Marlboro country

Zacks Equity Research highlights MIPS Technologies as the Bull of the Day and Altria Group the Bear of the Day. In addition, Zacks Equity Research provides analysis on Citigroup and JPMorgan Chase.

Here is a synopsis of all five stocks:

Bull of the Day:

MIPS Technologies develops embedded processors and intellectual property for use in performance-oriented markets such as digital entertainment, wired and wireless communications (including broadband access), office automation, security and automotive markets.

The firm continues to drive bottom-line margins higher in a very difficult environment. The valuation on MIPS has become very compelling as the stock has shed significant value from its 52-week high and the new acquisition has the potential to drive margin expansion.

Further, MIPS recently sold its analog business, which is highly accretive. We would be buyers of the stock at these levels.

Bear of the Day:

Altria Group is the leading domestic tobacco company, which generates significant cash flow and the stock has a high dividend yield. In an effort to expand into adjacent categories, Altria acquired UST, the world’s leading moist smokeless tobacco manufacturer.

However, the company is engaged in numerous tobacco liability suits. Several large punitive damage awards have been upheld, most recently the $79.5 million judgment in the Williams case in 2009.

In addition, the 150+% federal excise tax increase should dramatically reduce cigarette volume. A Sell rating is recommended.

Latest Posts on the Zacks Analyst Blog:

Even Landlords May Be Hurting

2Q09 asking rent fell 0.7% year-over-year to $1,040 a month, and down 0.6% from on a linked quarter basis. In the U.S.’s largest U.S.’s apartment market, New York, vacancies fell 0.5% on a linked quarter basis and a 4.0% declined year-over-year to 2.9%, despite a 1.7% decrease in rent to the $2,680 level. In addition, other areas of the country (such as Las Vegas, San Francisco and San Jose, California) had effective rents that dropped more than 2.0% year-over-year.

Nationally the picture may grow worse, with approximately 45% of the more than 100,000 units from new construction for 2009 already on the market. As unemployment has continued to mount, the largest tenant group — 18-24-year-olds — has been hardest hit.

With general expectations of an economic recovery pushed back to early 2010, lower rents and higher vacancies should be expected to continue over the near term.

With the apartment buildings sector typically the leader for all commercial real estate categories with respect to defaults, it is extremely probable that financial institutions such as (but not limited to) Citigroup (NYSE: C), Bank of America and JPMorgan Chase will continue to experience negative commercial real estate credit quality trends during the coming quarters.

Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.

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.

About the Analyst Blog

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.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

SOURCE: Zacks.com

Zacks.com
Mark Vickery
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