CHICAGO, March 25, 2011 /PRNewswire/ -- Zacks Equity
Research highlights: Superior Industries (NYSE: SUP) as the
Bull of the Day and Novatel Wireless (Nasdaq: NVTL) as the
Bear of the Day. In addition, Zacks Equity Research provides
analysis Verizon Communications Inc. (NYSE: VZ),
Terremark Worldwide Inc. (Nasdaq: TMRK) and AT&T
Inc. (NYSE: T).
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Full analysis of all these stocks is available at
http://at.zacks.com/?id=2678.
Here is a synopsis of all five stocks:
Bull of the Day:
Superior Industries (NYSE: SUP) has a wide customer base.
Moreover, its long-term business agreements with clients have
helped maintain financial stability. With its competent management,
strategic acquisitions, divestments and production efficiencies,
the company is well positioned to take full advantage of the
globally expanding automotive industry.
In addition, Superior Industries has no long-term debt
obligations. Its fourth quarter results were strong, with earnings
outperforming the Zacks Consensus Estimate by $0.45 per share.
Given these conditions, we have maintained our Outperform
recommendation on shares of the company and set a target price of
$29.
Bear of the Day:
We reaffirm our long-term Underperform recommendation on
Novatel Wireless (Nasdaq: NVTL) following its fourth quarter
2010 financial results, which fell well below the Zacks Consensus
Estimate. Novatel provided a very weak first quarter 2011 financial
outlook.
The company cited lower sales of its 3G products and ongoing
customer transition to next-generation 4G products are the primary
reasons for this poor guidance. The recent trend of the 3G USB
modem industry is indicating a glut of inventory on the part of the
wireless carriers. Several industry sources predicted that Verizon,
an important customer of Novatel for its MiFi intelligent hotspot,
may generate lukewarm demand in the first quarter of 2011
attributable to its huge modem inventory.
Novatel is now facing increasing competitive pressure from Asian
equipment developers. We do not find any immediate catalyst for
Novatel and expects the company to continue to lose money in
2011.
Latest Posts on the Zacks Analyst Blog:
Verizon Issues Debt
For now, still the largest wireless carrier in the North America, Verizon Communications
Inc. (NYSE: VZ), announced a debt issuance of
$6.25 billion. The issue will spread
over five tranches of $1 billion
three-year floating-rate notes, $1.5
billion three-year fixed-rate notes, $1.25 billion five-year fixed-rate bonds,
$1.5 billion 10-year fixed-rate bonds
and $1 billion of 30-year fixed-rate
debt.
Verizon's debt sale represents its first debt sale since 2009
(issued $2.75 billion of 10 and 30
year debts in March 2009) and the
second largest deal after the second-largest dollar-denominated
debt sale in 2011.
The company expects to use the proceeds out of the issue to pay
commercial paper debt as well as for general corporate purposes.
Currently, the company has $3.7
billion of commercial paper outstanding, bearing interest at
an average rate of 0.40%. Further, Verizon expects to sell up to
$14 billion in common stock,
preferred shares and debt.
Verizon exhibits a strong balance sheet with $2 billion in cash and a reduced long-term debt
of $45.3 billion from 46.1 billion in
2009. Currently, the company has net debt-to-EBITDA ratio of about
1.3 times.
Given the strong financial position, Verizon is further
set to acquire information-technology and cloud-computing
specialist Terremark Worldwide Inc. (Nasdaq: TMRK) for
$1.4 billion as reported in January
and expects the deal to be completed by month end. Given the on
going acquisition, the company has positioned itself for growth in
cloud services.
The acquisition represents Verizon's enthusiasm to rapidly enter
the cloud computing market that delivers corporate IT services over
the Internet rather than an in-house IT department. The deal is
expected to support Verizon's growth initiatives in remote or
cloud computing, an area in which it has been lagging competitors
like AT&T Inc. (NYSE: T).
Currently, we maintain long-term Neutral recommendation on
Verizon with a Zacks #3 Rank (Hold
Get the full analysis of all these stocks by going to
http://at.zacks.com/?id=2649.
About the Bull and Bear of the Day
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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Updated throughout every trading day, the Analyst Blog provides
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events impacting stocks and the financial markets.
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