For Immediate Release
Chicago, IL – December 9, 2009 – Zacks Equity Research highlights National Semiconductor (NSM) as the Bull of the Day and St. Jude Medical (STJ) the Bear of the Day. In addition, Zacks Equity Research provides analysis on American Express (AXP), Capital One (COF) and H&R Block Inc.(HRB).
Full analysis of all these stocks is available at http://at.zacks.com/?id=5506
Here is a synopsis of all five stocks:
National Semiconductor (NSM) is an OEM of analog and mixed-signal integrated circuits. Forward guidance is for a revenue increase of 2-9% in the first quarter.
Management has refocused R&D into areas that should drive margins. It has also initiated a massive restructuring program to further lower the break-even point.
Although National has been negatively impacted by the recession, the business continues to exhibit the necessary ingredients for a strong comeback. We are reiterating our Buy rating on NSM shares.
We look for global demographic trends — aging populations in developed nations and the rapid urbanization of developing countries — to fuel long-term growth of St. Jude Medical (STJ). These trends give rise to growing demand for cardiovascular health care.
However, recent weaknesses in the CRM segment, particularly in the U.S., are headwinds for St. Jude in the near-term. This might force the company to lose market share to its competitors.
We downgrade the stock to an Underperform with a target price of $31.
Latest Posts on the Zacks Analyst Blog:
Consumer Credit Falling
Since the peak at the end of the third quarter of 2008, revolving debt has declined by 8.9% to $888.1 billion from 975.2 billion. On the other hand, non-revolving debt is down by just 0.5% to $1,594.8 billion over the same time period. In October, credit card debt fell by 0.77%, or at an annualized rate of 8.9%. Non-revolving debt on the other hand increased by 0.22% or an annualized rate of 2.7%. Auto loans are one of the big parts of non-revolving credit, and the pick up in auto sales has probably contributed to the increase in non-revolving credit.
Part of the reason for the difference is that the big credit-card issuers like American Express (AXP) and Capital One (COF) have been actively trying to cut their exposure to potential losses on bad debt by reducing credit limits and raising the minimum monthly payment.
Over the long term, that is a good thing for consumers, since consistently paying just the minimum on your credit card balances is a good way to sell yourself into debt slavery. However, it is probably painful for many right now. Those that have the ability to do so should pay off their balances as quickly as possible. Since credit card debt is not tax deductable, the money you save in interest costs avoided is the equivalent of earning a tax free return.
It is also risk-free. I know of no other tax and risk free investment that is yielding anything close to the 18% or more that many people pay on their card balances. Buying any stock or bond (outside your 401-k or IRA) while you have an outstanding credit card balance is, in a word, STUPID.
H&R Block Beats Estimates
H&R Block Inc.’s (HRB) second quarter (ended Oct. 31) results were two cents ahead of the Zacks Consensus Estimate. For the quarter, the company reported a net loss from continuing operations of 38 cents per share compared to the Zacks Consensus loss estimate of 40 cents. The company had reported a loss of 40 cents in the year-ago quarter.
Improved results in Tax Services and lower mortgage loan loss provisions were partially offset by reduced profits from Business Services. The company has also benefited from its cost containment initiatives. As a result of the seasonality in the business, the company usually reports a loss in the second quarter.
Consolidated net loss for the quarter, which includes results from discontinued operations, improved to $128.6 million or 38 cents per share compared to a loss of $135.9 million or 41 cents a share a year ago.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=5507.
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