For Immediate Release
Chicago, IL – August 6, 2009 – Zacks Equity Research highlights DIRECTV (DTV) as the Bull of the Day and BJ’s Restaurants, Inc. (BJRI) the Bear of the Day. In addition, Zacks Equity Research provides analysis on Qualcomm Inc. (QCOM), Tata Teleservices (TCL) and NTT DoCoMo (DCM).
Full analysis of all these stocks is available at http://at.zacks.com/?id=2676
Here is a synopsis of all five stocks:
DIRECTV (DTV) is set to continue generating healthy free cash flow and earnings growth, with reduced cap ex requirements, healthy ARPU and vigorous growth in its U.S. and Latin American operations. The company’s HD lead should defend its market share, bolster ARPU and help stem decelerating subscriber growth.
We think the HD roll-out with the RBOCs as partners will defend DTV’s market share against cable’s ability to offer video, voice and data (“triple play”), which together with recently tightened credit standards have been impeding subscriber growth. Longer term, we view the IP-TV roll-outs by AT&T and Verizon as serious threats, but those that won’t be fully realized for several years.
Near-term, we expect satellite and cable TV will be relatively defensive recession investments, suffering less subscriber attrition in the recession than other forms of entertainment, and DIRECTV in particular should benefit from its recent efforts to weed out its lower-end customers most likely to churn.
BJ’s Restaurants, Inc. (BJRI) has grown rapidly with its unique concept and high-quality food offered at various price points, while maintaining some of the best unit economics in the industry. Same-store sales, although weak, are outperforming the peer group.
Longer-term, however, we think BJ’s 20%+ unit growth target could become unmanageable or difficult to fund. Since 2002, ROE/ROIC have averaged in the mid single-digits, with full-year results rising above 6% only once, when ROE reached 8% in 2005.
Returns on capital must improve to support long-term growth. Trading at a premium to its growth rate (26x 2010E), we believe BJRI shares are richly priced.
Latest Posts on the Zacks Analyst Blog:
Qualcomm Bullish on India
Growing market traction of 3G wireless devices in India is likely to spur growth of Qualcomm Inc. (QCOM), the largest developer of digital mobile chipsets based on CDMA wireless technology. At present, India has more than 100 million CDMA wireless subscribers, out of which half a million are 3G subscribers.
Currently, Reliance Communications and Tata DoCoMo, a joint venture between Tata Teleservices (TCL) and NTT DoCoMo (DCM) are the two main CDMA service providers in India. In addition, the state-run BSNL, the largest telecom operator in the country and Sistema-Shyam Teleservices are also opting for CDMA2000.
Ministry of Telecommunication of the Indian Government is exploring several options to auction the available spectrum for next-generation high-speed 3G networks. While Reliance Communications and Tata DoCoMo have deployed 3G EV-DO networks using their existing spectrum in 800 Mhz band, BSNL is rolling out 3G HSPA networks in 40 cities.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=5507.
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