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Zacks Bull and Bear of the Day Highlights: Allion Healthcare Inc., Embarq, EnCana, XTO Energy and Chesapeake – Press Releases

Zacks Market Commentaries (June 19th, 2009) Writes:
For Immediate Release

Chicago, IL - June 19, 2009 - Zacks Equity Research highlights Allion Healthcare Inc. (ALLI) as the Bull of the Day and Embarq (EQ) the Bear of the Day. In addition, Zacks Equity Research provides analysis on EnCana (ECA), XTO Energy (XTO) and Chesapeake (CHK).

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:

Allion Healthcare Inc. (ALLI) is a national provider of specialty pharmacy and disease management services focused on HIV/AIDS patients. The company recently reported better-than-expected 1Q09 net income of $3.5M, or EPS of $0.13, compared with net income of $1.1M and EPS of $0.06 in 1Q08.

Organic growth in 1Q09 of the company's core Specialty HIV was 9% y/y, with the aggregate

...

Embarq (EQ) – Bear of the Day

Zacks Market Commentaries (June 19th, 2009) Writes:
We maintain our Sell rating for Embarq (EQ), the fourth largest local telephone service provider in the U.S., as access line loss continues to erode traditional voice revenue, largely resulting in decreasing consolidated sales in the last quarter (below our expectations). Line losses have been accelerated with deactivations among business customers due to weak economic conditions.

EQ has received shareholder approval as well as the required state regulatory authorization for its consolidation with CenturyTel under an $11.6 billion merger deal (expected to close in 2Q 2009). We believe that the local phone business in North America, in particular service offered by regional carriers, has significant challenges ahead as consumers and business customers migrate to alternative solutions including VoIP, wireless and cable offerings.

Lower revenue forecasts for the second quarter of 2009 coupled with sustained access line losses support our thesis. We also believe pricing pressure and the need to invest

...

Sohu.com, CenturyTel, Citigroup, Bank of America and Morgan Stanley – Press Releases

Zacks Market Commentaries (May 6th, 2009) Writes:
For Immediate Release

Chicago, IL - May 6, 2009 - Zacks Equity Research picks Sierra Wireless (SOHU) as Bull of the Day and CenturyTel (CTL) as Bear of the Day. In addition, the analysts at Zacks Equity Research discuss the latest on Citigroup (C), Bank of America (BAC) and Morgan Stanley (MS).

Full analysis of all these stocks is available at: http://at.zacks.com/?id=2678

Bull of the Day

Sohu.com, Inc. (SOHU) is the second-largest Internet portal and one of the most well-known online brands in China. Sohu's pipeline for its new online games remains strong and is expected to drive meaningful growth in late 2009 and 2010.

The company spun-off part of its gaming division Changyou.com via an ADS offering, which is expected to increase its user base and help gain shares in the MMORPG (massively multi-player online role-playing game) market. We are also encouraged by the company's growing cash

...

CenturyTel (CTL) – Bear of the Day

Zacks Market Commentaries (May 6th, 2009) Writes:
We downgrade our rating to Sell for CenturyTel (CTL) based on valuation, after assessing the company's guidance for second quarter 2009 that was below our expectations. We also believe that the Embarq merger planned by CTL, scheduled to be completed in mid-2009, may be more challenging in terms of integration and deriving cost savings synergies.

Meaningful merger-related synergies are not likely before 2011, in our opinion, offering limited opportunity for near-term operational improvement. While we expect growth in broadband Internet to remain robust, the near-term outlook dictated by management's financial guidance is weak as declines in traditional voice and network access business offset gains in broadband Internet.

We also remain concerned with a highly-leveraged balance sheet that is likely to be further burdened with the assumption of approximately $5.7 billion in Embarq debt upon deal closure. Zacks Investment Research

Estee Lauder, Embarq, Saks, Nordstrom and Wal-Mart – Press Releases

Zacks Market Commentaries (April 14th, 2009) Writes:
For Immediate Release

Chicago, IL - April 14, 2009 - Zacks Equity Research picks Estee Lauder Companies (EL) as Bull of the Day and Embarq (EQ) as Bear of the Day. In addition, the analysts at Zacks Equity Research discuss the latest on Saks, Inc. (SKS), Nordstrom, Inc. (JWN) and Wal-Mart (WMT).

Full analysis of all these stocks is available at: http://at.zacks.com/?id=2678

Bull of the Day

Estee Lauder Companies (EL) is the pre-eminent global leader in prestige beauty. The company has strong brands, market presence, and growth potential demonstrated by over 60 years of uninterrupted sales growth.

Even though the slowdown in consumer spending in the U.S. is expected to drive a sales decline in fiscal 2009, management has embarked on a four-year strategic plan that will build on the company's core strengths, sharpen execution capabilities and lower the cost base though fiscal 2013.

With the stock trading at

...

Embarq (EQ) – Bear of the Day

Zacks Market Commentaries (April 14th, 2009) Writes:
We maintain our Sell rating for Embarq (EQ), the fourth largest local telephone service provider in the U.S., as access line loss continues to erode traditional voice revenue, largely resulting in decreasing consolidated sales for full-year 2008. The company has received shareholder approval for its consolidation with CenturyTel under an $11.6 billion merger deal (expected to close in 2Q 2009).

Lower revenue forecasts for the first-half of 2009, acceleration of access line loss, and weakening CTL valuation levels support our thesis. We believe that the local phone business in North America, in particular service offered by regional carriers, has significant challenges ahead as consumers and business customers migrate to alternative solutions including VoIP, wireless and cable offerings.

We also believe pricing pressure and the need to invest further in broadband infrastructure may strain balance sheet conditions. Zacks Investment Research

Telecom Industry – Zacks Analyst Interviews

Zacks Market Commentaries (December 1st, 2008) Writes:
Dismal economic events have culminated in drastic declines of market valuation among companies in nearly every industry/sector, including impacts to telecom industry performance. Capital spending constraints among carriers, and limited funds available to sustain (grow) telecom services over the next six- to twelve-months, may be outcomes of credit markets remaining restricted and overall GDP growth remaining tepid or even retracting. Telecom carriers often resort to credit markets for funding capital projects, while telecom equipment companies conventionally use equity share offerings in lieu of debt instruments. The outcome has been a disappointment, regardless of the selected financing mechanism.

As a result of weakening macroeconomic indicators, telecom carriers' capital expenditures remain limited in 2008 and early 2009. There has been more selectivity on technology choices and leveraging cost-savings synergies, such as streamlining purchasing arrangements and reducing the number of preferred vendors. Shareholders continue to foster an environment where executives are

...

CenturyTel’s Buyout Bid for Embarq Will Likely Jump-Start a Wave of Mergers Among Rural Telecom Players

William Patalon (October 28th, 2008) Writes:
CenturyTel Inc. (CTL) will acquire rival Embarq Corp. (EQ) in an $11.6 billion deal that could kick-start a flurry of mergers among rural-regional telephone carriers. The deal should be good for the two companies, said Jeff Kagan, an independent analyst who is well known for his coverage of the telecom sector. “There has been a lot of talk recently about Embarq wanting to be acquired,” Kagan told MarketWatch.com. “However, the financial crisis that is on the front page every day made finding a partner difficult. That may have lowered the price Embarq hoped to get. CenturyTel saw an opportunity and jumped in to acquire Embarq. Timing was on CenturyTel’s side in this deal.” The all-stock deal – announced yesterday (Monday) – calls for CenturyTel to pay $5.8 billion for Embarq, and to assume $5.8 billion of that company’s debt, Network ...
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Lack of Competition in Telecom

William A. Trent (August 21st, 2007) Writes:

After the 1996 Telecom Act, the pricing environment for voice calls – particularly for landline phones, got ugly. Between wireless substitution, competition from cable and competition from other sources such as Skype, the price to make a voice call kept dropping. Until recently.


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