For Immediate Release
Chicago, IL – November 5, 2009 – Zacks Equity Research highlights Novatel Wireless (NVTL) as the Bull of the Day and The Corporate Executive Board (EXBD) the Bear of the Day. In addition, Zacks Equity Research provides analysis on Automatic Data Processing (ADP), Johnson & Johnson (JNJ) and Kraft Foods (KFT).
Full analysis of all these stocks is available at http://at.zacks.com/?id=5506
Here is a synopsis of all five stocks:
Bull of the Day:
We upgrade our recommendation for Novatel Wireless (NVTL) to Outperform following the blockbuster financial results of its third quarter 2009.
We expect the top-line of Novatel to maintain its current growth rate supported by strong demand for MiFi mobile intelligent hotspot and USB modems.
The company has generated a record-high level of free cash flow and significantly improved its gross margin. In addition, the company has a very strong balance sheet, capable to support its long-run business endeavors. Management has made the decision to extend the MiFi platform with new features and functionality, as well as building a MiFi ecosystem through organic development and strategic partners.
Bear of the Day:
We maintain our Underperform rating on shares of The Corporate Executive Board (EXBD). While Q3 EPS beat expectations, the company continues to experience deterioration in key operating metrics, including contract value.
Given the current operating pressures, along with ongoing concerns regarding a slowing economy, we believe the shares should trade at a discount to the peer group average. As such, we anticipate that the company's shares should underperform the market in the near-term.
Latest Posts on the Zacks Analyst Blog:
ADP Sees 203,000 Jobs Lost
Automatic Data Processing’s (ADP) read on manufacturing is in direct contrast with the ISM manufacturing survey which came out on Monday and indicated that manufacturing was actually gaining jobs in October. We will see on Friday which one was right when the Bureau of Labor Statistics (BLS) comes out with the official employment numbers. The consensus for the BLS (which includes government jobs, while ADP does not) report is for a decline of 175,000 jobs. The ADP report might make people a little bit more inclined to take the over on that number, but I don’t think by a lot.
By firm size, it looks like large firms, which tend to have better access to financing, are faring better than their little brothers. They lost a total of 53,000, while medium and small firms each lost 75,000 thousand. Traditionally, small businesses are one of the main engines of job creation in the country. However those numbers are a little bit deceptive since small businesses employ more people overall than do large businesses.
Specifically, there are 17.9 million people working for firms with more than 500 employees, 42.3 million working for firms between 50 and 499 employees and 48.1 million working for firms with fewer than 50 workers. Thus on a percentage basis, large employers dropped 0.3% of their payroll in October, while medium-sized firms dropped 0.18% and small firms dropped less than 0.16%. As evidenced by the announcement yesterday by Johnson & Johnson (JNJ) that it would be trimming back its worldwide workforce by 7%, even the largest, most well-financed and stable of companies have not been immune from layoffs in this cycle.
Kraft Foods Beats, Raises Guidance
Kraft Foods (KFT) reported strong second-quarter results with earnings of 55 cents per share, above the Zacks Consensus Estimate of 48 cents. Quarterly earnings were also up 61.8% year-over-year.
However, net revenues for the quarter declined 5.7% year-over-year to $9.8 billion, primarily due to the unfavorable negative 5.6% impact of foreign currency and a negative 0.6% impact from divestitures. Organic revenues increased 0.5%, driven by a 0.7% gain from volume and mix, which was partially offset by negative 0.2% from pricing.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=5507.
About the Bull and Bear of the Day
Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.
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Updated throughout every trading day, the Analyst Blog provides analysis from Zacks Equity Research about the latest news and events impacting stocks and the financial markets.
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