For Immediate Release
Chicago, IL – January 29, 2010 – Zacks Equity Research highlights Gafisa S.A. (GFA) as the Bull of the Day and Micromet (MITI) the Bear of the Day. In addition, Zacks Equity Research provides analysis on Freddie Mac (FRE), Fannie Mae (FNM) and BlackRock (BLK).
Full analysis of all these stocks is available at http://at.zacks.com/?id=5506
Here is a synopsis of all five stocks:
We are reiterating our Outperform recommendation on Gafisa S.A. (GFA). We have been encouraged by the Stimulus Package and the tax relief announced by the Brazilian government during 2009 and the strong economic recovery of the Brazilian internal market since the onset of the economic crisis.
Third quarter 2009 results were quite positive, mainly considering the still-difficult international economic environment. The Government Housing Program and the R$600 million debenture from Caixa Economica will help Tenda to expand its business plan for the development of projects in the lower-income sector.
Micromet’s (MITI) third quarter loss per share came in at $0.22, wider than the Zacks Consensus Estimate of $0.14.
Micromet’s re-acquisition of blinatumomab rights from MedImmune is of great significance as the company will be able to re-license the drug at more attractive terms. We believe that the company requires the strength of a large established player to accelerate blinatumomab’s clinical development that seems crucial in order to gain a head-start over potential competitors.
Although no treatment options targeting CD19 are currently available commercially, many companies have pipeline candidates targeting it. Given the uncertainty related to its early stage pipeline, we downgrade the stock to Underperform.
Latest Posts on the Zacks Analyst Blog:
Mortgage Delinquencies Still Rising
Freddie Mac (FRE) reported that the serious single family delinquency rate for mortgages in its portfolio rose to 3.87% in December from 3.72% in November, an increase of 15 basis points. Serious delinquencies are mortgages where the homeowner is more than 90 days behind on their payments, but have not yet been foreclosed on.
The serious delinquency rate rose in every month of 2009 (and every month in 2008, for that matter). A year ago the rate stood at 1.72%, at its low point in the first half of 2007, it was well below 50 basis points, so we have seen a nine-fold increase off the bottom and more than a doubling in the serious delinquency rate over the last year.
Any Silver Lining?
If there is any good news in this report, it is that there does seem to be a slight slowing in the rate of growth of the delinquency rate, with the 15 bp rise in December being less than the 18 bp rise in November, which was in turn less than the 21 bp rise in October. The key point, however, is that it is still rising.
If someone is 30 days behind on their mortgage, the odds are that they will correct the problem, but if they are more than 90 days behind, the odds are that they will never come up with the money to catch up. This is a very big pool of foreclosures just waiting to happen. Fannie Mae (FNM) has not released their delinquency rate data yet, but odds are that it will look very similar to the Freddie data.
However, given the number of people who are seriously underwater on their homes, perhaps the better question is why isn’t the delinquency rate higher than it is? If you have a loan out secured by an asset, and the value of the asset is well below the amount of the loan, it is economically irrational to pay off the loan, especially if there is no recourse.
The big boys certainly understand this. BlackRock (BLK) is not going to bring down the whole firm just because they made a bad investment in Stuyvesant Town in New York. No, they write off the small amount of equity they have in the deal and default on their mortgage. If homeowners were rational, they would do the same thing.
True, there are non-economic considerations in deciding if you should continue to pay your mortgage. After all, a house is a home, not just an asset. Still, the question remains, why are so many homeowners pushing themselves into poverty by paying their mortgages when the house just is not worth that much?
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.
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 analyst 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.
Zacks “Profit from the Pros” e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today by visiting http://at.zacks.com/?id=5508.
About Zacks
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it’s your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5509.
Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Follow us on Twitter: http://twitter.com/zacksresearch
Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.
Contact:
Mark Vickery
Web Content Editor
312-265-9380
Visit: www.zacks.com
