Highlighted stocks include Monro Muffler Brake Inc. (MNRO), Sanofi-Aventis SA (SNY), Delek US Holdings, Inc. (DK), and Ultrapetrol Bahamas Limited (ULTR).

Monro Muffler Brake Inc. (MNRO) raised full-year 2009 guidance on Mar 24 and provided a first look at fiscal 2010 which projects same store sales growth in the range of 4% to 7%.

Since the guidance news, the stock has been on a tear, recently hitting new 52-week highs.

Monro Muffler specializes in undercar repair and tire services at stores under the names Monro Muffler Brake and Service, Mr. Tire and Tread Quarters Discount Tires. It operates 711 stores and has 14 dealer locations in 18 mid-eastern states.

2009 Guidance and Fourth Quarter Forecast Raised

Bucking the economic trends, Monro Muffler had a good fourth quarter as same store sales rose about 10%. The company raised fourth quarter guidance to the range of 12 cents to 15 cents, up from the previous guidance of 9 cents to 14 cents.

Fiscal 2009 guidance was therefore also raised to the range of $1.17 to $1.20, up from $1.14 to $1.19. The company made $1.00 per share in fiscal 2008.

Monro forecasts fiscal 2010 earnings in the range of $1.30 to $1.45. The estimate includes expected gross margin improvement due to declining oil and tire costs.

“As we move toward the next fiscal year, we remain cautiously optimistic, despite macro factors, and expect continued positive momentum and improved operating leverage driven by strong comparable store sales growth and margin expansion,” said Robert G. Gross, Chairman and CEO.

Value Fundamentals

Monro is now a Zacks #2 rank (buy) stock. It is slightly more expensive than when we last reviewed it on Nov 21, 2008 due to the run-up in the share price. The stock is now trading with a forward P/E of 16.21 compared to 13.2x earnings back in November.

Its price-to-book ratio is still within value parameters at 2.62. The company has a solid 1-year return on equity (ROE) of 12.73%. It also pays a dividend with a current yield of 0.90%.

Read the Nov 21, 2008 analysis.

Update to Previous Value Zacks Rank Buy Stocks

Sanofi-Aventis SA (SNY), the large French drug company, has seen its stock zigzag in 2009 as the big pharma sector is experiencing mergers and acquisitions. SNY is a good value play, trading at only 6.8x forward earnings. Read the Apr 7 analysis.

Delek US Holdings, Inc. (DK), an independent refiner, is bullish about 2009 even as the energy market remains volatile. DK has a PEG ratio of 0.95. Read the Apr 8 analysis.

Ultrapetrol Bahamas Limited (ULTR), the South American focused shipper, reported a record 2008 as its river transportation business continued to grow. The company has surprised on estimates 4 quarters in a row by an average of 77.04%. Read the Apr 9 analysis.

Zacks Investment Research

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