For Immediate Release
Chicago, IL – August 25, 2009 – Zacks Equity Research highlights Transcept Pharmaceuticals (TSPT) as the Bull of the Day and Nabors Industries (NBR) the Bear of the Day. In addition, Zacks Equity Research provides analysis on Guaranty Financial Group Inc. (GFG), Banco Bilbao Vizcaya Argentaria (BBVA) and BB&T Corporation (BBT).
Full analysis of all these stocks is available at http://at.zacks.com/?id=2676
Here is a synopsis of all five stocks:
We recently initiated coverage of Transcept Pharmaceuticals (TSPT) with an Outperform rating and $12 price target. We think Intermezzo is a product that can fill a much needed void for insomnia patients with chronic nocturnal awakenings.
An FDA decision on the pending new drug application is expected in late October 2009. We think approval is a high likelihood event at that time.
With the commercialization partner signed and the financial position solid (estimated $95 million on hand), the stock is significantly under-valued, in our view.
Nabors Industries (NBR) second-quarter earnings of 32 cents per share topped the Zacks Consensus Estimate of 28 cents, buoyed by stronger margins associated with new rig deployments in its international operations and solid performance from the Alaska sub-segment.
However, results were significantly below year-earlier levels, reflecting a sustained slowdown in North American activity levels. We remain concerned about the North American land drilling scene and its impact on Nabors, the largest onshore driller.
This, coupled with the company’s relatively weak balance sheet in an environment of continued credit market turmoil, accounts for our Underperform recommendation.
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2nd Largest Bank Failure in ‘09
U.S. regulators on Friday shuttered more four banks, including Guaranty. The shutdown of Guaranty, a unit of Guaranty Financial Group Inc. (GFG), is the second-largest U.S. bank failure this year after Colonial, and the 10th-largest in U.S. history. This takes the total number of failed federally insured banks this year to 81, compared to 25 in 2008 and 3 in 2007.
Texas-based lender Guaranty had assets of about $13 billion and deposits of $12 billion. Souring losses on loans to homebuilders and mortgage-backed securities were the primary reasons which caused Guaranty to fail. GFG affirmed last Monday in a regulatory filing that the company was critically short of capital and didn’t believe it could stay in business. Finally, Guaranty joined the list of the 12 biggest U.S. bank failures of all time.
Guaranty had been trying to raise fresh capital with the help of the Federal Deposit Insurance Corporation (FDIC) and the Office of Thrift Supervision, but the souring losses have muddied its plans.
The three other banks were ebank, with $143 million in assets and $130 million in deposits; First Coweta, with $167 million in assets and $155 million in deposits; and CapitalSouth Bank, with $617 million in assets and $546 million in deposits.
Failure of these banks represents another sizable hit to the FDIC’s fund for protecting customer accounts, as the FDIC has been appointed receiver of these banks. Guaranty alone is expected to cost the deposit insurance fund about $3 billion. Cost to the insurance fund is expected to be about $63 million for ebank, $48 million for First Coweta and $151 million for CapitalSouth.
In the first quarter of 2009, the number of banks on the FDIC’s list of problem institutions jumped to 305. This is the highest number since the savings and loan crisis in 1994. The FDIC anticipates U.S. bank failures to cost $70 billion through 2013.
The FDIC sold all of Guaranty’s deposits and $12 billion of the assets to BBVA Compass. BBVA Compass is the U.S. division of Spain’s second-largest bank Banco Bilbao Vizcaya Argentaria (BBVA). The FDIC will share losses on Guaranty’s $11 billion assets with BBVA. The acquisition allows BBVA to expand its operation in the U.S. market. The acquisition was desirable for BBVA as it tries to extend its reach into the Spanish-speaking market of the U.S.
BBVA Compass has 600 branches from Florida to California. The takeover of Guaranty Bank, with 162 branches in Texas and California, will create the 15th-largest commercial bank in the U.S. with about $49 billion in deposits.
Earlier this month, Colonial BancGroup was seized by the FDIC. It is the biggest bank failure so far this year, and the sixth-largest in U.S. history. Colonial’s $20 billion in deposits, 346 branches and about $22 billion of assets were sold to BB&T Corporation (BBT). Guaranty was about half the size of Colonial Bank.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=5507.
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