For Immediate Release
Chicago, IL – December 17, 2009 – Zacks Equity Research highlights Stone Energy (SGY) as the Bull of the Day and Energy Conversion Devices (ENER) the Bear of the Day. In addition, Zacks Equity Research provides analysis on Equity Residential (EQR), Apartment Investors (AIV) and Ford (F).
Full analysis of all these stocks is available at http://at.zacks.com/?id=5506
Here is a synopsis of all five stocks:
We recommend an Outperform rating for Stone Energy (SGY) shares following strong third-quarter 2009 results. Stone has moved away from liquidity management in the first half of 2009 to a disciplined organic growth mode.
The Gulf of Mexico (GoM) shelf helped the company deliver a strong quarter, underpinned by both production growth and decreased cost. Last year’s acquisition of Bois d’Arc Energy, a pure-play GoM player, has increased Stone’s footprint in this region.
Our favorable view of the stock reflects the company’s improving balance sheet, positive production growth profile, decreasing cost and improved prospects for capital discipline.
Although we expect significant declines in both revenues and earnings in fiscal 2010 for Energy Conversion Devices (ENER), revenue should improve in 2011, assuming an improvement in overall economic conditions.
The company has announced a significant reduction in headcount. However, it is likely that the company will not be net free cash flow positive in the foreseeable future.
We have changed our recommendation to Underperform and dropped our price target to $10.00.
Latest Posts on the Zacks Analyst Blog:
CPI Up Moderately
Energy service prices have been much more tame, but still outpaced the overall rate of inflation in November by rising 1.4% on top of a 1.9% increase last month. On a year-over-year basis, though, they are still down 5.1%.
The core CPI is being held down by the cost of shelter, which declined 0.2% in November following two months of being unchanged, and it is up just 0.3% year over year. The two biggest components, owners equivalent rent (OER) and regular rent — which together comprise more than 30% of the overall CPI and almost 40% of the core CPI — were both down 0.1% on the month. Year-over-year OER is up 0.8% and regular rent is up 0.9%.
Given what some of the big apartment-oriented REITs like Equity Residential (EQR) and Apartment Investors (AIV) were saying when they reported their quarterly earnings, the rise in regular rent has probably been overstated over the last year. Look for both types of rent to continue to decline over the next several months.
The area that was showing the biggest increase in core CPI in November was cars. Used auto prices rose by 2.0% over the last month on top of 3.4% and 1.6% increases in October and September, respectively, and are up 5.8% from a year ago. New car prices are also on the rise, up 0.6% in November on top of a 1.6% increase in October.
Over the last year new car prices are up 4.9%. That increased pricing power is certainly a good thing for the likes of Ford (F).
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=5507.
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