With the deal, Jones Lang would be entrusted to effectively manage the day-to-day tasks related to the operations across SunTrust’s facilities. SunTrust operates an extensive branch and ATM network throughout Florida, Georgia, Maryland, North Carolina, South Carolina, Tennessee, Virginia and Washington, DC. Jones Lang’s leading position in property and corporate facility management services would enable it to improve the operational efficiency of SunTrust.

On the other hand, the deal strengthens Jones Lang’s position in the market and offers it an expanded role in the operations of one of the largest banking organizations of the country. Jones Lang is a leading full-service real estate firm that provides corporate, financial, and investment management services. The company caters to corporations and other real estate owners, users, and investors worldwide.

Currently, Jones Lang provides property and corporate management services across a worldwide portfolio of 1.4 billion square feet. Its investment management division, LaSalle Investment Management is one of the largest and most diverse companies in the real estate market and has over $46 billion of assets under management.

However, potential for positive earnings momentum with modest growth is expected to continue through the utility’s regulated and historically stable electric and gas operations. The company’s nuclear expansion project is a potential catalyst for long-term earnings growth.

In the second quarter, SCANA reported earnings of 45 cents per share, beating the Zacks Consensus Estimate of 43 cents. The favorable comparison was driven by lower operating costs and customer growth.

During the first half of 2009, SCANA’s two principal subsidiaries, South Carolina Electric & Gas Co. (SCE&G) and Public Service Co. of North Carolina, saw natural gas customer growth of 1.3% and 1.6%, respectively. SCE&G’s electric customer growth was 1.2%.

However, we remain concerned about the effect of unpredictable weather, nuclear power generation risks, a debt-heavy balance sheet and negative credit ratings on the company’s future growth prospects.

The company attributed the downward revision in guidance to lower potash demand and limited restocking by fertilizer distributors worldwide. It said global potash producers have curtailed nearly 20 million tons of production in the last 12 months.

The company expects a 60% year-over-year decline in potash sales volumes and an 85% drop in the combined phosphate and nitrogen gross margin. It sees third-quarter profit at the low-end of its prior guidance of 80 cents to $1.20 per share. The company also trimmed its 2010 global potash demand forecast to 50 million to 55 million tons from 55 million to 60 million tons. In January, Potash Corp. had forecast earnings of $10 to $12 per share in 2009.

Potash Corp.’s second-quarter profit of 62 cents per share missed both management’s guidance of 70 cents and the Zacks Consensus Estimate of 72 cents. Earnings declined 80% year over year. The quarter also saw a 67% drop in sales to $856 million.

Potash Corp. is the world's largest producer of potash, representing about 17% of the global production and 22% of the global and 55% of North America’s capacity. It also controls 55% of the global and 70% of North America’s unused potash supplies.

Potash Corp. is the third-largest producer of phosphate in the world based on capacity. The company estimates its phosphate operations to produce around 6% of the world’s phosphoric acid. Its North Carolina facility is believed to be the world’s largest integrated phosphate mine and processing plant.

However, the global economic crisis and weakened demand are matters of concern. We maintain our Neutral recommendation on the stock.

The three-year old contract has been extended twice. Goodyear was in talks with USW in Cincinnati since June 8. The steelworkers were adamant throughout the negotiations about maintaining their job security. However, Goodyear did not disclose any details about the deal, especially on job cuts and plant closures.

Goodyear is focused on streamlining its operations by achieving cost reductions of $2.5 billion by 2009. Of this, the company already achieved $1.8 billion by the first half of the year. Goodyear anticipated that its master labor agreement with the USW will result in savings of $300 million in 2009.

A weak industry demand negatively affected Goodyear Tire’s results in the second quarter. The company reported a net loss of $221 million or 92 cents per share for the quarter versus earnings of $75 million or 31 cents per share in the same quarter last year. Total segment operating income plummeted 93% to $24 million from $330 million in the prior-year quarter. Sales were down 25% to $3.9 billion.

We continue to recommend the shares of Goodyear as Neutral with a target price of $19.

Duke Energy issued senior notes totaling $500 million due in 2014 with a 3.95% coupon rate semi-annually and another $500 million due in 2019 with 5.05% coupon rate annually.

The company needs funds for its ongoing capital expenditures. Duke Energy is currently expanding its Cliffside Steam Plant on the border of Cleveland and Rutherford counties and a new plant at Edwardsport gasified-coal facility in Indiana.

The company is also investing to control carbon dioxide emissions from its coal-based plants. This is vital in the light of recent progress in the American Clean Energy and Security Act that stipulates stringent caps against such emissions.

Based in Charlotte, North Carolina, Duke Energy is a diversified energy company. It supplies electricity to nearly 4 million US customers. It has approximately 36,000MW of electricity generating capacity in the Midwest and the Carolinas. We have a Neutral recommendation on the shares of Duke Energy.

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

Company Description

Family Dollar is a discount retail chain operator in the United States. The company offers a core assortment of name-brand and quality consumable merchandise supplemented by fashion and seasonal merchandise. A Fortune 500 company that is based in Matthews, North Carolina, FDO operates more than 6,500 stores in 44 states.

Shares Spiked on Record Results

Family Dollar recently reported record results for the fiscal third quarter. Earnings per share 62 cents came in 5% ahead of the consensus estimate and surged past the previous year's 46 cents. Net sales were up 8% year-over-year.

"In today's environment, Family Dollar's commitment to value has great appeal. Customers are shopping us more frequently and relying on us to meet more of their basic needs. As a result, we continue to gain market share," said Howard R. Levine, Chairman and Chief Executive Officer.

The company's shares soared in response to the strong quarter and have maintained the higher level fairly well.

During the past year, FDO has outperformed the market by more than 40%.

Bullish Forecasts

The company issued a guidance for the fiscal year ending August 2009, forecasting earnings of $2.03 to $2.07 per share.

A total of 16 out of 17 covering brokerage analysts lifted their fiscal year estimates over the past month to $2.06 per share from $2.00. For the year ending August 2010, 14 out of 17 analysts boosted earnings forecasts to $2.28 per share from $2.18 over the past month.

Favorable Industry Comparisons

Family Dollar's earnings are expected to grow 12.5% over the next 3 - 5 years, which is in line with the industry average. The company's return on equity (ROE) of 22% tops the industry average of 16%. This Growth and Income pick also offers an industry-leading dividend yield of 2%. Zacks Investment Research

According to Wolters Kluwer Health, in 2008, there were over 30 million prescriptions generated for oral antitussive and antitussive combinations. Nearly 10 million of these prescriptions were for products that only contained a narcotic antitussive and an antihistamine.

The drug has a huge market opportunity since cough can adversely affect the quality of life, leading patients to seek medical attention. Most antitussive and antitussive combination products currently in the market must be dosed every four to six hours, which can be inconvenient. Patients may not be able to sleep through the night because their antitussive is not effective for more than four hours.

Cornerstone believes that CRTX 067 could improve patients’ life quality by providing more convenient twice-daily, longer lasting dosing.

This submission is one of the many positives the company has seen ever since it was established late last year through the merger of Critical Therapeutics with Cornerstone Biopharma Holdings Inc. The merged company has a wide range of products including AlleRx for allergic rhinitis; Balacet 325 for pain; Spectracef, an oral antibiotic for infections; and Zyflo/Zyflo CR for Asthma.

The company currently promotes its products in the United States to respiratory-focused physicians and key retail pharmacies using its specialty sales force. It also boasts of a deep late-stage clinical pipeline.

The recently signed $70 million deal with Chiesi Farmaceutici, an Italian pharmaceutical firm, has broadened its product portfolio further apart from strengthening its balance sheet. The deal includes U.S. rights to the Chiesi drug Curosurf, which is used to treat respiratory distress syndrome (RDS) in premature babies.

A couple of days ago, Cornerstone acquired the commercial rights to Factive, an antibiotic from Oscient Pharmaceuticals Corp. (OSCI) in North America and certain European countries, thus expanding its presence in is segment.

We have a Buy rating on Cornerstone Therapeutics based on its solid performance in the first quarter of 2009 and a positive outlook in the next few quarters despite the current economic environment.

Company Description

The Buckle is a retailer of casual apparel, footwear, and accessories for young men and women in the United States. The company's casual apparel products include denims, bottoms, tops, sportswear, and outerwear.

Known as a denim destination, each store carries a wide selection of fits, styles, and finishes from leading denim brands, including the company's exclusive brand, BKE.

Headquartered in Kearney, Nebraska, Buckle currently operates 393 retail stores in 40 states, including the recent opening of 3 new stores in Savannah, Georgia; Newport News, Virginia; and Pineville, North Carolina. BKE also closed one store in fiscal April. The Company operated 374 stores in 39 states as of May 7, 2008.

Stellar Sales

The company recently posted sales results for the month of June. Comparable store net sales were up 9.6% on a year-over-year basis. Net sales jumped 14.4% to $70.8 million.

Competitive Income

The Buckle declared a dividend of 20 cents in early June, noting that it is payable on July 27 to shareholders of record at the close of business on July 15. The retailer offers an industry-leading dividend yield of 3%.

Rising Estimates

Current full-year earnings forecasts to $2.65 per share are above the 3 months-ago level of $2.53. For the following year, analysts boosted projections to $2.76 per share, versus the 3 months-ago level of $2.57.

The Buckle's earnings came in, on average, 8.55% ahead of analysts' expectation over the past 4 consecutive quarter.

Solid Earnings in the First Quarter

The Zacks #1 Rank (Strong Buy) play posted first-quarter earnings of 58 cents per share, surpassing the previous year's 41 cents and topping the consensus estimate by 18%.

Results for the second quarter are scheduled for release on August 20.

Strong Fundamentals

The Buckle boasts a strong balance sheet with no debt. The company's return on average (ROE) of 32% more than triples the industry average of 9%. Its net profit margin of 13.5% sits high above the industry average of 2%. Zacks Investment Research

The new solution, Frontiers 4.2.2, automates the clinical and business documents that are required in the operating room. This enables the clinicians and physicians to focus more on patient care. The new solution provides real-time data while ensuring that the documents comply all quality, regulatory and the best practice standards.

Merge is a healthcare software and services company focused on integrating radiology workflow to improve productivity, profitability and patient care by fusing business and clinical workflow, and intelligently managing and distributing diagnostic images and information throughout the healthcare enterprise.

Merge was paralyzed by several issues in the past like a dwindling cash balance, management turnover, accounting miscues and litigations. The real turnaround started from the second quarter of 2008 when the company received a much needed cash infusion of $20 million from Merrick RIS, LLC in May 2008.

Merge Healthcare recently tapped the Chinese healthcare market by forming an alliance with the leading healthcare IT provider there. The alliance is likely to widen Merge’s customer base and thus will increase its top line.

The U.S. Congress’ approval of more than $20 billion in spending on health-information technology is also likely to benefit the company. However, majority of the spending in the U.S. will be felt between 2011 and 2015.

Merge has recently offered to purchase all outstanding shares of North Carolina-based etrials Worldwide Inc. (ETWC) that provides clinical trials software and services. The offer is a mix of cash and stock valued at over $18.3 million.

The shareholders of etrials Worldwide will receive $0.80 plus 0.3448 shares of Merge for each share of etrials they hold. The exchange offer will expire on July 14. The combined Merge-etrials entity will be able to provide contract research organizations and clinical trial sponsors configurable systems with both critical imaging technologies and electronic clinical capabilities.

Merge’s main competitors include AllScripts-Misys Healthcare Solutions (MDRX) and Amicas, Inc. (AMCS). Merge reported strong first quarter of fiscal 2009 results with growth seen in its top and bottom lines. The company reported three consecutive quarters of net income.

The company’s restructuring activities of 2008 paid dividends by increasing its margins. Merge also started generating cash from operations. Based on the company’s performance in the quarter, we have upgraded Merge to a Hold.

Operating income is expected between $3.7 million and $4.4 million, compared to an operating loss of $18.3 million in the year-ago quarter. Net income ranges between $0.1 million and $0.8 million, versus net loss of $18.2 million in the year-ago quarter. EBITDA is expected to be in the range of $2.4 million to $3.1 million, compared to a loss of $14.0 million in the prior year quarter.

Merge Healthcare is a healthcare software and services company focused on integrating radiology workflow to improve productivity, profitability and patient care by fusing business and clinical workflow, and intelligently managing and distributing diagnostic images and information throughout the healthcare enterprise. The company is a leader in transforming film-based radiology images into modern digital images for distribution and diagnostic interpretation.

Merge has recently offered to purchase all outstanding shares of North Carolina-based etrials Worldwide Inc. (ETWC) that provides clinical trials software and services. The offer is a mix of cash and stock valued at over $18.3 million.

The shareholders of etrials Worldwide will receive $0.80 plus 0.3448 shares of Merge for each share of etrials they hold. The exchange offer will expire on July 14. The combined Merge-etrials entity will be able to provide contract research organizations and clinical trial sponsors configurable systems with both critical imaging technologies and electronic clinical capabilities.

Merge Healthcare was badly affected by a cash crunch in the past which was overcome by a much-needed cash infusion of $20 million from Merrick RIS LLC in May 2008. The company was also impacted by management turnover, accounting miscues, and several legal issues.

However, the third quarter of 2008 was the turning point, thanks to the cash infusion and the cost reduction initiatives (headcount reductions). The company has since reported three consecutive quarters of net income.

Merge Healthcare also entered an alliance with a leading healthcare IT provider in China in May 2009. The Chinese government’s recent approval of $20 billion for healthcare IT as part of its healthcare reforms should augur well for Merge.

The U.S. Congress’ approval of more than $20 billion in spending on health-information technology is also likely to benefit the company. However, majority of the spending in the U.S. will be felt between 2011 and 2015.

We think that this will boost the company’s topline from 2011 onwards. Based on the company’s performance in the first quarter of fiscal 2009, we have a ‘Hold’ rating for the Merge Healthcare stock.

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.

GDP (final) contracted by 5.5% in the first quarter to $ 14,097.2 in current dollars, revised downward from the BEA's preliminary Q1 estimate of a 5.7% contraction after falling 6.3% in the 4th quarter of 2008.  The decrease in GDP in the 1st quarter reflected negative contributions from exports (down 30.6%), equipment and software, private inventory investment, nonresidential structures, and residential fixed investment which were partly offset by a positive contribution from personal consumption expenditures which composes nearly 2/3 of the gross domestic product. Imports (down 36.4%), which are a subtraction in the calculation of GDP, decreased.  Coupling the decrease of the 1st quarter with the 4th quarter, this is the worst contraction of GDP this country has experienced in over 60 years.

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What is a Smart-Grid?

"Smart-grids" deliver electricity from suppliers to consumers using digital technology to save energy, reduce costs and increase reliability. Many global governments are promoting such a modernized electricity network as a means of increasing energy independence and reducing global warming issues.

An electricity grid is not a single entity but an aggregate of multiple networks and multiple power generation companies with multiple operators employing varying levels of communication and coordination, most of which are manually controlled.

Smart grids increase the connectivity, automation and coordination between suppliers, consumers and networks, which perform either long distance transmission or local distribution tasks. Transmission networks move electricity in bulk over medium-to-long distances, are actively managed, and generally operate from 400kV to 800kV over AC and DC lines.

Local networks traditionally moved power in one direction, "distributing" the bulk power to consumers and businesses via lines operating at 132kV and lower. This paradigm is changing as businesses and homes begin generating more wind and solar electricity, enabling them to sell surplus energy back to their utilities.

Efficiency Through Technology

Modernization is necessary for energy consumption efficiency; real-time management of power flows; and to provide the bi-directional metering needed to compensate local producers of power. Although transmission networks are already controlled in real-time, many in the US and European countries are antiquated by world standards, and unable to handle modern challenges such as those posed by the intermittent nature of alternative electricity generation, or continental scale bulk energy transmission.

According to Deloitte, in 2009, smart grid providers may represent one of the largest and fastest growing sectors within the "clean," green energy industry. Deloitte forecasts that electricity, as a percentage of total energy consumption, will increase from 9% in 1973 to 16% through 2009.

Additionally, they estimate that modern smart-grids offer approximately twice the efficiency, at 60%, as the average efficiency of the world's legacy electricity grids at  approximately 33%.

Finally, Deloitte estimates that the annual cost  of power outages and power quality disturbances in the U.S. approximates $180 billion.

Likewise, a recent study by the U.S. Department of Energy study estimates that smart-grid modernization of U.S. electricity grids with would save between $46 to $117 billion over the next 20 years.

Among other conclusions, Deloitte deduces through its smart-grid analysis that "[M]ajor manufacturers and utilities should explore partnerships with, and consider acquisitions of, smart energy companies."  Such is the case we now see with Duke Energy and Cisco.

Both Companies Known as Trail-Blazers

At the risk of over-stating the significance of this relationship, particularly for the traditionally staid, 100+ year old electricity industry, both Duke Energy and Cisco rank as consensus innovative leaders in their respective industries. Under terms of the agreement, Cisco seeks to develop and deliver to Duke Energy a state-of-the-art, industry-leading, end-to-end, power plant-to-customer, smart-grid network communications infrastructure.

Empirically speaking, U.S. support for smart-grid technology became federal policy with passage of the Energy Independence and Security Act of 2007. Subsequently, smart-grids received additional support with the passage of the American Recovery and Reinvestment Act of 2009, which appropriated $11 billion for the creation of a smart-grid.

Support from the Federal Government

As recently as January 2009, in his National Address, President Obama requested Congress to pass legislation including the development of new electricity "smart-grids."  On March 19, 2009, The Federal Energy Regulatory Commission (FERC) issued a proposed policy statement and action plan for standards governing the development of a smart-grid. Successful progress toward national implementation of smart-grids continues.

Upon completion, the new, "internet protocol-based open standards" architecture will replace Duke's existing, antiquated analog electric grid with a long-overdue, secure digital backbone infrastructure.

The resultant smart-grid, widely thought to be replicated by other leading energy utilities, will modernize some the most outdated infrastructure in the U.S. - electricity delivery systems - with secure, reliable and efficient data, networks and communications.

The collaboration project will ultimately update the delivery to, and use of electricity by, Duke's 11 million customers served in five states: Ohio, Indiana, North Carolina, South Carolina and Kentucky. Throughout the term of the project, and in subsequent years, Duke will install large-scale new smart-grid technology, including millions of electric and natural gas "smart meters," in addition to hardware and software for distribution.

"Smart meters" replace analog mechanical meters with digital meters which record energy usage in real-time. Smart meters provide a communications pathway extending from generation plants to electrical outlets and other smart grid-enabled devices.

Manifold benefits await Duke Energy and its customers.

The proposed modernized electric grid will:

• Build an 'Energy Internet', which will enable decentralized power generation, so that customers may be both energy clients and suppliers; allow supplier selection of power consumption to offer flexibility to energy consumers;
• Integrate solar and other renewable energy sources into the electric grid;
• Encourage consumers to actively participate in operations of the grid; improve electricity delivery, improve systems efficiency and reliability, increase energy independence, decrease environmental impact, and help customers reduce their energy consumption, strengthen grid security and resist attack;
• Provide higher quality power that will save money wasted from outages;
• Incorporate two-way digital communication to detect power outages and be readily inter-operable, upgradeable and scalable to new emerging technologies.

Going forward, Cisco plans to continue to deliver products and services to support this initiative serving a growing smart grid communications infrastructure market projected by Cisco to reach $20 billion annually over the next five years.

Duke Energy maintains a Street analyst consensus recommendation with a Buy-rated bias; an average long-term EPS growth rate of 4.2%, within a range of 2.0% to 6.0%, and a target price of $15.48 per share, within a range of $14.00 to $20.00 per share.

Cisco Systems boasts a Street analyst consensus Buy rating with an average estimated long-term EPS growth rate of 10.9, within a range of 2.0% to 20.0% and an average target price of $22.38 per share, within a range of $15.00 to $30.00 per share.

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:

Headquartered in Winston-Salem, NC, Hanesbrands Inc. (HBI) is a manufacturer and marketer of innerwear, outerwear, and hosiery apparel, which are sold under the brand names of Hanes, Champion, Playtex, Bali, Just My Size, Barely There, L eggs, Outer Banks, and Wonderbra.

Management's business model requires only modest sales growth to create substantial EPS growth. Earnings are being driven by brand building and cost-reduction initiatives. Since the spin-off in September 2006, the company has reduced debt by $511 million, lowering interest expense from the post spin-off financial structure.

However, management is reporting non-GAAP EPS, which excludes unusual actions, which may be distorting perceived earnings. The Buy rating is maintained due to valuation.

Bear of the Day:

Syneron Medical, Ltd. (ELOS) competes in the very competitive aesthetic devices market. With more than half of its sales derived from the United States, a weak economic outlook leads us to believe that sales growth will slow. As a result, we have reduced our revenue and EPS estimates.

Given the largely discretionary nature of the aesthetics laser business, the outlook could weaken further given current trends in the global economy. We are reducing out target price and recommending a Sell rating for this stock.

Latest Posts on the Zacks Analyst Blog:

GM Files for Bankruptcy

General Motors Corp. (GM) will move forward with four core brands -- Chevrolet, Cadillac, Buick and GMC. The company plans to cut 21,000 employees, about 34 percent of its work force, and reduce the number of dealers by 2,600. We think this is needed and will be good for the company in the long term (and we have been calling for it for some time).

There will be volume weakness in the near term because of this. American Axle & Manufacturing (AXL) and Lear (LEA) are key companies that are negatively impacted.

As a side-note, we upgraded the auto industry from underweight to neutral on Friday, and believe that the worst has now hit the auto industry. The stocks should track the market from this point forward.

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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.

Management's business model requires only modest sales growth to create substantial EPS growth. Earnings are being driven by brand building and cost-reduction initiatives. Since the spin-off in September 2006, the company has reduced debt by $511 million, lowering interest expense from the post spin-off financial structure.

However, management is reporting non-GAAP EPS, which excludes unusual actions, which may be distorting perceived earnings. The Buy rating is maintained due to valuation.Zacks Investment Research

R.H. Donnelley (RHDC) sought bankruptcy protection late on Thursday after slumping advertising sales keeled over the nation's third-largest publisher, already struggling to refinance a huge debt load accumulated through years of acquisitions.

The Yellow Pages publisher filed to reorganize under Chapter 11 bankruptcy law in the U.S. Bankruptcy Court for the District of Delaware with assets of $12.1 billion and liabilities of $12.9 billion. Earlier this month, the company said its creditors and bondholders had agreed to extend the due date for interest payments till May 28.

R.H. Donnelley is not appealing for debtor-in-possession financing as it believes that a combination of $300 million cash on hand and expected cash flow from operations would be sufficient to fund its business during the restructuring. The company has already agreed with key creditors to reduce its debt by around $6.4 billion, purge roughly $500 million in annual interest expense and extend its bank maturities up to 2014.

In a way, the Cary, North Carolina-based company's fate is an indicator of the publishing industry as a whole. As an increasing number of readers shift to the internet, the print industry has taken a beating. In May 2007, before the recession tightened its grip on the economy, R.H. Donnelley was thriving, carrying a $5 billion market capitalization.

Its acquisition spree that started in the beginning of this decade had brought R.H. Donnelley's total liabilities to $12 billion by the end of last year. The company's buyout of Dex Media alone was financed with about $5 billion in debt.

"Our growth-through-acquisition strategy never anticipated the cataclysmic collapse of the U.S. economy and the local advertising market," Chief Executive David Swanson said.

As the economy started showing signs of decelerating, R.H. Donnelley swung to a loss of $2.3 billion from a $46.9 million profit in 2008. Recent attempts to resurface as an online publisher was a positive sign but the debt burden was too large to be siphoned off so soon. After the bankruptcy filing of Idearc Inc last March and now R.H. Donnelley, investors can only hope that there would not be others to follow suit.

Bank of America (BAC) raised an additional $5.9 billion through the conversion of privately-held preferred shares into common stock on Wednesday and said it was "well on its way" to meet the regulatory mandate of plugging nearly $34 billion in capital shortfalls.

With this recent step, the Charlotte, North Carolina-based firm has attained 76% of the daunting task assigned to it by the federal government following a stress test to check its ability to hold up against future loan losses. A portion of the $26 billion that Bank of America has raised came from its sale of 1.25 billion common shares and a partial stake in China Construction Bank before the stock swaps.

The beleaguered banking giant said that none of the preferred shares exchanged for common stock were held by the government as part of the Troubled Asset Relief Program. While Bank of America seems keen to ensure less federal interference in the future, rival Citigroup's (C) plans to convert a part of the government's stake into common stock would make the US government a large shareholder in the New York firm.

Bank of America may also swap another set of non-government preferred shares for common stock depending on market conditions. The largest U.S. bank is also mulling several joint ventures and the sale of non-core assets like First Republic Bank and Columbia Management Group to improve its capital base.

Shares of the company were up nearly 2% to $11.19 at noon on the New York Stock Exchange after touching an intraday high of $11.54 earlier in the session.

Company Description

The Buckle is a retailer of casual apparel, footwear, and accessories for young men and women in the United States. The company's casual apparel products include denims, bottoms, tops, sportswear, and outerwear.

Known as a denim destination, each store carries a wide selection of fits, styles, and finishes from leading denim brands, including the company's exclusive brand, BKE.

Headquartered in Kearney, Nebraska, Buckle currently operates 393 retail stores in 40 states, including the recent opening of 3 new stores in Savannah, Georgia; Newport News, Virginia; and Pineville, North Carolina. BKE also closed one store in fiscal April. The Company operated 374 stores in 39 states as of May 7, 2008.

Stellar Sales

The Buckle recently reported a year-over-year increase of 18.2% in same-store store sales for the month of April. Net sales jumped 25.6% year-over-year, from $47 million to $59.1 million.

On a year-to-date basis, same-store sales grew 17.7% from the year-prior year-to-date period. Year-to-date net sales are up 24.6%.

The company is slated to report first-quarter results on May 21, 2009.

Strong Fundamentals

The Buckle boasts a strong balance sheet with no debt. The company's return on average (ROE) of 29% more than quadruples the industry average of 7%. Its net profit margin of 13% sits high above the industry average of 2%. BKE also offers an industry-leading dividend yield of 2.5%.

Estimates are on the Rise

Analysts are calling for earnings of $2.56 per share for the year ending January 2010, versus last month's forecast of $2.53. The most accurate estimate is more bullish at $2.63.

For the following year, analysts project earnings of $2.62, up from last month's $2.53. The most accurate estimate accurate forecast is a higher $2.89. Zacks Investment Research

Company Description

Family Dollar is a discount retail chain operator in the United States. Family Dollar offers a core assortment of name-brand and quality consumable merchandise supplemented by fashion and seasonal merchandise. A Fortune 500 company that is based in Matthews, North Carolina, FDO operates more than 6,500 stores in 44 states.

Rising Forecasts

Brokerage analysts lifted estimates over the past month, projecting earnings growth of 19% for the fiscal year ending August 2009, which translates into earnings of $1.97 per share. Last month, earnings expectations stood at $1.89. For the following year, earnings projections of $2.15 per share are up from last month's $2.06 and reflects annual growth of 9%.

Solid Income

The company recently declared a quarterly dividend of $0.135 per share, noting that it is payable July 15 to shareholders of record at the close of business on June 15. FDO's dividend yield of 1.7% is well ahead of the industry average.

Outstanding Quarterly Results

Family Dollar posted fiscal second-quarter earnings of 60 cents per share, beating the previous year's 45 cents and matching the consensus estimate.

Management stated that, while the current environment has resulted in more budget-minded consumers, the company's strong performance is also the result of significant investments in the enhancement of the Family Dollar shopping experience. Zacks Investment Research

Investors in Bank of America Corp. (BAC) remained confident of the firm's ability to meet about $35 billion in capital shortfalls, that regulatory stress tests reportedly indicated, by selling its assets or converting the government's preferred shares into common stock.

While official results of the stress tests are due Thursday, leaked reports said that executives of the country's largest bank by assets have already objected to preliminary findings on capital requirement.

According to industry experts, the easiest remedy to the Charlotte, North Carolina-based firm's problem would be through conversion of preferred shares it sold to the U.S. Treasury during its takeover of Merrill Lynch & Co. However, converting $34 billion into common shares would not only dilute the bank's existing common shareholders but also make the U.S. government one of its largest shareholders.

Other sources indicate that Bank of America is considering selling a part of its stake in China Construction Bank immediately. Whatever decision the bank finally adopts to fill the large capital hole, it would definitely weigh most on Chief Executive Ken Lewis, who has already been ousted from the chairman's seat by angry shareholders.

Shares of the company were up more than 10% to $11.97 at noon on the New York Stock Exchange. They had touched an intraday high of $12.05 earlier in the session.

Bank of America Corp. (BAC) shareholders voted to unseat Kenneth Lewis as chairman of the largest U.S. bank in a move which industry experts said could weaken his powers as chief executive and eventually lead to his being stripped off that title as well.

At the Charlotte, North Carolina-based firm's annual meeting on Wednesday, a third of shareholders opposed Lewis' re-election to the board. While Bank of America assured that Lewis would remain in the driver's seat in terms of daily administration of the company, 16-year board veteran Walter E. Massey was named as his replacement in the chairman's role.

The annual meeting continued for 4 hours as angry shareholders held the management accountable for accepting two government bailouts and not providing them with enough disclosure on deepening losses at Merrill Lynch before signing the deal.

Massey, who has been appointed with the responsibility of overseeing Lewis, is not an experienced financial executive, but an academic. He has also been seen as someone likely to back Lewis on key decisions. Investors, however, applauded the move and took shares up nearly 5% to $9.10 in midday trading on the New York Stock Exchange.