For Immediate Release
Chicago, IL –August 20, 2010 – Zacks Equity Research highlights: Nile Therapeutics, Inc. (NLTX) as the Bull of the Day and Lowe’s Companies, Inc. (LOW) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Bank of America Corporation (BAC), Morgan Stanley (MS) and Citigroup Inc. (C).
Here is a synopsis of all five stocks:
Nile Therapeutics, Inc. (NLTX) is developing CD-NP, a chimeric natriuretic peptide currently in phase II clinical studies for the treatment of acute decompensated heart failure (ADHF). Prior phase I and phase II data so far has been highly encouraging. With a market capitalization of only $14 million, Nile Therapeutics shares are bafflingly under-valued.
We believe with positive data from the ongoing phase II program in hand the company is worth at least $80 to 100 million. Taking the mid-range at $90 million, and then backing out the $20 million most likely required to fund the phase IIb program, we arrive at a value of $70 million for Nile Therapeutics. This equates to a price of $2.00 per share.
Lowe’s Companies, Inc. (LOW) recently posted lower-than-expected second quarter 2010 results. The quarterly earnings of $0.58 per share missed the Zacks Consensus Estimate by a penny.
The company also witnessed a decline in the rate of growth of sales and comps in the quarter that breached its planned outlook. As a result, the company lowered its fiscal 2010 sales guidance.
Although the economy is showing signs of revival, we believe that spending on big remodeling projects will likely remain under pressure until the housing market stabilizes, inventory levels normalize and consumer-spending rebounds.
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Merrill Lynch Fined by FINRA
On Wednesday, Merrill Lynch, a part of Bank of America Corporation (BAC), was charged $0.5 million by the Financial Industry Regulatory Authority (FINRA) for failing to provide sales charge discounts to its customers who had purchased unit investment trusts (UITs).
Merrill Lynch will have to pay $2 million as compensation to customers who did not get the discounts from January 2006 till date. Bank of America had acquired Merrill Lynch in 2009, following the financial crisis.
The sponsors of UITs usually provide discounts for bulk purchase of the units; the discounts increase with the volume of units bought. Also, investors receive additional discounts if they convert the proceeds from one UIT into buying another.
In its allegation, FINRA has accused that Merrill Lynch had failed to give any guidance on the discounts to the brokers till May 2008, though the regulations had been issued in early 2004. It did not have a proper system that can track whether the investors received the discounts or not. This led to an increase in investment cost for the investors.
Merrill Lynch has agreed to settle the matter by paying the fine and compensation without either admitting or denying the charges.
Adding to the woes of investment bankers is the financial reform Act signed by President Obama in July 2010, which is expected to further tighten the regulatory standards to ensure consumer protection. Big commercial banks including Bank of America, Morgan Stanley (MS) and Citigroup Inc. (C) will all be hurt. Moreover, the rating agencies that had previously rated many of the problem securities of these investment giants as worthy of being marketable will now be under greater pressure to provide better transparency to investors.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=5507.
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BANK OF AMER CP (BAC): Free Stock Analysis Report
CITIGROUP INC (C): Free Stock Analysis Report
LOWES COS (LOW): Free Stock Analysis Report
MORGAN STANLEY (MS): Free Stock Analysis Report
NILE THERAPEUTC (NLTX): Free Stock Analysis Report
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