We are maintaining our Sell recommendation on Overseas
Shipholding Group, Inc. (<a href=http://www.zacks.com/stock/quote/osg>OSG</a>), and raising our target price
to $30. OSG reported first quarter diluted EPS before
nonrecurring items of $1.03, above the $1.00 consensus,
but below our $1.06 estimate as revenues came in weaker
than expected from lower spot tanker rates, partly offset by
increased revenue days.
We are slashing our 2009 diluted
EPS estimate to a loss of $0.45 per share from earnings of
$2.10 per share, as we now believe the impact of the global
economic slowdown will be more pronounced than
previously expected. We have cut our 2009 revenue
assumptions due to reduced estimates for spot market
rates (roughly 45% of the company s fleet is exposed to the
spot market) and fewer revenue days.
Our initial estimate
for 2010 is a $0.05 loss per share. While OSG recently
increased its dividend by 40%, we cannot rule out a
dividend cut in the event of a protracted economic
May 31, 2009 | Filed Under Stocks to Sell
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The recent strength in crude oil prices has
improved the outlook for a cyclical recovery.
Historically, jackup drillers like ENSCO (<a href=http://www.zacks.com/stock/quote/esv>ESV</a>) have enjoyed strong
early-cycle leverage, a trend that we believe will
play out this time as well.
While the near-term
situation is expected to remain weak, with rig
oversupply and soft demand weighing on dayrates,
the medium to long-term outlook remains
favorable. ENSCO enjoys strong leverage to this
outlook given its fleet of premium jackup rigs, an
exceptionally strong balance sheet, and growing
new $45 price objective, raised from $40 before, results from 2009 P/E and EV/EBITDA multiples of 7.4x
and 4.3x, respectively, both well within historical trading ranges.
May 31, 2009 | Filed Under Stock Picks
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Prices have peaked due to the record commodities run-up and also by slowing economies. We do, however, have Buys on DRD Gold and Harmony Gold.
MIDLAND, TX--(Marketwire - May 29, 2009) - StarInvest Group, Inc (OTCBB: STIV) is pleased
to announce the completion of the acquisition of EXX.COM ("EXX").
EXX is a front end financial system with applications for risk management,
regulatory compliance, real time information for risk evaluation, and
quotations services. EXX's CEO James Davico stated: "We are excited about
the prospects of expanding EXX's business plan worldwide. We believe the
synergy between the companies will be highly beneficial for our
Align Technology (<a href=http://www.zacks.com/stock/quote/algn>ALGN</a>) is engaged in the design,
manufacture, and marketing of a proprietary system,
Invisalign, for the treatment of crooked teeth. The
company's business fundamentals are negatively
affected by the current economic turbulence.
such, we expect revenue to decline in FY09.
Furthermore, we think that the earnings quality could
become an issue as management finds it difficult to
meet growth targets.
We are recommending a Sell
rating for this stock. We think that the shares deserve to trade at 10% discount to the comparable
mean. This equates to a P/S multiple of approximately 2.0x and to a target price of $8.80.
May 28, 2009 | Filed Under Stocks to Sell
| Leave a Comment
As a result of its large non-US revenue base, IBM
Corporation (<a href=http://www.zacks.com/stock/quote/ibm>IBM</a>) has been better insulated from the
recent weakness in the U.S. economy than many of
its peers. IBM's Q109 results indicate its strong
position in emerging markets, which should continue
to help drive growth.
Moreover, the company has
focused on driving its bottom line through cost cutting
efforts. It re-affirmed EPS guidance for the full year
of 2009 and 2010. Although, revenue is not expected
to grow by much, we expect margin improvements in
The company's long-term prospects look
brighter as it maintains a strong position in the
software and services market. We maintain our Buy
rating on IBM shares and maintain our price target of
May 28, 2009 | Filed Under Stock Picks
| Leave a Comment
SALT LAKE CITY, UT--(Marketwire - May 28, 2009) - Cancer Therapeutics, Inc. (OTCBB: CTHP),
an emerging biotechnology business incubator with a specific emphasis on
disruptive cancer treatments and nanotechnology, announced today it has
completed a formal agreement to acquire a minority ownership share of
NanoTherapies, LLC. Finalization of the agreement comes after signing a
Letter of Intent as reported in a press release dated May 12, 2009 along
with the completion of an extensive due diligence review which was being
conducted prior to the LOI.
CINCINNATI, OH--(Marketwire - May 28, 2009) - Intelligrated and FKI Logistex Group Limited
today announced the signing of a definitive agreement to combine the two
businesses, creating the leader in automated material handling systems and
services. Under terms of the agreement, Intelligrated will purchase the FKI
Logistex operations located in North and South America from Melrose plc
(LSE: MRO), a UK-based specialist manufacturing investment group. The
combined company will continue to manufacture and support its Crisplant
brand loop sorters, Alvey brand palletizers, Real Time Solution fulfillment
systems as well as other products and services traditionally offered by
both Intelligrated and FKI Logistex.
Pioneering Smart Grid Company Becomes First to Offer 100% High Bandwidth Coverage
We believe that banks in stable emerging economies, such as Chile, Brazil or India, may be more attractive investments. Our Buys are ITU, SAN and HDB.
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