Zacks Analyst Blog Highlights: NuStar Energy, L.P., Telefonica S.A., Kinder Morgan Energy Partners, L.P., Highwoods Properties and Semiconductor Manufacturing International Corp.
CHICAGO--(Business Wire)--
Zacks.com announces the list of stocks featured in the Analyst
Blog. Every day the Zacks Equity Research analysts discuss the latest
news and events impacting stocks and the financial markets. Stocks
recently featured in the blog include: NuStar Energy, L.P. (NYSE: NS),
Telefonica S.A. (NYSE: TEF), Kinder Morgan Energy Partners, L.P.
(NYSE: KMP), Highwoods Properties (NYSE: HIW) and Semiconductor
Manufacturing International Corp (NYSE: SMI).
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Here are highlights from Wednesday's Analyst Blog:
Ahead of Earnings, Buy NuStar
We are maintaining our Buy recommendation and earnings estimates
for NuStar Energy, L.P. (NYSE: NS) units ahead of the partnership's
second-quarter results. We continue to like the partnership for its
diversified asset base, strong distribution-growth prospects and
attractive valuation.
The inclusion of the asphalt business in the asset mix further
adds to the partnership's diversification and growth prospects. A
strong pipeline of organic growth projects and contribution from
acquisitions provide the partnership with an above peer group average
distribution coverage ratio. We estimate that the partnership can
sustain distribution-growth in the 8%-9% annual range over the next
few years.
Telefonica Strength Accounted For
We maintain our Hold rating for Telefonica S.A. (NYSE: TEF), the
largest telecommunications company in Spain and Latin America. The
company has been delivering strong quarterly results with improvements
driven by strong performance in European and Latin American regions
and healthy business momentum across wireless, broadband and Pay TV
operating segments.
The company continues to generate strong free cash flow and offers
a respectable dividend payout. However, the environment remains
challenging with strong competition and we are exercising caution
about the company's aggressive acquisition strategy, along with the
integration process following such initiatives. Furthermore, there is
the need to consider the currency exchange rate, which is associated
with the Euro versus U.S.D as the dollar may be reaching its lower
inflection point.
Hold Kinder Morgan Pre-Earnings
We are maintaining our Hold recommendation on Kinder Morgan Energy
Partners, L.P. (NYSE: KMP) units ahead of the partnership's quarterly
results. Strength across all of its business lines drove the first
quarter. Importantly, it also announced a 16% year-over-year increase
in quarterly distribution to the annualized run rate of $3.84 per
unit.
Looking forward, with over $3 billion of organic projects
beginning to come online over the next few years, we see favorable
long-term growth profile for KMP. However, we believe these positives
are already reflected in its premium valuation relative to the peer
group and do not foresee much upside from current levels.
Downgrading Highwoods to Hold
Highwoods Properties (NYSE: HIW) is a fully integrated,
self-administered real estate investment trust (REIT) that owns or has
management interests in office, industrial, retail and service center
properties, including development projects and apartment units.
The company's core FFO (funds from operations) increased 17% in
1Q08 vs. 1Q07. Operations are holding steady as occupancy and rents
are slowly rising in many of the company's markets. The company
continues to focus on higher yielding development which will drive
long-term NAV (net asset value) growth.
Chinese Semi SMI Fairly Priced
Semiconductor Manufacturing International Corp. (NYSE: SMI) is a
Chinese semiconductor foundry company with multiple integrated chip
wafer fabrication plants. March quarter top and bottom-line missed the
consensus estimates.
The company is receiving very favorable tax treatment from the
Chinese government, along with other incentives to boost investment.
Looking at other fab's product mix, it would appear SMI is
well-positioned for further growth.
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