Chicago, IL – September 14, 2009 – Zacks Equity Research highlights Tyco International (TYC) as the Bull of the Day and Valero (VLO) the Bear of the Day. In addition, Zacks Equity Research provides analysis on Textron (TXT), Outboard Marine (OM) and Walmart (WMT).

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 initiating coverage on Tyco International (TYC) shares with an Outperform rating and $36 target price.

The company's third-quarter results benefited from the improvement in key metrics like account growth, average revenue per user and the disconnect rate, which helped sustain recurring revenues.

Tyco is increasing capital expenditure on Research & Development at its two new centers in Shanghai and Bangalore, which are focused on developing products tailored to respective local markets. The company is aggressively pursuing its restructuring program and expects to realize tangible benefits in 2010.

Bear of the Day:

We reiterate our Underperform rating for Valero (VLO) shares as a combination of weak demand, excess production capacity and narrowing crude quality spreads are expected to weigh on near-term margins.

In addition to the near-term margin issues, commissioning of new refineries and extension projects indicate future struggle as global demand for almost all fuel products (except gasoline) is trending down.

The medium to long-term outlook also remains cloudy, with unfavorable regulatory changes (growing biofuel mandates) weighing on demand growth and limiting margin gains. Being the largest independent refiner, Valero remains particularly exposed to this unfavorable macro backdrop.

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Income, Poverty & Health Insurance

The long-term strength of the economy really is dependent on having a healthy and vibrant middle class. Median real household income is perhaps the best single measure of that. After all, what could be more middle than the point at which 50% of the households earn more than and 50% earn less than?

Yes the aggregate amount of income is important, but so is the distribution. If the economy grows by, say, $100 billion (a small increase in the context of a $14 trillion economy), but that is a result of 100 families each gaining a billion, and the other 99.999% of families seeing no increase, how much do you think demand will increase?

True, you would stimulate spending on yachts and private airplanes, but really -- how many jobs does that translate to? It’s nice for those 100 families, but from the perspective of the overall society, what is the point? It might be good for Textron (TXT) and Outboard Marine (OM), but they make up a very small segment of the overall market and economy. Recently, Carlos Slim of Mexico joined the ranks of the richest people in the world, but does that mean that Mexico is getting substantially more wealthy?

If, instead of that $100 billion increase going to 100 families it was split up with 10 million families each seeing an increase of $100, the money will be far more likely to be spent and put into circulation, and more jobs will be created. It would also result in more overall happiness. At the margin, how much more happiness does an extra $100 bring to a billionaire? How much more does it bring to a pauper?

From the perspective of the overall market, that widely dispersed $100 billion would stimulate sales at Walmart (WMT) and countless small private businesses. I know that the market generally does not care about poor people. If you don’t have money you can’t consume or invest.

But that is sort of the point, though -- if more and more people are in poverty, they will not be consuming or investing. The fact that the poverty rate has risen by 16.8% -- from 11.3% in 2000 to 13.2% in 2008 -- is hardly a sign of a robust economy.

Get the full analysis of all these stocks by going to http://at.zacks.com/?id=5507.

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 analyst 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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The company's third-quarter results benefited from the improvement in key metrics like account growth, average revenue per user and the disconnect rate, which helped sustain recurring revenues.

Tyco is increasing capital expenditure on Research & Development at its two new centers in Shanghai and Bangalore, which are focused on developing products tailored to respective local markets. The company is aggressively pursuing its restructuring program and expects to realize tangible benefits in 2010.Zacks Investment Research

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Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=4579.

Here are highlights from Monday's Analyst Blog:

Penske Automotive Buys Saturn

Penske Automotive (PAG) today announced that it will be purchasing the Saturn brand, including the rights to sell parts and cars through the Saturn dealerships.

There may be little cash involved, as no inventory is being transferred. The company also may outsource production to a lower-cost producer once an initial GM manufacturing period ends.

The keys to this deal are finding an Indian or Chinese producer to lower Saturn's costs, and also pushing more and varied product through the Saturn dealerships. Ultimately, this is a "dealership acquisition" by Penske. We think the deal will be successful and is well timed. Auto sales have bottomed and may be poised for a slow recovery.

U.S. Workforce's Changing Nature

Prolonged unemployment means that the long-term growth rates of sectors like retail are likely to be greatly diminished even after the recession is officially over. As such, even if firms like Macy's (M), Saks (SKS) and Nordstrom (JWN) are able to stay in the black through aggressive cost-cutting (and most have been doing a very good job of that, hence better-than-expected earnings), those earnings should get a lower multiple in the market. Also, jobs should be slow to return in retail.

The sectors that have been growing are the ones that are least susceptible to the twin forces of globalization and technology. However, technology and globalization are starting to impact even previously safe sectors through outsourcing.

Leisure and Hospitality is probably still safe, since it is hard to have a bartender in Bangalore pour you a drink when you are in Boston. The same is not true for Professional and Business Services. Those jobs are not going to follow Manufacturing right away, but they will not show the sort of growth seen in the last three upturns in the economy.

Euroseas Down But Still Afloat

In 2009's first quarter, Euroseas Ltd. (ESEA) posted diluted EPS before nonoperating items of $0.06, down 85% from the $0.43 earned in the prior-year period. This was above our estimate of a $0.05 loss per share, mainly due to lower-than-expected depreciation, the result of the sale of two vessels (adding $2.0 million to the bottom line), as well as a change in accounting for the useful lives of vessels (adding $1.6 million to net earnings).

We are raising our 2009 diluted EPS estimate to a loss of $0.06 per share from a loss of $0.28 per share, mainly to reflect the first quarter overage and a reduction in our estimates for depreciation expense. Our initial 2010 estimate is a $0.35 loss per share.

Going forward, we expect spot rates to continue at sharply lower levels, which will have a negative impact on revenues and earnings as part of the fleet is exposed to the spot market, and the renewal of expiring contracts is challenging. In fact, the company laid up three of its vessels in 2009's first quarter, rather than employ them at a loss.

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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.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=2677

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=4580.

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

Contact:
Mark Vickery
Web Content Editor
312-265-9380
Visit: www.zacks.com

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