For Immediate Release
Chicago, IL – February 25, 2010 – Zacks Equity Research highlights Autoliv (ALV) as the Bull of the Day and St. Mary Land & Exploration (SM) the Bear of the Day. In addition, Zacks Equity Research provides analysis on Fannie Mae (FNM), Freddie Mac (FRE) and Bank of America Corp.(BAC).
Full analysis of all these stocks is available at http://at.zacks.com/?id=5506
Here is a synopsis of all five stocks:
Autoliv (ALV) has maintained a stable market share globally, supported by the increasing importance of vehicle safety needs.
Furthermore, the company has aimed to tap huge market potential by expanding into low-cost countries and making meaningful acquisitions. It is also known in the industry for its innovative product launches.
In the most recent quarter, the company’s profit significantly improved from the year-ago level and beat the Zacks Consensus Estimate. We, therefore, continue with our Outperform recommendation on the stock and set a target price of $50.
We are initiating coverage on St. Mary Land & Exploration (SM) with an Underperform recommendation and a target price of $30.
Over the last few years, the company has been building a significant position in emerging shale plays in order to reposition it as more of a resource play focused company. To accelerate this initiative, it has recently sold its non-core Rocky Mountain properties. With an increasing spending on exploration and drilling program, the company is expecting 20% production growth this year.
Given our cautious outlook for natural gas prices in the near to medium term, we believe all these positives may be drowned out as the company’s production profile is fairly natural gas weighted.
Latest Posts on the Zacks Analyst Blog:
A Deluge of Homeowners Underwater
The houses that are underwater are the houses that are in the shadow inventory of houses that are likely to come on the market. That means that housing prices will be under more pressure in places like Nevada and Arizona than they will be in New York or Montana. This is despite the fact — indeed, in part because of the fact — that housing prices have already fallen far more in Las Vegas than in Tulsa.
There is a self-reinforcing downward spiral to housing prices. When the extraordinary government support to the housing market ends this spring — the first-time buyer tax credit and the Fed buying up $1.25 Trillion of mortgage backed securities, mostly those backed by Fannie Mae (FNM) and Freddie Mac (FRE) are the two most important — we will probably see another down-leg in housing prices, and the worst of it is likely to be in those areas that are already hard hit.
There is a relationship between the unemployment rate and the percentage of underwater homes, but it is far from exact. Montana and North Dakota have some of the lowest unemployment rates, while the rates in Nevada, Florida and Michigan are well above the national average.
However, there are several high unemployment states such are South Carolina and Rhode Island that are squarely in the middle of the pack, while Idaho and Utah have below average unemployment rates yet have relatively high numbers of underwater mortgages. When someone is underwater on their home, and also becomes unemployed, the risk of foreclosure really shoots up.
BofA OK’d to Raise Common Shares
Bank of America Corp.(BAC) shareholders on Tuesday approved the company’s intention to lift its number of common shares to 11.3 billion from 10 billion. The bank felt it necessary to increase its outstanding share-count to issue new stock to raise capital for the purpose of paying back its TARP loan.
With an intention to raise the number of common shares, BofA called a special meeting after paying back its TARP loan in full. In Dec 2009, BofA repaid the entire $45 billion of bailout money it had received from the government for its participation in the Troubled Asset Relief Program (TARP) during the height of the credit crisis. Out of the total 80% votes of the shareholders, the proposal was approved by 76%.
The repayment of TARP money followed BofA’s sale of $19.29 billion worth of common equivalent securities that would convert into common stock. BofA funded the repayment using a combination of cash from its corporate fund and sale of securities.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=5507.
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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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