americas and the third largest in the world. We believe SABESP stands well positioned to grow over
the long run. The company aims at maintaining its water coverage ratio at 100% and improving its sewage
ratio to 90%

from 80% by 2018.

Moreover, in the near term, SABESP should benefit from the September 2010 tariff adjustment, a more
relaxed monetary policy in Brazil, and its non
-
cyclical and relatively low risk business model.

The positive momentum, however, gets rest
ricted by the company’s aggressive investment policy, weaker
cash generation, increasing financial burden from higher debt levels, and huge dependence on weather
conditions. Despite the company’s apparent weaknesses, we believe SABESP has the potential to
excel in
the coming quarters.

We currently maintain an Outperform recommendation on the stock.



S.S. Corporation (Pvt) Ltd.

DHA Phase VI

Karachi, Pakistan

Phone: +92
-
21
-
5240131
-
40

December
-
13
-

2010

17

Bull

of

the

Day

Sanofi
-
Aventis S.A.
-

ADR (SNY)

By: Zacks Equity Res
earch

December 13, 2010 |
Comments
: 0

Recommended this article (0)

SNY


Sanofi
-
Aventis'

(
SNY

-

Analyst

Report
) third quarter EPADS of $1.22 was above the Zacks Consensus Estimate of
$1.17 but a couple of cents below the y
ear
-
ago earnings.

We are encouraged to see Sanofi's progress with its pipeline. While new product launches should make significant
revenue contributions in the early part of the decade, we expect Sanofi to continue looking to contain operating costs in
or
der to grow earnings in the face of weakening sales of some of its biggest products. We also expect the company to
look to grow revenue through additional partnering deals and acquisitions.

We believe the current share price represents an attractive entry

point for long
-
term investors and are upgrading the stock
to Outperform. Emerging markets, contributions from new products, continued strong performance of the diabetes and
generics segments should help drive results.

Bear

of

the

Day

Republic Services (RSG)

By: Zacks Equity Research

December 13, 2010 |
Comments
: 0

Recommended this article (0)

RSG


Republic Services Inc.

(
RSG

-

Anal
yst

Report
) became the second largest player in the non
-
hazardous
solid waste industry in the U.S. after its merger with Allied Waste.

Even after a slight decrease in revenues during the third quarter, the company reiterated its dividend at $0.20
per sha
re. The company also reduced its debt sharply by 58% to $2.8 billion in the third
-
quarter. However,
compared with its peers, the company is recovering at a slower
-
than
-
expected rate, with revenue hovering
around $2.06 billion over the past two quarters.

W
e have downgraded Republic Services from Neutral to Underperform and set a target price of $26.00. Our
target price is $26.00, or 15.3x 2010 EPS.

Aggressive

Grow
th

Pier 1 Imports



S.S. Corporation (Pvt) Ltd.

DHA Phase VI

Karachi, Pakistan

Phone: +92
-
21
-
5240131
-
40

December
-
13
-

2010

18


By: Bill Wilton

December 13, 2010 |
Comments
: 0

Recommended this article (0)

PIR


Pier 1 Imports, Inc

(
PIR

-

Snapshot

Report
) is heading into a quarterly earnings release later this week.
Gi
ven the recent sales report and analyst estimates, we could be in store for a nice bump in share price.

This Zacks #2 Rank (Buy) up nicely since being featured as a Zacks Rank Buy, but there are plenty of
reasons that we could be heading higher.

Company
Description


Pier 1 Imports is a specialty retailer focused on home furnishings, gifts and similar items. As you may guess
from the company's name, its products are imported from around the world to give its customers a unique
selection.

Great Sales Figur
es


On Dec 2 Pier 1 Imports released quarterly sales numbers that showed a 10% increase in same store sales.
Total sales climbed over 8% to $354 million for the period ending Nov 27.

The President and CEO said that the comps figures and merchandise margin
s are coming in better than
expected. Spending per customer and traffic are up as well.

Full quarterly results will be releases before the market opens on Dec 16.

Bullish Outlook


Estimates continued to improve on the news and the Zacks Consensus for thi
s fiscal year, which ends in
February, is up 3 cents to 74 cents. Over the past 3 months that number is up 9 cents.

Next year's forecasts are calling for a slight pull back in earnings, to 70 cents. But if the upward momentum
continues that will easily ch
ange. Perhaps when the company reports later this week. In fiscal 2010 the
company's profit was just a penny, so the overall growth has been exponential.

Valuations


Shares of PIR are trading with solid valuations as well. The forward P/E is about 14 time
s and the PEG is 1.1.
Pier 1's price to sales is about 0.9, which is in line with similar companies.

The Chart




S.S. Corporation (Pvt) Ltd.

DHA Phase VI

Karachi, Pakistan

Phone: +92
-
21
-
5240131
-
40

December
-
13
-

2010

19

The stock is up quite a bit since being featured as a Zacks Rank Buy back in late June, setting a new 52
-
week high. But given the valuations an
d earnings momentum, this weeks earnings release could push shares
to even higher levels.

Read

the

June

29th

Feature

Here



Bill Wilton is the Aggressive Growth Stock Strategist for Zacks
.com. He is also the Editor in charge of the
market
-
beating
Zacks

Small

Cap

Trader

service


Last Week's Aggressive Growth Zacks Rank Buy Stocks


Haynes In
ternational, Inc.

(
HAYN

-

Snapshot

Report
) has been improvin
g each quarter for the past year
and the company expects that to continue into fiscal 2011.

This Zacks #1 Rank (Strong Buy) surged to multi
-
year highs on the last earnings news, but rising growth
projections are keeping valuations in check.

Read

Full

Article.


TRW Automotive Holdings Corp

(
TRW

-

Analyst

Report
) is trading at its highest levels in more than 5
years, thanks to strong management and an industry
-
wide recovery.

Thanks to rising estimates, this Zacks #1 Rank (Strong Buy)
is trading at a good value on top of its multiplying
earnings.

Read

Full

Article.


PriceSmart, Inc.

(
PSMT

-

Snapshot

Report
) shares were roaring thanks to the company's third consecutive
earnings surprise. Then yesterday's announcement pushed the s
tock even higher.

However, rising estimates have been enough to give shares a Zacks #1 Rank (Strong Buy).

Read

Full

Article.


Buenaventura Mining Company Inc.

(
BVN

-

Snapshot

Report
) is coming off of a great quarter, but due to
some potential chan
ges from the Peruvian government you can get shares at a decent value.

The stock is a Zacks #1 Rank (Strong Buy) with excellent growth prospects.

Momentum

Autozone, In
c.



S.S. Corporation (Pvt) Ltd.

DHA Phase VI

Karachi, Pakistan

Phone: +92
-
21
-
5240131
-
40

December
-
13
-

2010

20


By: Michael Vodicka

December 13, 2010 |
Comments
: 0

Recommended this article (1)

AZO


Autozone, Inc.

(
AZO

-

Analyst

Report
) continues to trade near its all
-
time high after reporting strong Q1 re
sults in early
December that included a 10% earnings surprise. With a discounted valuation and bullish growth projection, this Zacks #1
rank stock offers a nice tune up for the momentum investors of the world.

Although shares traded a bit erratically on t
he news, AutoZone reported strong Q3 results on Dec 7 that beat analyst
expectations and showcased the company's strong rebound from the recession of 2009.

First
-
Quarter Results


Revenue for the period was up 13% from last year to $1.8 billion. Earnings a
lso came in strong at $3.77, 10% ahead of
the Zacks Consensus Estimate, where the company now has an average earnings surprise of 6% over the last four
quarters in a fairly challenging consumer environment.

Although AutoZone's impressive same
-
store sales
growth of 9.5% drove the good results, the company also saw its costs
go down, with gross margin expanding 40Bps to 50.7% of sales. Operating expenses also declined, falling to 33.6% of
revenue from 33.9% last year.

Share Buy Backs


AutoZone was also busy

returning value to shareholders during the quarter, repurchasing 1.3 million shares of its
common stock for $300 million, with $386 million left on the repurchase authorization.

Estimates


We did see a little bit of movement in estimates off the good qua
rter, with the current year gaining 57 cents to $17.98 and
the next
-
year estimate adding 72 cents to $20.25, a solid 13% growth projection.

Valuation


But in spite of the solid gains, AZO still has value, trading with a forward PE of 15X, a nice discount
to the industry
average of 17X.

6
-
Month Chart


On the chart, shares were volatile on the good quarter before resuming the upward trend that has been in play for the last
18 months. Look stochastic below the chart is signaling that shares are trading safel
y away from over
-
bought territory.
Look for support from the trend line on any weakness, take a look below.

Read

the

Sep

29

AZO

article

here




S.S. Corporation (Pvt) Ltd.

DHA Phase VI

Karachi, Pakistan

Phone: +92
-
21
-
5240131
-
40

December
-
13
-

2010

21


Last Week's Momentum Zacks Rank Buy Sto
cks


Celanese Corp.

(
CE

-

Analyst

Report
) recently jum
ped to a new multi
-
year high at $39.99 after reporting strong Q3
results in late October that included a 19% earnings surprise. With four consecutive earnings surprises and a bullish
growth projection, this Zacks #1 rank stock has been thoroughly coated in

momentum.
Read

Full

Article.


Polaris Industries, Inc.

(
PII

-

Snapshot

Report
) has broken any thaw on its share price from 2009, recently hitting a new
multi
-
year high at $77.93 after reporting strong Q3 results in late October that included a 20% earni
ngs surprise. With
estimates on the rise and a bullish growth projection, this Zacks #1 rank stock has the right engine for momentum.
Read

Full

Article.


Gardner Denver, Inc.

(
GDI

-

Snapshot

Report
) has been surging with the market since early September,

recently hitting
a new all
-
time high at $70.03 on the heels of a solid 21%, Q3 earnings surprise. With an attractive valuation and bullish
growth projection, this Zacks #1 rank stock has engineered some serious momentum for itself.
Read

Full

Article.


Ann Taylor Stores Corp.

(
ANN

-

Snapshot

Report
) recently hit a new multi
-
year high at $27.84 after reporting strong
Q3 results in mid November that included a 24% earnings surprise. With a bullish next
-
year estimate calling for 30%
growth and a strong finan
cial profile, this Zacks # 1 rank stock is dressed for momentum.
Read

Full

Article.


Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the new

Zacks

Momentum

Trader

Service.


Growth

&

Income

Enbridge Inc

By: Todd
Bunton

December 13, 2010 |
Comments
: 0

Recommended this article (0)

ENB


Enbridge Inc

(
ENB

-

Snapshot

Report
) carried its strong momentum into the third quarter, delivering EPS
13% above the Zacks Consensus Esti
mate. Income from operations improved 35% year
-
over
-
year on strong
revenue growth.

Enbridge is focused on rewarding its shareholders and sports an attractive 3.5% dividend yield. The company
is confident that it can grow free cash flow by double
-
digit rat
es over the next several years, which should
mean that more dividend hikes are on the way.

Third Quarter Results




S.S. Corporation (Pvt) Ltd.

DHA Phase VI

Karachi, Pakistan

Phone: +92
-
21
-
5240131
-
40

December
-
13
-

2010

22

Enbridge posted third quarter earnings per share of 52 cents, beating the Zacks Consensus Estimate by 6
cents.

Total revenues increased 33.2
% year
-
over
-
year. Liquids pipelines revenues surged 34.5%, while natural gas
delivery and services revenue jumped 33.9%.

Income from operations improved a stellar 34.9% year
-
over
-
year.

Looking Forward


CEO Patrick Daniel stated in the third quarter earni
ngs release that the company is on track to achieve full
year EPS in the upper half of its guidance of $2.50 to $2.70.

The Zacks Consensus Estimate for 2010 is toward the upper end of the range at $2.67. This represents 22%
EPS growth over 2009. The 2011
estimate is currently $2.84, or 6% higher than the 2010 consensus
estimate. It is a Zacks #2 Rank (Buy) stock.

Rewarding Shareholders


ENB sports an attractive 3.5% dividend yield. The company believes it can grow free cash flow at 18% per
year over the n
ext several years which would allow the company to continue raising its dividend.

Its payout ratio is 66%, roughly in
-
line with the industry average.

Valuation


Shares are trading at 20.6x forward earnings, a slight discount to the industry average of 21
.1x. Its price to
sales ratio of 1.5 is also below the peer group of 2.0.

Enbridge Inc operates the largest crude oil and liquids pipeline system in the world. It is also a leader in
natural gas distribution.

The company is based in Calgary, Alberta, Can
ada and has a market cap of $20.6 billion.

Read

the

October

8

article

here.


Last Week's Growth & Income Zacks Rank Buy Stocks:


Neenah Paper, Inc.

(
N
P

-

Snapshot

Report
) continues to deliver solid top
-
line growth despite challenging
industry conditions. The company r
ecently reported third quarter EPS that crushed the Zacks Consensus
Estimate by 50%. It has also been aggressively paying down its debt while saving enough room to boost its
dividend for the first time.
R
ead

the

full

article.


Wolverine World Wide, Inc.

(
WWW

-

Snapsh
ot

Report
) carried its strong momentum into the third quarter
and delivered its third consecutive positive earnings surprise. The company is seeing strong top
-
line growth in
each division while also leveraging its operating expenses.
Read

the

full

article.


South Jersey Industries, Inc.

(
SJI

-

Snapshot

Report
) is a strong, stable business with a history of
rewarding its shareholders with dividend increases. True to form, the company recently announced an 11%
hike in its quarterly dividend, marking the 12th consecuti
ve year of an increase.
Read

the

full

article.




S.S. Corporation (Pvt) Ltd.

DHA Phase VI

Karachi, Pakistan

Phone: +92
-
21
-
5240131
-
40

December
-
13
-

2010

23

Chesapeake Utilities Corporation

(
CPK

-

Snapshot

Report
) recently reported earnings of 17 cents per
share for the third quarter of 2010, well ahead of the 2 cent consensus estimate. It marked the company's 5th
consecut
ive positive earnings surprise. The stock has been surging along with the estimates, but valuation
remains in check.
Read

the

full

article.


Todd Bunton is the Growth & Income Stock Strategist for Zacks.
com.



Value

W&T Offshore, Inc.


By: Tracey Ryniec

December 13, 2010 |
Comments
: 0

Recommended this article (0)

WTI


Energy exploration is back as crude, and even natural gas prices, move higher.
W&T Offshore, Inc.

(
WTI

-

Snapshot

Report
) recently announced it was acquiring from Shell interests in several Gulf of Mexico
deepwater producing fields. The company has attractive valua
tions, with shares trading at just 12.9x forward
estimates.

It's been awhile since I covered an energy exploration company as the recession and the Gulf of Mexico
disaster hammered earnings for many of the smaller explorers.

W&T Offshore, which operates 75

fields predominantly in the Gulf of Mexico, was no exception. It lost $1.09
per share in 2009. But it has turned it around in 2010. Analysts expect earnings to jump to $1.34 per share, or
earnings growth of 223%.

Acquisition of Interests in Shell's Gulf
Fields

On Nov 4, the company announced it was acquiring from Shell the interests in 5 Gulf of Mexico deepwater
producing fields known as Taho, SE Taho, Droshky, marlin and Dorado Fields and the possibility of an
interest in a 6th field in the Gulf of Mexic
o shelf.

On Dec 7, however, the company announced that Shell elected to exercise its preferential rights to purchase
2 of the fields: Marlin and Dorado Fields. The original deal was worth $450 million, but without the two fields, it
was reduced to $193 mil
lion. W&T Offshore is paying cash.

W&T Offshore Surprised 231% in the Third Quarter



S.S. Corporation (Pvt) Ltd.

DHA Phase VI

Karachi, Pakistan

Phone: +92
-
21
-
5240131
-
40

December
-
13
-

2010

24

On Nov 2, the company reported its third quarter results and blew by the Zacks Consensus by 30 cents.
Earnings per share were 43 cents compared to the consensus of 13 cents
. It lost 4 cents per share in the third
quarter of 2009.

The quarter was boosted by higher oil production, higher average realized sales prices and lease operating
expenses which declined 36% compared to a year ago.

Zacks Consensus Estimates Rise for 2010

Analysts revised estimates higher for 2010 over the last 30 days as the Zacks Consensus rose to $1.34 from
$1.24 during that time.

They are more cautious about 2011, however.

2 estimates have moved higher and 2 lower for 2011 in the last month while the Z
acks Consensus has held
firm at $1.13 per share. This is an earnings decline of 15.3%.

Still a Value Stock

This Zacks #2 Rank (buy) stock still has solid valuations. In addition to its P/E ratio being under 15, the
company has a price
-
to
-
book ratio of 2.8
which is within the value parameters.

The company also has a excellent 1
-
year return on equity (ROE) of 27.4% which is well above its peers at
18%.

Share recently jumped out to a 2
-
year high.


Update to Previous Value Zacks Rank Buy Stocks

Technology com
panies have seen a strong recovery in the last year and
Itron Inc.

(
ITRI

-

Analyst

Report
) is
no exception. Earnings are expected to rise 88% compared to 2009 when the global recession was hitting
software companies hard. With a low P/E, this growth gives Itron a juicy PEG ratio of just 0.7.
Read

the

full

article.

Demand is strong for IT hardware and software as companies finally have started investing in their
businesses again.
Insight Enterprises Inc.

(
NSIT

-

Snapshot

Report
) is taking advantage of the surge in
demand, as sales jumped 21% in the third quarter
. NSIT is not expensive, trading at just 8.8x forward
estimates.
Read

the

full

article.



S.S. Corporation (Pvt) Ltd.

DHA Phase VI

Karachi, Pakistan

Phone: +92
-
21
-
5240131
-
40

December
-
13
-

2010

25

Domtar Corporation

(
UFS

-

Snapshot

Report
) has successfully navigated the paper market in 2010.
Earnings are expected to grow an astounding 923% in 2010 after a difficult 2009. T
he company is cheap. It
trades at just 7.5x forward estimates.
Read

the

full

article.

Specialty chemicals continue to pick up steam.
Ferro Corporation

(
FOE

-

Snapshot

Report
) is expected to
grow its earnings by 275% in 2010 which is a big turnaround after the compan
y posted a loss in 2009.
Read

the

full

article.

Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor in charge of the market
-
beating
Zacks

Value

Trader

service
. You can follow her at
twitter.com/traceyryniec


Investment

Ideas

Update on 09
-
12
-

2010


Zacks

#1

Rank

Top

Performers

Update on

08
-
12
-

2010


Economic Highlights

Upd
ate on

10
-
12
-

2010


Market News Summary

Stock

Market

News

for

Dec

13,

2010


by Zacks Equity Research on December 13, 2010

On Friday, the markets ended slightly higher

on positive economic data and better
-
than
-
expected rise in
consumer sentiment. However, the markets’ upward movement was subdued somewhat due to investors’
cautious attitude towards European debt crisis, tensions between the two Korean nations and apprehe
nsions
about the tax
-
cuts deal agreement. Nonetheless, the upward movement of the markets resulted in the indices
gaining their two
-
year highs.

The Dow Jones Industrial Average gained 0.35% to 11,410. The Standard & Poor's 500 Index rose 0.60% to
1,240.40
and closed at its highest level since September 2008. The Nasdaq was up 0.80% to close at
2,637.54 and reached its highest level since end of 2007. The CBOE Volatility Index (VIX) rose above 17. On
the New York Stock Exchange, the advance decline ratio was

2:1 and 4.5 billion shares were traded on
Friday.



S.S. Corporation (Pvt) Ltd.

DHA Phase VI

Karachi, Pakistan

Phone: +92
-
21
-
5240131
-
40

December
-
13
-

2010

26



Helping the bullish attitude of investors was the positive data from a survey, reflecting a better
-
than
-
expected
boost in consumer sentiment, in early December. The consumer sentiment index improved from

71.6 to 74.2
on a monthly basis and was at its highest level since June 2010. In the same survey, an indicator of economic
conditions surpassed expectations of 83.1 to reach a level of 85.7. It marked the highest level since the
economic turmoil in early
2008. The markets were also helped by an encouraging report from the Commerce
Department. The trade deficit narrowed more
-
than
-
expected in October, as exports rose 3.2%.

Unemployment claims, one of the nation’s major concerns in difficult times, reported
modest positive results.
First time unemployment claims fell more than expected to 421,000 in the week and the four
-
week moving
average of jobless claims dipped to its lowest level in two years.


Now coming to some key stocks that went up on dividend revi
ew were General Electric (NYSE:
GE
), which
sprung more than 3% after the announcement of a 17% increase in its quarterly dividend. Honeywell
International (NYSE:
HON
) rose 1.25% on the news of a 10% rise in dividends. Western Union Co. (WU),
Whole Food Market (NYSE:
WMFI
) and Tyco International (NY
SE:
TYC
) also reacted positively on dividend
up
-
gradation.


In other news, the S&P 500 index was rearranged and stocks such as, New York Times (NYT), Eastman
Kodak (NYSE:
EK
) and Office Depot (NYSE:
ODP
) were replaced by Netflix (NYSE:
NFLX
), F5 Networks
(NYSE:
FFIV
) and Newfield Exploration (NYSE:
NFX
), respectively. On merger & acquisit
ion news,
Community Health Systems (NYSE:
CYH
) made an offer of $3.3 billion to takeover Tenet Healthcare
(NYSE:
TH
C
).

Company News Summary

Company

News

For

Dec

13,

2010


by Zacks Equity Research on December 13, 2010



Thermo Fisher (NYSE:
TMO
) said it would purchase Dionex (NASDAQ:
DNEX
), a manufacturer of chemical
analysis equipment, for $118.50 per share, or $2.1 billion



According to this w
eekend's Barron's, Mattel (NASDAQ:
MAT
) shares offer good value, with potential for
20% appreciation over the next year




Apple (NASDAQ:
AAPL
) shares were added by Goldman Sachs' (NYSE:
GS
) to its Conviction Buy List, with
a target price of $430



Dell (NASDAQ:
DELL
) has plans to buy Compellent (NYSE:
CML
) for $27.75 per share, or $820 million



Goldman Sachs (NYSE:
GS
) maintained a "neutral" rating for IBM (NYSE:
IBM
) with a target price of $150



Piper Jaffray (NYSE:
PJC
) upgraded JDS Uniphase (NASDQ:
JDSU
) to "overweight" and raised the target
price from $13 to $17



Auriga initiated coverage for Broadcom (NASDAQ:
BRCM
) with a "buy" rating and a target price of $55



S.S. Corporation (Pvt) Ltd.

DHA Phase VI

Karachi, Pakistan

Phone: +92
-
21
-
5240131
-
40

December
-
13
-

2010

27


Sector Data Rank as of

28
-
7
-
2010



Sector

"This
Week's
Zacks Rank
"

"Week ago
Zacks Rank
"

"FY10
Revisions
Ratio "

"FY10
Estimates
Revised

Up "

"FY10 Estimates
Revised Down "

"FY11
Revisions
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
Technology

2.86

2.89

1.99

843

424

1.81

Basic Materials

2.9

2.93

0.95

196

207

1.15

Aerospace

2.9

2.95

0.79

38

48

0.76

Industrial
Products

2.94

2.94

2.09

232

111

1.86

Consumer
Discretionary

2.98

2.98

1.63

312

191

1.25

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

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





S.S. Corporation (Pvt) Ltd.

DHA Phase VI

Karachi, Pakistan

Phone: +92
-
21
-
5240131
-
40

December
-
13
-

2010

28