For Immediate Release
Chicago, IL – January 5, 2010 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Wells Fargo & Co. (WFC), Goldman Sachs Group (GS), Morgan Stanley (MS), Shutterfly Inc. (SFLY) and Target Corp. (TGT).
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Here are highlights from Monday’s Analyst Blog:
WFC Pays $25M in Stock Bonuses
Carrying out its aforesaid bonus payment plans, on Dec. 31, 2009, Wells Fargo & Co. (WFC) announced that it has paid stock bonuses worth $25 million to its top four executives. The company also declared its denial for any cash bonus payments for the fiscal year 2009. Moreover, disablement of selling this bonus stock for at least the next five years, subject to company performance, came in as another rider of bonus payments.
Wells Fargo has taken a method similar to the one that Goldman Sachs Group (GS) had applied last week for bonus payments. Morgan Stanley (MS) is also considering one such proposal.
According to the announcement, Wells Fargo will pay bonuses in the form of stock, namely the “retention” shares of its common stock. By issuing these shares for a three-year vesting period subject to achieving a defined performance target, the company retains the authority to seize the stock bonus of the executives in case they join a rival company. However, any cash bonus payment for 2009 has been completely nixed to avoid any distress and undue misunderstanding in the market.
As intended, the announcement of stock bonuses came in just after Wells Fargo exited the Troubled Asset Relief Program (TARP) on Dec. 23, 2009. Wells Fargo’s decision was crucial for the retention of its top four executives, who are significantly responsible for the company’s performance. Despite the global economic turmoil, Wells Fargo is believed to have attained the current level of stability and a vital Wachovia acquisition primarily owing to its meticulous and diligent managerial force. In Aug. 2009, the company had also raised the salaries to reward these executives.
Shutterfly Upped to Outperform
We are upgrading our recommendation on the shares of Shutterfly Inc. (SFLY) to Outperform. Increased usage of digital cameras combined with accessibility of high-speed internet provides significant expansion potential for the company. Product innovation, strategic partnerships with retailers and opportunistic acquisition also augur well. We believe Shutterfly’s focus on developing a successful commercial printing business aided by strategic partnerships will significantly contribute to its earnings.
Shutterfly’s third-quarter loss of 25 cents per share was 4 cents better than the Zacks Consensus Estimate, primarily driven by a better-than-expected growth in revenue.
Shutterfly is innovating in the Personalized Products and Services category to drive print customers toward higher revenue and higher margin products. The company has already begun to realize leverage in its business model in gross margins, operating margins and capital expenditures. The capital expenditures are arriving from its strategic storage and manufacturing initiatives. These structural improvements should benefit the company, going forward.
Shutterfly has teamed up with Target Corp. (TGT), a leading discount retailer in the United States, to increase brand awareness and make its services available in Target stores and on the Target.com website. During 2008, the company entered into a strategic relationship with Group O, a leading provider of marketing services, to provide commercial print services. Additionally, the company acquired Nexo in 2008 and TinyPictures in September 2009.
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