For Immediate Release
Chicago, IL – December 16, 2009 – Zacks Equity Research highlights ZOLL Medical Corporation (ZOLL) as the Bull of the Day and Greatbatch (GB) the Bear of the Day. In addition, Zacks Equity Research provides analysis on Exxon (XOM), XTO Energy (XTO) and Chesapeake (CHK).
Full analysis of all these stocks is available at http://at.zacks.com/?id=5506
Here is a synopsis of all five stocks:
ZOLL Medical Corporation (ZOLL) reported fourth quarter earnings of 16 cents per share, beating the Zacks Consensus Estimate of 8 cents. The company earned 41 cents per share in the year-ago quarter.
For fiscal 2009, the company earned 45 cents per share, which also exceeded the Zacks Consensus Estimate by 8 cents but was well below the year-ago earnings of $1.10. We are pleased with the company’s wide range of products and significant international presence.
ZOLL has made multiple acquisitions in the past which have aided growth, and the company is looking for more such opportunities. Consequently, we upgrade the stock to Outperform with a target of $31.
The flurry of acquisition activities in the past few years have expanded Greatbatch’s (GB) customer base, particularly in orthopedics, and moved its product portfolio into higher growth segments. The company’s move into areas beyond original equipment manufacturing should increase future operating margins.
However, the company reported disappointing third quarter fiscal 2009 results. Earnings per share were 32 cents, considerably lower than the Zacks Consensus Estimate of 38 cents and the year-ago earnings of 43 cents. The company also witnessed erosion in its top-line.
In light of its disappointing performance, we downgrade the stock to Underperform with a target price of $17.
Latest Posts on the Zacks Analyst Blog:
Capacity Utilization Rises
Utilization up the production chain is doing much better than downstream. Utilization of finished goods was just 70.0%, up from 69.4% last month, but is down from 71.2% a year ago and a long term average of 77.7%. Production of crude goods was 85.2%, up sharply from 83.4% in October and actually above the year-ago level of 84.7%. It too has been aided by a 1.2% shrinkage in total capacity.
Still, we are not that far off the long-term average utilization rate of 86.6%. Curiously, the step in the middle — semi finished goods capacity utilization — is actually well below that of either crude of finished goods at 67.8%, up from 67.4% last month, but down from 73.5% a year ago and well off its long-term average of 82.0%.
The much higher utilization rates for crude goods could indicate that we are exporting much more in the way of crude goods, which is not a good long-term sign. We would generally prefer to do the later, higher-value-added stages of production than just producing the raw materials.
The increase in mining activity was primarily in oil and gas production (and related oil field services that are lumped in with mining). This reflects the growing amount of unconventional natural gas coming from the shale plays. As Exxon’s (XOM) purchase yesterday of XTO Energy (XTO) indicates this is a very significant and important development for our long-term energy future. There are many other firms that are active in those shale plays that will benefit, such as Chesapeake (CHK).
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=5507.
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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.
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