http://www.zacks.com/
CHICAGO--(Business Wire)--
Zacks Equity Research highlights American Physicians Service Group (Nasdaq:
AMPH) as the Bull of the Day and AGCO Corp. (NYSE: AGCO) the Bear of the Day. In
addition, Zacks Equity Research provides analysis on Freddie Mac (NYSE: FRE),
Fannie Mae (NYSE: FNM) and Microsoft Corporation (Nasdaq: MSFT).
Full analysis of all these stocks is available at http://at.zacks.com/?id=2676.
Here is a synopsis of all five stocks:
Bull of the Day:
We are upgrading our recommendation on American Physicians Service Group
(Nasdaq: AMPH) from Neutral to Outperform. American Physicians second quarter
operating earnings of 82 cents per share were significantly ahead of the Zacks
Consensus Estimate of 66 cents.
Results were driven by better-than-expected results in the Financial Service
segment, strong policyholder retention and favorable developments from prior
years. The company is also experiencing the benefits of the implementation of
its cost containment measures.
Though declining rate continued to partially offset growth, policyholder
retention, conservative reserve position and capital position augur well for a
solid growth path with the market recovery.
Bear of the Day:
We are downgrading our rating on AGCO Corp. (NYSE: AGCO) from Neutral to
Underperform. The company is witnessing soft demand conditions in most of its
markets due to the significant slowdown in the global economy.
The near-term outlook for agricultural equipment is extremely uncertain,
especially in Europe, which represents a major portion of the company's total
revenue. Given the continued slowdown in the global economy, tighter credit
markets and unfavorable foreign currency exchange rates, AGCO expects 2009
revenue to decline 20 23% from $8.4 billion in 2008.
Also, the company forecasts 2009 EPS in the range of $1.30 $1.50, compared to
$4.09 in 2008 due to weak sales and lower margins.
Latest Posts on the Zacks Analyst Blog:
Used Home Sales Soar
While the official inventories are down, I am still concerned about the "shadow
inventory" out there. Banks have been slow to foreclose, in part due to
political pressures, but also because if they do so, then they are going to have
to book the loss. Instead, they are trying to modify the mortgages through the
HAMP program, which allows them to "extend and pretend" that the mortgages are
still performing just fine.
In the meantime, more and more people are falling behind on their mortgage
payments. In a separate report, Freddie Mac (NYSE: FRE) reported that
delinquencies jumped to 3.33 percent of its book of business in September from
3.13 percent in August and 1.22 percent in September 2008. Those are not just
one payment late, but delinquencies of 90 days or more.
The rise in delinquencies has been relentless and shows no signs of slowing. One
of four things has to happen. Either all these folks who are behind on their
mortgages will have to:
1) Come up with the cash to back to current
2) The mortgage must be modified in a way that people can afford the house,
resulting in a big hit to the value of the mortgage to the bank by either
cutting the interest rate and or principal on the mortgage
3) The banks and ultimately Freddie -- and Fannie Mae (NYSE: FNM) -- will just
have to let people continue to live rent- and mortgage-payment-free indefinitely
4) Or there will have to be another wave of foreclosures.
Microsoft Beats, Results Down
Microsoft Corporation (Nasdaq: MSFT) reported first quarter 2010 earnings that
beat the Zacks Consensus Estimate by 8 cents. Revenue beat the consensus by
4.9%.
Revenue of $12.9 billion was down 1.4% sequentially and 14.2% year over year.
This excludes $1.47 billion in deferred revenue related to the Windows 7 Upgrade
Option as well as initial sales of Windows 7 to OEMs and retailers. Consumer
demand drove increases in Windows and Xbox products, but this was offset by
sluggish business spending. Foreign exchange had a $233 million impact on
revenue in the last quarter.
Approximately 35% of total revenue came from annuity, 30% from OEM, 25% from
licenses and 10% from other business. Management estimates that the PC market
was up mid-teens from the Jun 2009 quarter, with approximately 12% of the total
market consisting of net books.
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.
About the Analyst Blog
Updated throughout every trading day, the Analyst Blog provides analysis from
Zacks Equity Research about the latest news and events impacting stocks and the
financial markets.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis
to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks.
Our analysts are organized by industry which gives them keen insights to
developments that affect company profits and stock performance. Recommendations
and target prices are six-month time horizons.
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Zacks.com
Mark Vickery
312-265-9380
Visit: www.zacks.com
Copyright Business Wire 2009
