Chicago, IL – December 14, 2009 – 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: Panasonic Corp. (PC), SANYO Electric Co Ltd. (SANYY), Sony (SNE), Hitachi (HIT) and Health Net (HNT).

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Here are highlights from Friday’s Analyst Blog:

Panasonic Takes Over Sanyo

Panasonic Corp. (PC) announced the acquisition of SANYO Electric Co Ltd. (SANYY), which will bring greater expertise in two areas – batteries and solar panels. Sanyo is a leading company in the rechargeable battery business focused on lithium-ion rechargeable batteries. Panasonic is one of the leading manufacturers of electronic and electrical products, systems and components.

Panasonic said that it has completed the tender offer to acquire approximately 3.1 billion shares of SANYO (or more than 50% of the company’s total shares) for approximately $4.6 billion (403.8 billion yen). The tender offer was planned for Nov 5 through Dec 9 at a price of 131 yen per share. Panasonic will have 50.2% stake in Sanyo.

Panasonic had entered into a capital and business alliance agreement with SANYO in Dec 2008, which could not come into effect due to various regulatory hurdles from anti-monopoly authorities in the U.S., China and the European Union. The tender offer is expected to impact Panasonic’s business results for the fiscal year ending Mar 2010.

The energy business of SANYO will be added as Energy Solutions to Panasonic’s business, which will further expand its HIT (crystalline silicon) solar photovoltaic cells and modules (batteries) business and accelerate the development and commercialization of next-generation solar cells.

By taking over SANYO, Panasonic plans to double production capacity of lithium ion batteries to around 1 million units a year by the middle of 2010. Panasonic expects the alliance to result in a net profit growth of 80 billion yen in fiscal 2013. Panasonic and SANYO will also set up a ‘Collaboration Committee’, in which Panasonic will invest around 100 billion yen to generate synergies for both companies.

This acquisition will enable Panasonic to more aggressively compete with market leaders such as Sony (SNE) and Hitachi (HIT) amid growing demand for the rechargeable power source commonly used in mobile phones, laptop PCs and digital cameras. Moreover, it will help Panasonic become Japan’s largest maker of hybrid car batteries.

Health Net on a High

Health Net (HNT) provided a strong outlook for 2010. The company expects earnings per share in the range of $2.30 to $2.40, higher than ours as well as the Street’s expectations. The guidance is based on the expectation that the pending sale of its Northeast businesses will close before year-end 2009.

Following the better than expected earnings guidance for next year, Health Net’s shares touched a 52-week high of $23.79. Based on a flat membership growth compared to 2009, Health Net expects revenues in the range of $13- $13.5 billion.

We are pleased with the strong guidance, especially in a situation when high medical costs have forced Health Net to lower its 2009 outlook post third quarter results. The company now expects 2009 earnings per share in the range of $2.25 − $2.30 compared to the earlier guidance of $2.25 − $2.35. Although we were disappointed, we believe the current environment has forced the company to lower its outlook − higher costs related to the spread of H1N1 virus and expansion of COBRA (Consolidated Omnibus Budget Reconciliation Act of 1985) membership by laid-off workers. Under COBRA, people can continue their employer sponsored insurance coverage even after they lose their jobs.

In addition to providing a strong outlook for 2010, Health Net announced the resumption of the stock repurchase program. The company used to follow a liberal policy of repurchasing shares to enhance shareholder value. Health Net has a $700 million stock repurchase program authorized by the Board of Directors.

At the end of the third quarter of 2009, about $103.3 million of stock repurchase authorization remained. The company had decided to put this program on hold in Nov 2008 due to the uncertain financial environment. We had earlier expected that a recovery in the economic scenario will make Health Net withdraw its decision.

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We are pleased with the strong guidance, especially in a situation when high medical costs have forced Health Net to lower its 2009 outlook post third quarter results. The company now expects 2009 earnings per share in the range of $2.25 − $2.30 compared to the earlier guidance of $2.25 − $2.35. Although we were disappointed, we believe the current environment has forced the company to lower its outlook − higher costs related to the spread of H1N1 virus and expansion of COBRA (Consolidated Omnibus Budget Reconciliation Act of 1985) membership by laid-off workers. Under COBRA, people can continue their employer sponsored insurance coverage even after they lose their jobs.

In addition to providing a strong outlook for 2010, Health Net announced the resumption of the stock repurchase program. The company used to follow a liberal policy of repurchasing shares to enhance shareholder value. Health Net has a $700 million stock repurchase program authorized by the Board of Directors. At the end of the third quarter of 2009, about $103.3 million of stock repurchase authorization remained. The company had decided to put this program on hold in Nov 2008 due to the uncertain financial environment. We had earlier expected that a recovery in the economic scenario will make Health Net withdraw its decision.

Health care companies such as Health Net, Aetna (AET), UnitedHealth (UNH) and WellPoint (WLP) are currently facing several headwinds – rising unemployment, uncertainty related to healthcare reform and increasing cost pressure among others. These companies are also worried about a provision requiring them to fix their medical-loss ratios at 90%. This means companies will have to shell out 90% of their premium income on medical benefits for policyholders. Higher ratios will hurt profitability.

Health plan services premium, accounting for approximately 80% of total revenues during the quarter increased 3% year over year to $3.17 million. While revenues from government contracts increased 4.7% to $758 million, sequentially, it came down by 8.8%. We believe revenues from government contracts will decline further with the loss of contract in July with the Department of Defense awarding Aetna (AET) the $2.8 billion managed care contract to provide services for the northern region of the department's TRICARE program, replacing Health Net. However, Health Net protested against this move to the US Government Accounting Office; a final decision is yet to be taken.

In July, Health Net entered into an agreement with UnitedHealth Group (UNH) under which UnitedHealth acquired the northeast commercial operations of Health Net for about $510 million. We believe this decision was taken so that Health Net could concentrate on its core western markets.

At the end of the reported quarter, total health plan and total commercial risk enrollment were 3.6 million members, a decline of 3.8% and 166, 000 members, a decline of 8%, respectively compared with the year ago period. Apart from Medicaid enrollment, which increased 13.5% compared to the third quarter of 2008, enrollment in Medicare Advantage plan and Medicare PDP plans declined by 2.4% and 13.4%, respectively. The rise in Medicaid enrollment was the result of economic downturn, which causes the Medicaid-eligible population to increase.

Medical care ratio (MCR), calculating the amount paid in claims compared to premiums received for Health Net’s health plan services, declined to 86.4% during the quarter compared to 87.5% in the year ago period.

In addition to posting quarterly results, Health Net revised its outlook for 2009. The company now expects earnings per share at the lower end of its prior guidance, at $2.25 - $2.30 compared to the earlier guidance of $2.25 - $2.35. We believe higher costs related to the spread of H1N1 virus and expansion of COBRA (Consolidated Omnibus Budget Reconciliation Act of 1985) membership by laid-off workers made the company lower its outlook. Under COBRA, people can continue their employer sponsored insurance coverage even after they lose their jobs.

Fourth-quarter earnings for the S&P 500 are projected to rise just 3.3%.

On a company-specific basis, the numbers look far worse. More than 275 S&P 500 members are forecast to report a year-over-year drop in per share earnings.

Growth Industries

Refiners, such as Sunoco, Inc. (SUN), will have among the highest growth rates. Plunging oil prices led to an improved crack spread, which allowed these companies to enjoy widened margins. (Lower demand due to economic conditions will cause profits to drop in 2009, however.)

SUN is a Zacks #2 Rank ("buy") stock classified in Oil Refining & Marketing. The favorable Zacks Rank reflects the fact that fourth-quarter estimates have been revised upwards.

Staying on the energy front, coal producers CONSOL Energy, Inc. (CNX) and Massey Energy Company (MEE) should also report strong growth. Though coal prices have dropped significantly since June, much of the 2008 production had already been contracted out. This enabled these companies to enjoy higher prices, relative to the spot market and relative to 2007. (Both companies are also expected to show strong growth in 2009.)

CNX and MEE are Zacks #3 Rank ("hold") stocks classified in Coal.

High demand for coal also played a role in maintaining earnings momentum for rail companies. As discussed previously in this column, rail companies' reliance on coal and agricultural products has helped to offset some of the weakness caused by the automotive and housing sectors. In addition, they have taken market share away from trucking companies and their

Burlington Northern Santa Fe Corporation (BNI), Union Pacific Corporation (UNP), Norfolk Southern Corporation (NSC) and CSX Corporation (CSX) should report growth rates of 18% or better.

These are all Zacks #3 Rank stocks classified in Transportation-Rail. All of the aforementioned rail companies should have higher profits in 2009 as well, though rate of growth will be slower than it was in 2008.

Outside of the energy sector, drug and medical product companies enjoyed a good quarter. In fact, more than half of the drug companies within the S&P 500 are projected to have generated double-digit earnings growth thanks to insurance coverage, a lower level of economic sensitivity and Medicare Part D are playing positive roles.

Cephalon, Inc. (CEPH), Gilead Sciences, Inc. (GILD) and Varian Medical Systems, Inc. (VAR) should all report fourth-quarter growth in excess of 20%.

All 3 are Zacks #2 Rank ("buy") stocks. CEPH and GILD are classified in Medicine-Biomed/Genetics. VAR is classified in Medical Instruments.

Industries With Declining Profits

The significant drop in commodity prices, combined with the credit crunch, significantly affected both mining companies and steel producers. Profits for Alcoa Inc. (AA), AK Steel Holding Corporation (AKS) and Nucor Corporation (NUE) likely dropped by 50% or more.

AA and AKS are Zacks #5 Rank ("strong sell") stocks and NUE is a Zacks #4 Rank ("sell") stock. AA is classified in Mining-Non-Ferrous. AKS and NUE are classified in Steel-Producers.

Semiconductor prices remain under pressure. Inventory and price competition had been a problem before the credit crunch occurred and the recession has only made matters worse. This morning, Micron Technology (MU) said that DRAM and NAND Flash prices fell 34% and 24%, respectively, during the quarter.

Nearly every chip company within the S&P 500 is expected to report a year-over-year decline in profits. This includes Intel Corporation (INTC) and Microchip Technology, Inc. (MCHP).

The only exception is Altera Corporation (ALTR), which may have generated profit growth of 31% this quarter.

ALTR and MU are Zacks #3 Rank stocks, MCHP is a Zacks #4 Rank stock and INTC is a Zacks #5 Rank stock. All 4 are classified in Electronic Components-Semiconductors.

Zacks Premium and Zacks Elite subscribers can view the Zacks Industry Rank List at http://www.zacks.com/zrank/zrank_inds.php. This interactive list allows you to see all of the companies, and their Zacks Rank, within more than 200 industries. Shown below is the Zacks Sector Rank List, which shows the trend in estimate revisions on a broader scale.

Sector Rank as of Dec 24
Sector	This Week's Zacks Rank	Last Week's Zacks Rank	FY09 Revisions Ratio	FY09 Estimates Revised Up	FY09 Estimates Revised Down	FY08 Revisions Ratio
Medical	2.55	2.55	0.43	129	302	0.43
Business Services	2.86	2.94	0.14	11	80	0.30
Computer and Technology	2.90	2.89	0.10	94	964	0.16
Aerospace	2.93	2.76	0.51	18	35	0.42
Consumer Discretionary	2.99	2.98	0.25	56	223	0.29
Utilities	3.01	3.05	0.23	31	134	0.51
Consumer Staples	3.11	3.08	0.19	37	190	0.28
Transportation	3.12	3.03	0.18	55	309	0.19
Retail-Wholesale	3.16	3.11	0.15	65	439	0.29
Finance	3.18	3.18	0.08	80	971	0.17
Industrial Products	3.19	3.23	0.08	19	237	0.11
Construction	3.20	3.16	0.14	10	73	0.18
Oils-Energy	3.21	3.26	0.10	67	662	0.21
Basic Materials	3.30	3.34	0.06	20	325	0.10
Auto-Tires-Trucks	3.55	3.53	0.01	1	87	0.09
Conglomerates	3.70	3.63	0.01	1	87	0.01

Charles Rotblut, CFA, is the senior market analyst for Zacks.com. He can be reached at crotblut@zacks.com.

"VAR" Free Stock Analysis: Buy? Sell? Hold?
"SUN" Free Stock Analysis: Buy? Sell? Hold?
"CNX" Free Stock Analysis: Buy? Sell? Hold?
"CEPH" Free Stock Analysis: Buy? Sell? Hold?
"MU" Free Stock Analysis: Buy? Sell? Hold?
"AA" Free Stock Analysis: Buy? Sell? Hold?
"NSC" Free Stock Analysis: Buy? Sell? Hold?
"NUE" Free Stock Analysis: Buy? Sell? Hold?
"ALTR" Free Stock Analysis: Buy? Sell? Hold?
"GILD" Free Stock Analysis: Buy? Sell? Hold?
"AKS" Free Stock Analysis: Buy? Sell? Hold?
"MEE" Free Stock Analysis: Buy? Sell? Hold?
"INTC" Free Stock Analysis: Buy? Sell? Hold?
"UNP" Free Stock Analysis: Buy? Sell? Hold?
"CSX" Free Stock Analysis: Buy? Sell? Hold?
"BNI" Free Stock Analysis: Buy? Sell? Hold?
Zacks Investment Research

The spin-off of Lorillard in 2Q08 eliminated the company's overhang from tobacco litigation, permitting an increased focuses on broadening hydrocarbon interests. While the company has announced large capital investments (which would benefit results in the future), we reiterate our Hold recommendation as of now.

CNA Financial is the 14th largest property-casualty insurer in the U.S., providing standard commercial lines, specialty lines (specialty property-casualty, professional and financial), surety, marine, and other property and casualty coverage as well as life, and group insurance coverage. CNA is 90.0% owned by Loews. This insurance provider contributed 55.5% of the $18.4 billion of the 2007 revenues reported by Loews.

Diamond Offshore owns and operates 45 offshore drilling rigs on a contract basis for oil and gas exploration and production companies. Loews currently owns a 50.4% stake in DO, which accounted for 14.2% of the company s 2007 revenues.

Boardwalk approximately 74.0% owned by Loews, is engaged through its subsidiaries in the operation of interstate natural gas pipeline systems. The company derived 3.7% of its 2007 revenues from these operations.

Read the full analyst report on L

Read the full analyst report on DO

This question becomes even more crucial now that, under the proposed banking-sector rescue legislation that was passed by the Senate Wednesday night, the individual cap on the level of government-guaranteed deposits would be raised from the current $100,000 to the new level of $250,000.

Let’s take a look at what the FDIC is and does, and outline how it’s supposed to function. There are also two steps folks can take to ensure the safety of their deposits.

The 4-1-1 on the FDIC

The FDIC is an independent government agency formed by Glass-Steagall Act of 1933, as a response to the runs on banks that took place during the Great Depression.

In 2005, the Federal Deposit Insurance Reform Act increased the amount of insurance coverage for an Individual Retirement Account (IRA).

Ostensibly, federal deposit insurance was created to protect depositors from the loss of deposits at FDIC-insured banks and savings associations. And the good news is that the FDIC has done so remarkably well over the last 75 years, that no depositor has lost a single penny of insured deposited assets.

FDIC insurance covers checking accounts, savings accounts, money market deposit accounts and certificates of deposit.

It does not, however, cover so-called "non-deposit products," such as stocks, bonds, mutual funds or life insurance, even though many of those products are offered through FDIC-insured banks.

As you might suspect, there are limits as to what is insured at any given institution. In general, deposit insurance covers:

• Single accounts owned by a single owner: $100,000
• Joint accounts with two or more owners: $100,000 per owner
• Revocable trusts: $100,000 per owner per qualifying beneficiary subject to specific limitations (check with your tax advisor or accountant)
• IRAs and select retirement accounts: $250,000

It’s important to note that the FDIC individual limit applies separately to different banks. That means if you have $100,000 in each of two separate accounts at different banks - one at each bank - you’re actually insured for the full $200,000.

Credit Crisis Safety Plays

As we mentioned, under the proposed banking-sector rescue legislation that was passed by the Senate Wednesday night, and which is supposed to head to the House of Representatives for a review and possible vote sometime today (Friday), the individual cap on the level of government-guaranteed deposits would be raised from the current $100,000 to the new level of $250,000. But that new coverage will not take effect until the bill passes the House and is then signed into law by U.S. President George W. Bush.

Until that happens, there are still a couple of "action items" worth pursuing to protect and help yourself. They are:

1. Call your bank and make sure it’s FDIC-insured. If it isn’t, consider switching to a bank that is.
2. If you’re unsure about your own assets, and whether or not they are covered, check out the FDIC’s electronic insurance estimator.

But do it sooner rather than later. There are a record 117 banks on the FDIC’s troubled list and our own estimates suggest that at present rates we could easily see that number rising to more than 200 in the next six months. That means the agency could be dumping dollars in the near term, so it’s only logical to make sure your money is covered.

[The first installment in an ongoing series detailing strategies that investors can use to insulate themselves and their finances from the ongoing credit crisis.]

Source: Credit Crisis Safety Plays: How to Make Sure That Your Bank Deposits are FDIC Insured