Company Description

Healthspring coordinates care plans through the Medicare Advantage market in Alabama, Florida, Illinois, Mississippi, Tennessee and Texas. The company also provides a national stand-alone Medicare prescription drug plan.

Healthspring Surprised by 22.22% in the Third Quarter

On Oct 29, Healthspring reported its third quarter results and easily beat the Zacks Consensus by 14 cents per share. Earnings per share were 77 cents compared to the Zacks Consensus Estimate of 63 cents. The company reported 53 cents in the year ago period.

Premium revenue rose 26% to $649.8 million compared to the year ago period. Membership in the Medicare Advantage jumped 19.4% compared to the year ago period and was up 15.1% even when compared with the end of 2008. Stand-alone PDP member also grew 11.6% compared to the third quarter of 2008.

As it said in its second quarter results, the company again emphasized that its Florida and Part-D operations have been outperforming.

Raised 2009 Guidance

Given that its Florida business continues to be strong, the company raised full year EPS guidance to the range of $2.30 to $2.40 from its prior guidance of $2.10 to $2.25.

It also is bullish on the number of members it expects under the Medicare Advantage program. The range has been adjusted higher to 188,000-189,000 from 186,000-188,000.

Zacks Consensus Estimates Rise

Given the raised guidance, analysts have moved to raise estimates. For the fourth quarter, the Zacks Consensus is up 3 cents to 62 cents in the last 30 days.

The full-year Zacks Consensus Estimate rose 7.8% to $2.34 from $2.17 per share just a month ago which is in the company's new guidance range. All 9 analysts raised in that time. Analysts expect 2009 earnings growth of 10.43%.

Analysts are optimistic about 2010, despite the ongoing uncertainty about healthcare reform. They boosted estimates for the full year by 16 cents to $2.22 per share.

Value Fundamentals

Healthspring is a Zacks #1 Rank (strong buy) stock. It is trading with a price-to-book of just 1.06. The company has a 5-year average return on equity (ROE) of 14.65%.

Zacks Investment Research

Chicago, IL – November 11, 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: AT&T Inc (T), Centennial Communications Corp (CYCL), Verizon (VZ), JA Solar Holdings Co. Ltd. (JASO) and AutoNation (AN).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Tuesday’s Analyst Blog:

AT&T Completes CYCL Acquisition

AT&T Inc (T) has reportedly completed its much anticipated acquisition of Centennial Communications Corp (CYCL), the eighth largest US wireless carrier by subscribers. This follows the recent approvals of the transaction by the US Department of Justice and US telecom regulator Federal Communications Commission (“FCC"). The transaction, which was originally set to complete in second-quarter 2009, is now officially closed.

As per the agreement terms, shareholders of Centennial will receive $8.50 in cash for every share they own, equating to approximately $944 million. Including net debt, the aggregate value of the deal is $2.7 billion. AT&T will take appropriate steps to redeem all of Centennial’s outstanding debts. AT&T expects minimal dilution to earnings and cash flow in 2009 given the upfront integration costs.

The acquisition has expanded AT&T’s wireless coverage to include the rural areas of the Midwest and Southeast regions of the US as well as Puerto Rico and the US Virgin Islands, adding 893,000 new subscribers. The acquisition will also offer operational synergies and improve the service quality of AT&T’s wireless network in specific markets.

As per the demand of the US regulators, AT&T will divest certain Centennial assets in eight markets across Louisiana (central and southern) and southwestern Mississippi as the acquisition may potentially hurt consumer interest in these regions. As part of this requirement, AT&T will sell wireless assets in five of the eight markets to its rival operator Verizon (VZ) for $240 million. Moreover, AT&T has committed to continue Centennial's existing roaming agreements with other carriers for at least four years.

JA Solar Gains Strength in Q3

JA Solar Holdings Co. Ltd. (JASO) announced adjusted earnings per American Depositary Share (EPADS) of RMB 0.66 (10 cents) in its fiscal third quarter, which exceeded the Zacks Consensus Estimate by 7 cents. The performance improvement came from higher shipments along with growing margins.

In the reported quarter, revenues rose 119.6% to RMB 1.3 billion ($193.3 million), as compared to RMB 600.7 million ($88.0 million) reported in the previous quarter. However, revenues fell 37.8% when compared to year-ago quarterly revenue of RMB 2.1 billion ($310.7 million).

JA Solar’s shipments were a company record of 177MW in the quarter. In the prior quarter, shipments were only 77MW, representing a sequential growth of 129.9%. In the year-ago quarter also, shipments were only 99MW, representing shipment growth of 78.8%.

AutoNation Predicts Gloomy 2010

AutoNation (AN) has sketched its industry outlook, revealing a gloomy 2010 preceding an improvement in the years following. The company stated that it anticipates a marginal rise in industry sales to 11 million cars and trucks from the current-year rate of 10 million vehicles. This was in stark contrast to an annual rate of more than 16 million vehicles ticked earlier this decade.

AutoNation blamed tight credit for pulling down sales this year. However, sales will hit bottom in 2009. Many banks have kept their credit standards extremely high for car loans, which is depressing the industry sales despite continuous efforts taken by the government to ease credit standards.

Further, job loss and stability in housing prices are also an issue. Thus, the Richmond, Virginia-based automotive retailer -- the largest in the U.S. -- expects the industry to recoup sales gradually by 2011 and beyond.

Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5515.

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=5517

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=5518.

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

Follow us on Twitter: http://twitter.com/zacksresearch

Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

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

The company presented these efficacy and safety data at the annual meeting of the European Committee for Treatment and Research in Multiple Sclerosis in Germany. This CAMMS223 study was conducted in early, relapsing-remitting MS patients, who were randomized to receive either alemtuzumab or Pfizer/Serono's (PFE) Rebif.

Patients taking once-yearly cycles of alemtuzumab reduced their risk of relapse by 72% and the risk of sustained accumulation of disability by 73% compared to patients receiving Rebif. Additionally, the annualized relapse rate and disability risk measured from year three to four remained at the same low level observed in prior years of the study. These results confirm the ability of alemtuzumab to extend the duration of response in patients with relapsing MS.

Alemtuzumab (trade name Campath) is available in the U.S. as a single agent for the treatment of B-cell chronic lymphocytic leukemia (B-CLL), and outside the U.S. for the treatment of B-CLL in patients who have been treated with alkylating agents and for whom fludarabine combination therapy is not appropriate.

Alemtuzumab is currently in two pivotal phase III studies for the MS indication. Positive results from these studies, expected in 2011, could lead to approval in 2012. The MS market is huge - according to the National Multiple Sclerosis Society, there are approximately 400,000 MS patients in the US. Worldwide, MS is estimated to affect more than 2.5 million people.

Currently available treatments include Biogen Idec's (BIIB) Avonex and Tysabri, Teva Pharmaceuticals' (TEVA) Copaxone and Pfizer/Serono's Rebif. Biogen is a leading player in the MS market with its Avonex posting sales of $2,203 million in 2008.

We maintain a Neutral recommendation on the shares of Wells Fargo.

The 60-day base contract, with eight option years, would be serviced by L-3's Systems Field Support operating unit, based in Madison, Mississippi. The company would provide program management of logistics, material supply support and repair overhaul services for 179 T-1A aircraft based at Vance Air Force Base, Oklahoma; Columbus Air Force Base, Mississippi; Pensacola Naval Air Station, Florida; and the Randolph and Laughlin Air Force Bases, Texas.

Headquartered in New York, L-3 Communications is a leading provider of Intelligence, Surveillance and Reconnaissance (ISR) systems and products; secure communications systems; aircraft modernization, training and government services; and is a merchant supplier of a broad array of high technology products. Its major customers are the Department of Defense (DoD), U.S. government intelligence agencies, major aerospace and defense prime contractors, foreign governments, and commercial telecommunication and wireless customers.

L-3's product mix is approximately 88% defense and 12% commercial. The company functions through four primary business segments: Specialized Products; Government Services; Aircraft Modernization and Maintenance (AM&M); and Command, Control, Communications and Intelligence, Surveillance, and Reconnaissance (C3ISR).

The company trades at a discount to its industry peers in terms of price-to-book, price-to-sales, and price-to-future cash flow. We maintain our market Outperform recommendation on the shares.

The company with a cumulative capacity of 8,000MW is the second largest nuclear power generator in the U.S. Entergy operates through five subsidiaries: Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy Mississippi and Entergy New Orleans.
 
Entergy’s revenues fell 22.8% year over year to $2.5 billion in the quarter with Electricity (down 24%), Natural Gas (down 46.6%), and Competitive businesses (down 16.4%). Electricity revenue of Entergy in-line with the industry trend was affected most with the industrial customers. Entergy’s volume sales to industrial customers fell 9.7%, while overall volume loss was 5.9% in the quarter.

However, the company was able to improve upon the overall headcount of customers year over year by 0.7%, barring the industrial customers, which shrunk by 3.4%. With the economy in doldrums, Entergy’s industry peers reporting on Tuesday – Allegheny Energy (AYE) and Duke Energy Company (DUK) also shared the industrial customer downslide.
 
Entergy revised its fiscal 2009 EPS guidance on account of an expected slide in power prices and charges related to the planned spin-off of its non-utility nuclear business into a separate company, Enexus Energy Corporation. GAAP EPS estimate for the fiscal now stands at $6.00 – $6.60 and operational EPS estimate at $6.20 – $6.80. This is in-line with the Zacks Consensus Estimate of $6.57 for the fiscal year.
 
We currently rate Entergy shares as Neutral, expecting the stock to perform in-line with the broader market.

Weyerhaeuser, one of the largest forest-products companies in the world with operations across 10 countries, reported its fourth straight quarterly loss as it continues to reel from the effect of sluggish demand from the housing industry. However, the company feels that the sector is witnessing signs of stabilization after negotiating the worst of headwinds. The Federal Way, Washington-based company’s sales slumped 36% year over year to $1.39 billion.

Revenue from the Timberlands segment fell 7.1% year over year to $208 million, primarily on a slump in log prices and lower harvest levels driven by the collapse of the California housing market. The Wood Products segment slid 44.5% year over year to $594 million as the company slashed capacity amid weak demand for softwood lumber and depressed prices for engineered products.

Sales from Cellulose Fibers dropped 24.1% year over year to $349 million mainly on account of an extensive boiler repair at a facility in Columbus, Mississippi coupled with annual maintenance outages at two other facilities. The Real Estate segment, which operates under Weyerhaeuser Real Estate Co., reported an almost 44% year-over-year decline to $199 million as traffic decreased 33% and home closings dropped by 47%.

Weyerhaeuser reported gross margin of 24.5%, a decline of 570 basis points over the same quarter last year on lower price realizations and sluggish volumes. Meanwhile, the company’s operating loss came in at $62 million, compared to the loss of $404 million in the year-ago quarter. The narrower loss was caused by cost-restructuring initiatives, including job cuts, which led to a 37.8% year-over-year fall in SG&A expenses to $153 million and a substantial 81% drop in impairment of long-lived assets to $53 million.

Weyerhaeuser’s cash and cash equivalents at the end of the quarter was $1.75 billion, an improvement of $92 million over the previous quarter on higher cash from operations and a gain of $29 million from the sale of non-strategic lands in southwest Washington. The cash was primarily utilized for the payment of dividends ($53 million), capital expenditure ($32 million) and repayment of debt ($18 million).

Moving forward, management continues to expect a difficult third quarter despite signs of stabilization. Weyerhaeuser anticipates the Timberlands unit’s performance to deteriorate further on additional deferrals in timber harvest and lower price realizations.

Continued weakness in demand for Wood Products is expected to be partially offset by slight improvement in prices of certain products. Real Estate is also likely to decline further due to a temporary shift to mid-to-lower priced Arizona properties from higher-priced California homes. Cellulose Fibers is the only division that the company sees benefiting from stabilization in pulp prices and lower downtime.

The full-year Zacks Consensus Estimate, derived from 14 covering analysts, is currently pegged at a loss of $2.46 per share, which has worsened by 4 cents in the past month. The most accurate estimate, however, is slightly better at a loss of $2.35 per share.

Entergy wants to spin off the nuclear plants as a new company – Enexus Energy Corp. The nuclear plants are Pilgrim in Plymouth, Massachusetts; Vermont Yankee in Vernon, Vermont; Indian Point in Westchester County, New York; Fitzpatrick in Oswego County, New York and the Palisades plant in Covert, Michigan.

Entergy plans to finish the spin-off of its non-utility nuclear power business by end of 2009. The spin-off will leave the company with five regulated utilities and other assets in the Gulf States region.

This news could not have come at a better time for Entergy. The company recently lowered its guidance for both the second quarter and the full year. It will release earnings for the quarter on August 4, 2009.

New Orleans-based Entergy is primarily engaged in electric power production and retail distribution operations. The company owns and operates power plants with approximately 30,000MW of electricity generating capacity. It delivers electricity to 2.7 million utility customers in Arkansas, Louisiana, Mississippi and Texas. Entergy Nuclear is the second-largest nuclear generator in the U.S., with interests in six nuclear plants. We maintain our speculative BUY recommendation on ETR.

Chicago, IL – July 27, 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: ITT Educational Services (ESI), Toyota Motor (TM), Ford (F), General Motors (MTLQQ) and Schlumberger Limited (SLB).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Friday’s Analyst Blog:

ITT Educational Tops; Lifts Guidance

ITT Educational Services (ESI) reported strong second quarter results, and beat expectations by $0.15 per share. Quarterly earnings were $1.87 per diluted share, representing a 55.8% increase over $1.20 reported in the corresponding prior-year period.

Quarterly revenue increased 28.7% year-over-year to $317 million driven by a 33.5% increase in new student enrollment and an increase in tuition. The quarter student persistence rate increased 140 basis points (bps) to 75.3% primarily due to strong increases in student retention rates. Total student enrollment (excluding international enrollments) increased 26.2% to 69,127 versus 54,793 students in the comparable prior-year period.

Toyota Expecting Profits in 2010

Recently, North American chief of Japanese auto giant Toyota Motor (TM), Yoshimi Inaba, revealed that the company’s North American operations would possible become profitable in 2010. The forecast assumed U.S. vehicle sales to reach 10 million units this year and 12 million next. However, Inaba is dubious about returning to the 2007 level vehicle sales of 16 million units soon.

Last month, Akio Toyoda – the newly joined President and grandson of Toyota’s founder Kiichiro Toyoda – expressed views about making the company profitable. He anticipated the annual global vehicle production capacity to increase from 10 million units to 13 million units.

Toyota has been struggling hard amidst weak U.S. sales. In the first six months of the year, the company’s U.S. sales plunged 38%, higher than the overall market decline of 35%. In June, Ford (F) toppled the automaker by occupying the second position in terms of absolute sales figures.

Currently, Toyota is seeking to review its U.S. manufacturing strategy. The company has 12 manufacturing facilities in the U.S. Half of these are operating under capacity and one has been idled in Mississippi. It also looks forward to close down the New United Motor Manufacturing, Inc. (NUMMI) plant in Fremont, California. NUMMI is a 50/50 joint venture between Toyota and General Motors (MTLQQ) that produces Corolla and Tacoma for the former and Pontiac Vibe for the latter.

Schlumberger: Competitive results, positive outlook

Houston, Texas-based Schlumberger Limited (SLB), the world’s largest oilfield services company, reported its second quarter results before today’s market opened. Diluted earnings per share from continuing operations were $0.68, compared to our estimate of $0.62 per share and market expectations of $0.63.

However, the operating earnings were lower than the first quarter earnings of $0.78 per share and year-ago quarter earnings of $1.16 per share. The negative comparisons were primarily due to a steep decline in North American drilling activity.

Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5515.

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=5517

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=5518.

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

Follow us on Twitter: http://twitter.com/zacksresearch

Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

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

The NUMMI was started as a General Motors (GMGMQ) plant in 1962 but closed down in 1982 due to operational inefficiency. However, it was reopened two years later as a 50/50 joint venture between General Motors and Toyota. It was a remarkable joint venture in America’s as well as Toyota’s history.

Americans learnt of the famous Japanese ‘lean manufacturing system’ (focused on just-in-time delivery) through NUMMI and Toyota took its first step in the U.S. using GM’s supply lines. NUMMI produces Corolla and Tacoma for Toyota and Pontiac Vibe (Toyota’s version of the Vibe) for GM.

GM decided to pull out of NUMMI after declaring bankruptcy last month as it will discontinue the Pontiac brand. Last week, the ‘New GM’ emerged after the company completed its bankruptcy filing. The company will dump its NUMMI assets in ‘Old GM’ for liquidation. However, it will continue producing its Pontiac Vibe until August as the current UAW contract with NUMMI expires on August 31.

According to the East Bay Economic Development Alliance, the NUMMI closure would cost 5,400 direct jobs and 30,000 indirect jobs.

With the slump in industry sales, NUMMI has seen severe production cuts over the past six months. The assembly line manufacturing the Vibe and the Corolla has witnessed a 25% decline in production to 76,000 vehicles, while the Tacoma has seen an 83% fall in production.

Toyota has also been affected financially by the economic crisis. The company posted its first annual loss (437 billion yen or $4.4 billion) since 1950 for the fiscal year ended March 2009. Further, management has recently projected net loss to worsen to 550 billion yen ($5.5 billion) for the fiscal year ending March 2010.

Toyota has 12 manufacturing facilities in the U.S. Presently, six of them are operating under capacity and one Mississippi plant has been idled. The NUMMI closure seems likely as wages are higher at the plant (due to unionization) compared to others including plants in Canada and Mexico, which producing Corolla and Tacoma, respectively.

We reserve our opinion on Toyota as a Hold with a target price of $75.00.

STATES WITH PROJECTED FY2010 BUDGET GAPS
State	FY2010 pre-budget	FY2010 mid-year gap	FY2010 Total	FY2010 Total % of Budget
Alabama	$1.2 billion	0	$1.2 billion	16.70%
Alaska	$1.3 billion	0	$1.3 billion	30.00%
Arizona	$4.0 billion	0	$4.0 billion	41.10%
Arkansas	$146 million	0	$146 million	3.20%
California*	$34.2 billion	$19.5 billion	$53.7 billion	58.20%
Colorado	$1.0 billion	$384 million	$1.4 billion	18.60%
Connecticut	$4.1 billion	0	$4.1 billion	23.20%
Delaware	$557 million	0	$557 million	17.60%
District of Columbia	$650 million	$150 million	$800 million	12.70%
Florida	$5.9 billion	0	$5.9 billion	22.80%
Georgia	$3.1 billion	$750 million	$3.9 billion	22.30%
Hawaii	$682 million	$297 million	$978 million	19.10%
Idaho	$411 million	0	$411 million	16.40%
Illinois	$9.2 billion	0	$9.2 billion	33.00%
Indiana	$1.1 billion	0	$1.1 billion	7.50%
Iowa	$779 million	0	$779 million	13.20%
Kansas	$1.4 billion	Yes, DK size	$1.4 billion	22.60%
Kentucky	0	$1.1 billion	$1.1 billion	11.30%
Louisiana	$1.8 billion	0	$1.8 billion	21.60%
Maine	$640 million	0	$640 million	21.40%
Maryland	$1.9 billion	Yes, DK size	$1.9 billion	13.60%
Massachusetts	$5.0 billion	0	$5.0 billion	17.90%
Michigan	$2.4 billion	0	$2.4 billion	12.00%
Minnesota	$3.2 billion	0	$3.2 billion	21.00%
Mississippi	$480 million	0	$480 million	9.60%
Missouri	$923 million	0	$923 million	10.30%
Nebraska	$150 million	0	$150 million	4.30%
Nevada	$1.2 billion	0	$1.2 billion	37.80%
New Hampshire	$250 million	0	$250 million	16.20%
New Jersey	$8.8 billion	0	$8.8 billion	29.90%
New Mexico	$345 million	0	$345 million	6.30%
New York	$17.9 billion	0	$17.9 billion	32.30%
North Carolina	$4.6 billion	0	$4.6 billion	21.90%
Ohio	$3.3 billion	0	$3.3 billion	12.30%
Oklahoma	$600 million	0	$600 million	10.50%
Oregon*	0	0	0	0.00%
Pennsylvania	$4.8 billion	0	$4.8 billion	18.00%
Rhode Island	$590 million	0	$590 million	19.20%
South Carolina	$725 million	0	$725 million	12.50%
South Dakota	$32 million	0	$32 million	2.90%
Tennessee	$1.0 billion	0	$1.0 billion	9.70%
Texas	$3.5 billion	0	$3.5 billion	9.50%
Utah	$721 million	$279 million	$1.0 billion	19.80%
Vermont	$278 million	0	$278 million	24.80%
Virginia	$1.8 billion	Yes, DK size	$1.8 billion	10.90%
Washington	$3.4 billion	$195 million	$3.6 billion	23.30%
West Virginia	$200 million	0	$200 million	5.30%
Wisconsin	$3.2 billion	0	$3.2 billion	23.20%
Wyoming	0	$32 million	$32 million	1.70%
Total	$143.2 billion	$22.7 billion	$165.9 billion	24.40%

This will lead to very drastic cuts in state budgets. Access to medical care by the poor will likely be one of the first things to be cut.

Education budgets will also probably be pared. This could be decreased spending on new textbooks, which would not be good news for publishers like McGraw-Hill (MHP) and Scholastic (SCHL).

Another area that is likely to be hit is new equipment at the municipal level. For example, I would not expect Oshkosh (OSK) to have a very good year selling new fire engines and snow removal equipment to municipalities.

Layoffs of state and municipal workers will simply add to the already high and rising unemployment rate. In short, a big part of the federal stimulus spending is being offset by (legally mandated) anti-stimulus actions at the state level.

As the graph shows, state fiscal problems tend to persist well after the recession is officially over. Indeed the problem is usually worse in the second or third year since by then the "rainy day funds" have already been used up.

Following the last recession, states collectively had their worst year in 2004 with a shortfall of $80 billion (or less than half what they face for fiscal 2010), which was well after the recession officially ended. Thus 2011, and possibly even 2012, will be a very lean year at the state level as well.

Headquartered in Bellevue, Washington, Paccar Inc. (PCAR) announced the delay in the commissioning of its diesel engine plant near Columbus, Mississippi. Paccar attributed the delay to adverse economic conditions that have impacted truck demand. The plant, which was scheduled to begin operations by the end of 2009, will now start production in late 2010.

Paccar is engaged in the design, manufacture and distribution of light, medium, and heavy-duty trucks. The company markets heavy-duty diesel trucks under the Kenworth, Peterbilt and DAF brands. The company's trucks are used for over the road and off the highway to haul freight, petroleum, wood products, construction and other materials. Paccar's upcoming plant in Mississippi will manufacture 12.9-liter and 9.2-liter diesel engines for Kenworth, Peterbilt and DAF vehicles.

Back in 2007, Paccar had signed a contract with the state to provide 500 jobs at the Mississippi plant by 2013. According to the management, construction at the facility is nearly completed and workers are installing and checking equipment. This is a matter of concern, as the company has incurred capital expenditure for the plant but has decided to keep the plant idle, as the economic outlook is bleak.

A downturn in the U.S. has affected Paccar's freight shipments and truck purchases worldwide. Paccar expects European sales to decline by as much as 10% in 2009. Truck retail sales have dampened due to the increase in diesel prices along with the depressed housing market and lower auto production. Global truck retail sales in 2008 were below the five-year average of 235,000 units because of the current recession.

The weak truck markets will continue to affect PACCAR's business in North America and Europe in 2009. The company has lowered its 2009 outlook in the U.S. and Canada. PACCAR is now looking at truck sales in the range of 100,000 to 130,000 units for the industry in 2009, down from the previous estimate of 130,000 to 170,000 units. Furthermore, PACCAR faces strong competition from its three principal competitors Navistar International (NAV) (headquartered in the U.S.), and Daimler Ag (DAI) and Volvo (both headquartered in Europe) in the U.S. and Canada truck market.

We rate the stock a Hold and set a six-month target of $30.00.

Genzyme Corp. (GENZ) said it acquired the worldwide rights of marketing leukemia treatment Campath and two other hematological-cancer drugs from its German partner Bayer for up to $650 million in royalties.

As part of the agreement, Genzyme will be responsible for developing Campath to treat multiple sclerosis (MS). However, Bayer will retain an option to co-promote the drug if it gets approval for MS and the right to commercialize Campath for use in organ transplantation.

After selling the rights of Campath, and blood cancer drugs Flurdara and Leukine to Genzyme, Bayer said it will focus on kidney and liver cancer drug Nexavar.

A Bayer spokesperson said the deal "significantly improves the profitability for two of our key franchises - oncology and MS". The company has generated about 220 million euros ($293.2 million) annually from the three drugs.

On the other hand, the deal will generate $185 million in sales for Genzyme's oncology segment in 2009 and up to $700 million over the next three years. The Cambridge, Massachusetts-based company also expects the transaction to add to its earnings per share.

Genzyme shares climbed more than 2% to $60.35 at noon on the NASDAQ.

Company Description

Genesis Energy operates as an energy master limited partnership ("MLP") which transports energy and refines products throughout Texas, Louisiana, Arkansas, Mississippi, Alabama and Florida. Its customers include the integrated oil companies as well as independent oil producers.

< ?DART(15);?>

The company has 4 business segments:

1. Pipeline Transportation Division which transports crude oil, carbon dioxide and natural gas
2. Refinery Services Division which processes sour gas streams to remove sulfur
3. Supply and Logistics Division which transports, stores and supplies energy products to customers
4. Industrial Gases Division which produces and supplies industrial gases like carbon dioxide and syngas.

14th Consecutive Quarterly Dividend Increase

As a MLP, Genesis Energy distributes a large portion of its income to unit holders. On Jan 8, the company announced a distribution payment for the quarter ended Dec 31, 2008 which rose 16% over the fourth quarter 2007. The 33 cents per common unit distribution is payable on Feb 13 for unitholders of record as of Feb 3.

Surprised on Third-Quarter Estimates by 19.05%

On Nov 6, Genesis Energy reported third-quarter 2008 earnings that beat analysts' estimates by 4 cents a share.

Net income jumped 535.29% to $10.8 million, or 25 cents per unit, from $1.7 million, or 7 cents, in the prior year. Analysts expected 21 cents. Third quarter 2007 only saw the impact of the Davison businesses for 2 months of that quarter.

The company saw no lasting effects from the 2 Gulf hurricanes during the quarter.

Solid Cash Position

Even with its large distributions, Genesis still has a strong cash position. At the end of the third quarter, the company had $170 million in cash and debt commitments.

Consensus Estimates Rise for 2008

Given the company's recent solid track record, covering analysts are fairly optimistic about the fourth-quarter 2008 and full-year 2008. Fourth-quarter estimates are up a penny in the last 30 days to 23 cents. 2008 consensus estimates rose 2 cents to 69 cents in the last 90 days.

For 2009, analysts are projecting 51.44% year-over-year earnings growth, with consensus estimates of $1.05 per unit.

Analysts are also bullish on long term growth, forecasting 20% earnings growth over the next 5 years.

GEL is scheduled to report fourth-quarter and full-year earnings on Feb 25.

Value Fundamentals

Genesis Energy is a Zacks #1 Rank (strong buy) stock. It has surprised on estimates 3 out of the last 4 quarters.

GEL is trading at only 7.4x forward earnings. It has a price-to-book of 0.71. Its PEG ratio is only 0.60. As an MLP, Genesis pays a quarterly distribution with a current spectacular yield of 11.80%.

"GEL" Free Stock Analysis: Buy? Sell? Hold?
Zacks Investment Research

Poll: Is the Hedge Fund Industry Doomed?

Related to "Poll: Are Hedge Funds Doomed or Positioned for Re-Growth":

• Hedge Fund Performance
• Hedge Fund Databases
• Investment Book Reviews

With the hurricane throwing most of the refineries off gear till early this week, Chevron cashed in when its Mississippi refinery sputtered back to life first. The lack of supply meant that the company could pump in oil into the market with a wider margin. 

The stock has a Buy recommendation from Zacks with a P/E ratio of 8.3, which is at a premium to S&P’s 14.1. Chevron’s PEG [price-to-earnings-growth] too looks healthy at 0.9, ahead of the industry by 0.3. S&P has also given the stock a very positive 5 STAR Strong Buy rating. This comes as little surprise as Chevron’s strong pipeline -- projected to add more than 1 MMBOE/d [million barrels of oil equivalent per day] by 2011 -- and recent exploration success have improved its long-term upstream growth prospects.

Zacks analyst Sheraz Mian had this to write in his latest report on Chevron: "We believe that the company is capable of generating above peer group average production and reserve growth in the long run."

Chevron has a very strong balance sheet and a growing dividend that currently yields an attractive 3.01%. Following the trend, analysts have raised the stock’s EPS forecast for the year by 57 cents to $12.21 over the last three months.

Penn Virginia Corporation (PVA) is an oil and gas exploration and production company that operates in Appalachia, Mississippi, east Texas, the Mid-Continent and the Gulf Coast regions.

The company has been allocating the majority of its resources to its lower-risk drilling areas in Appalachia, Mississippi, east Texas and the Mid-Continet regions. However, PVA continues to explore in the higher-risk areas such as Gulf Coast region and the shale plays, including the Devonian, Fayetteville and New Albany shales.

PVA also owns approximately 77% of Penn Virginia GP Holdings (PVG), the owner of the general partner and the largest unitholder of Penn Virginia Resource Partners (PVR), a manager of coal and natural resource properties and related assets and the operator of a midstream natural gas gathering and processing business.

Penn Virginia Reports Record Second Quarter as Crude Soars

PVA joined a host of exploration companies that posted record numbers in the second quarter as crude made new record highs. If you weren't making money with those prices, when would you?

Net income nearly doubled in the second quarter to $41.6 million, or $1.00 per share, from $21.8 million, or 57 cents per share, in the second quarter of 2007. Analysts expected 78 cents per share.

The company had record oil and natural gas production for the quarter, rising 14% to 11.4 billion cubic feet of natural gas equivalent (Bcfe) per day from 10.1 Bcfe. It was also 10.5% higher than that produced in the first quarter of the year.

"We are pleased with this quarter's record results from all three of our business segments. Our oil and gas segment delivered record quarterly production with very high operating margins, while PVR Midstream had record system throughput volumes and PVR Coal & Natural Resource Management reported near-record lessee coal production," said A. James Dearlove, President and Chief Executive Officer.

PVA Updates Full Year Production Guidance and Outlook

With the record production in the second quarter, the company slightly raised its 2008 production guidance to between 49.7 and 51.7 Bcfe.

With the excess cash coming in from high oil prices, PVA raised its oil and gas capital expenditure guidance to a range of $625 - $650 million from $490 - $510 million.

PVA also expects growth in the midstream and coal and natural resource management segments during 2008. The company had a near-record quarter for coal production by PVR's lessees and expects higher production levels in the second half of 2008 compared to the first half.

Penn Virginia also expects average coal royalties per ton to continue to rise for the balance of 2008. PVG, of which the company owns 77%, provides approximately $43 million in annualized cash distributions to PVA, about 27% higher than the distributions of a year ago.

Consensus Estimates Rise for Third Quarter and the Full Year

Despite falling oil and natural gas prices during the third quarter, analysts have kept third quarter and full year estimates elevated. Third quarter estimates are up 6 cents to 90 cents from 84 cents 90 days ago. For the full year, estimates spiked 19.9% to $3.43 from $2.86 per share during that same time period.

PVA reports third-quarter earnings on Nov 5.

Value Fundamentals

Penn Virginia is a Zacks #1 Rank (Strong Buy) stock. It trades at 13.2x forward earnings. Its price-to-book is 2.46. The company has an solid five year average return on equity (ROE) of 16.68%. As an added bonus, the company pays a dividend, with a current yield of 0.40%.

"PVIR" Free Stock Analysis: Buy? Sell? Hold?
Zacks Investment Research