On Tuesday, the 30-stock Dow Jones industrial average closed down 17.53 points, or 0.18%, to 9,771.91.  The broad Standard & Poor's 500-stock index added 2.53 points, or 0.24%, to 1,045.41 and the tech-heavy Nasdaq advanced 8.12 points, or 0.40%, to 2,057.32.  On the NYSE, volume slowed to 1.38 billion shares.  

The news of a sale of 200 tons of gold to India sent gold futures surging $32.10 to $1086.  Treasury prices declined with the 10-year off 16/32 to 101-08/32 and the corresponding yield surging to 3.47% from 3.41% Monday.      

Burlington Northern (NYSE:BNI) surged 28% to $97 after the $26 billion offer from Berkshire.  Technology stocks were under pressure following a Morgan Stanley (NYSE:MS) analyst downgrade of semiconductor companies. Intel (NASDAQ:INTC), the world’s biggest computer-chip maker, fell 2.7% to $18.50 and Novellus Systems Inc. (NASDAQ:NVLS) declined 5.2% to $19.71.  Shares in basic materials, oil and gas and industrials rose 1.8%, 1.5%, and 1.3%, respectively in yesterday's trade.  Meanwhile, automakers reported October sales numbers mostly higher from a year ago.  General Motors (NYSE:GM) posted its first y/y sales gain, in nearly two years, as its sales rose 5%; Ford (NYSE:F) said its sales rose 3%; Toyota (NYSE:TM) sales, although flat, were ahead of estimates of a 6% decline.  Chrysler sales fell 30%.

Nevertheless, corporate earnings so far have continued to beat Wall Street estimates, with 84% of the S&P500's 358 firms reported so far currently beating Street estimates.  Meanwhile, the S&P 500 is currently trading 55% above its 12-year low hit on March 9. 

Today’s earnings calendar includes quarterly reports from the following: Comcast (NASDAQ:CMCSA), Time Warner (NYSE:TWX), News Corp. (NYSE:NWS), Prudential (NYSE:PRU), Qualcomm (NASDAQ:QCOM), Devon Energy (NYSE:DVN), and Becton Dickinson (NYSE:BDX).

The acquisition would transfer the majority holding from Singapore investment agency, Temasek (Moody’s rating Aaa) to ATIC (Abu Dhabi’s sovereign rating Aa2).

Analysts differed on how the acquisition would affect Advanced Micro Devices (AMD), which had earlier united with ATIC to form Globalfoundries. Although Chartered and Globalfoundries will continue to operate as separate entities, increased scale of operations could result in cost synergies. Since AMD includes Globalfoundries in its consolidated results, the deal could shorten its road to profitability.

The deal would also open up Globalfoundries to several big customers, such as Microsoft Corp. (MSFT), Broadcom Corp. (BRCM), Marvell Technology Group (MRVL) and Texas Instruments (TXN). Its end market exposure would rise with the addition of communications and gaming to the computing and select consumer space.

Opinions are divided on whether the acquisition would bring significant technology enhancements. While the deal should bring some benefit in general, we don’t expect it to be adequate to overcome competition. The foundry space is dominated by Taiwan Semiconductor Manufacturing Co. (TSMC) and United Microelectronics (UMC), which together serve around two-thirds of the total market.

While TSMC has strong customer relationships with the likes of Intel Corp. (INTC), Qualcomm (QCOM), NetLogic Microsystems (NETL) and NVIDIA Corp. (NVDA), which have brought it to the number one position, UMC is the most commonly selected second source.

AMD management reconfirmed that there would be no breach of the x86 licensing agreement with Intel. They also expressed optimism regarding probable cost benefits from superior scale of operations.

Qualcomm continues to lead mobile video market with the deployment of MediaFLO networks (that offers FLO TV services). In June, the mobile TV industry received a boost when the US government decided to switch to digital TV from analog transmission.

The immediate beneficiary of this was Qualcomm’s FLO TV network, which has already spent $500 million to buy spectrum that has been released. The company will now have the opportunity to broadcast its transmission in 100 major US markets serving more than 250 million potential customers. According to industry researches, market size for mobile TV may reach $10 billion by 2013 from $1.5 billion in 2008.

Advertisement in the mobile TV network is gaining huge market traction for the corporate world. Since each mobile device is connected to a specific viewer, the scope for audience-specific advertisement is enormous in this industry. Rentrak’s TV Essentials media management system will provide relevant viewership information on FLO TV network to several advertisers and content developers.

FLO-TV has been offered by the two largest telecom operators in the U.S., AT&T (T) and Verizon Wireless (VZ). The company has bought select licenses in the FCC auctions for 700-Mhz spectrum. Qualcomm has also started a trial run of FLO TV in Taiwan in collaboration with Taiwan Television Enterprise Ltd. and China Network Systems. Successful delivery may result in further business opportunities in the vast Asian market.

To bolster its position, Qualcomm has entered multi-year licensing agreements with large media content/broadcaster companies to provide TV programs through the FLO TV mobile entertainment platform. CBS, CBS College Sports, CBS News, CNBC, Comedy Central, ESPN, ESPN News, ESPN 2, FOX, FOX News, FOX Sports, MSNBC, MTV, NBC, NBC 2Go, NBC News, NBC Sports and Nickelodeon are the channels which have joined hands with FLO TV.

MiFi is an ultra-portable wireless device, creating an environment of high-speed internet connectivity that can be easily shared by multiple users using up to five Wi-Fi devices. Novatel has developed MiFi for both EV-DO and HSPA standards.
 
The release of this interface will enable software developers to use MiFi’s open CGI to access the on-board processing capabilities of this intelligent mobile hotspot. Novatel has decided to develop an open platform ecosystem based on MiFi technology for applications and services delivery.

The company is working with Alcatel-Lucent (ALU) to integrate its Nonstop Laptop Guardian platform on the HSPA version of MiFi. Novatel is also commercializing the first phase of its own content delivery portal supported by the MiFi platform. MiFi devices will contain this intelligent server application.

This development will include portals providing customized content. Novatel will generate recurring revenue by selling mobile content to its carrier customers.
 
Novatel has begun shipment of MiFi to Verizon Wireless (VZ), Telefonica SA (TEF), and Sprint-Nextel (S). CradlePoint Technology, a provider of 3G and 4G networks solutions, announced that its routers have become MiFi compatible. Novatel has also entered into an agreement with Moblix to sell MiFi products in Central & Eastern Europe, and the Middle East using Moblix’s reseller channel.
 
We believe this unique product line will give Novatel a competitive advantage over Sierra Wireless (SWIR) and Kyocera Corp. (KYO) in its traditional mobile data access card market. This is particularly important as several large telecom equipment makers like Qualcomm (QCOM), L.M. Ericsson (ERIC), and Huawei.

Technologies have entered the mobile computing market with advance chipsets that combine broadband modem technology compatible with high-speed 3G networks. We reiterate Buy recommendation for Novatel Wireless.

Chicago, IL – July 20, 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: Intel Corp (INTC), ARM Holdings (ARMH), Advanced Micro Devices (AMD), Qualcomm (QCOM) and Texas Instruments (TXN).

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:

How Mobile is Intel?

Just as Intel Corp (INTC) has a dominant position in the microprocessor market for computers, ARM Holdings (ARMH) has the most widely used technology in cell phones and other mobile devices. Intel’s desire to go beyond its home ground may be traced to the maturing state of the enterprise type PC market and the much stronger growth rates in cell phones and mobile internet devices.

The higher demand has been driven by a sea change in technologies driving consumer electronics products that have virtually created demand for a completely new species. Consumers now want greater functionality, connectivity, portability, lower power consumption, smaller sizes and all this at a much lower cost.

What Intel wants to achieve requires a paradigm shift. In the PC market it enjoys a special position at system integrators that have for long kept Advanced Micro Devices (AMD) at bay. Being the financially stronger party, it is able to make higher investment in R&D and also see the investment converted to sales.

However, the market is heating up and AMD’s recent alliance should help it generate much needed volumes. What that could mean for the AMD bottom line is a different story. But it should definitely begin to create a larger dent in Intel’s revenues.

The cell phone market is vastly different. Here Intel is in AMD’s shoes, despite its financial strength and ARM processors rule the day. ARM chips are already packaged and sold by the likes of Qualcomm (QCOM), Samsung and Texas Instruments (TXN) and are the processors of choice for nearly 90% of all cell phones on the market today.

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/ZacksInvestment

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 

Chicago, IL – July 20, 2009 – Zacks.com announces the latest Industry Outlook. Today’s outlook from Zacks Equity Research analyst David Weissman discusses the Telecom sector. Highlighted stocks include: Qualcomm (QCOM) and China Mobile (CHL).

In our view, companies showing significant net-cash positions become attractive in volatile markets. It is important to consider balance sheet conditions that may limit the vulnerability of telecom companies in weak economies. This is perhaps at least as important as metrics that track earnings growth, but often do not consider overall market declines.

With the S&P 500 P/E between 10 and 12 times earnings, valuation targets that were provided by analysts based on earnings growth parameters have not been effective in guiding investment recommendations during market tailspins.

This leads us to recommend selected net cash positive companies able to weather financial market volatility. Companies that match well with the aforementioned considerations include Qualcomm (QCOM) and China Mobile (CHL). These entities have significant cash, and each has unique exposure to wireless and international business, along with strong balance sheet positions to sustain their expansion initiatives.

Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5510.

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=5511.

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

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

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 

Chicago, IL – July 20, 2009 – Zacks.com releases the list of companies likely to issue earnings surprises. This week’s list includes Caterpillar (CAT), Texas Instruments (TXN), Intersil (ISIL), Qualcomm (QCOM) and Tractor Supply (TSCO). To see more earnings analysis, visit http://at.zacks.com/?id=3207.

Every day, Zacks.com makes 4 stock picks available, free of charge. To see them, go to http://at.zacks.com/?id=5612.

This Week's Events

Earnings season will hit full stride with reports from nearly 500 companies. Approximately 1 out of every 4 earnings release will be from a firm in the financial sector.

Large-cap stocks will once again dominate the headlines, as 139 S&P 500 members are on the docket. Caterpillar (CAT) and many other Dow components are included in this group.

The highlight of the economic calendar will be Ben Bernanke's semi-annual report on monetary policy (aka Humphrey-Hawkins). The Fed Chairman will appear before a House committee on Tuesday and a Senate committee on Wednesday.

Otherwise, there will not be much news on the economic front.

• Monday: June Leading Indicators
• Wednesday: weekly crude inventories
• Thursday: weekly initial jobless claims
• Friday: Revised July University of Michigan consumer sentiment

Atlanta Fed President Dennis Lockhart will discuss his economic outlook with the Rotary Club of Nashville on Monday. No other Fed officials are scheduled to speak.

The market really has not reacted much to better-than-expected earnings. Though a big rally did occur last Wednesday, volume outside the semiconductor group was generally light. And yesterday's afternoon rally was in reaction to comments made by Nouriel Roubini that were taken out of context.

This raises the possibility that we could see more of the same for the coming week, especially given how trades have not expressed joy over blowout earnings from some of the largest financial firms so far.

If there is going to be a move to the upside, tech will have to be the catalyst. And we do have a handful of large-cap tech companies reporting (e.g. Texas Instruments (TXN), so there is the possibility of some good daily moves.

But, investors should continue to eye volume, which continues to signal a willingness among many to simply sit on the sidelines.

Companies That Could Issue Positive Earnings Surprises

Intersil (ISIL) raised its second-quarter revenue guidance late last month. The majority of the covering analysts responded by hiking their quarterly profit projections. These revisions led to a 5-cent increase in the consensus earnings estimate, to 9 cents per share. The semiconductor company has topped expectations during 5 out of the last 6 quarters. Intersil is scheduled to report on Wednesday, Jul 22, after the close of trading.

Qualcomm (QCOM) is a riskier pick, given that it has disappointed investors for 2 consecutive quarters. But, the company did raise its fiscal third-quarter guidance last month, citing strong demand for wireless broadband. Furthermore, one analyst upped his quarterly forecast this week. The consensus estimate now calls for profits of 45 cents per share (up 2 cents from a month ago). The most accurate estimate is more bullish at 46 cents per share. Qualcomm is scheduled to report on Wed, Jul 22, after the close of trading.

Last month, Texas Instruments (TXN) updated its second-quarter forecast. This resulted in a sharp increase in the consensus estimate to 19 cents per share, the midpoint of TXN's suggested range. Could this forecast still be too conservative? Judging by the fact that 2 brokerage analysts just raised their second-quarter forecasts and the bullish results from other chip makers, the answer could well be yes. TXN has topped expectations for 2 consecutive quarters. Texas Instruments is scheduled to report on Monday, Jul 20, after the close of trading.

Tractor Supply (TSCO) anticipates reporting second-quarter earnings of $1.48 to $1.50 per share. The recent guidance was far above the consensus estimate and caused all of the covering analysts to revise their projections. Though the consensus estimate now calls for profits of $1.49 per share, there is still room for further upside given TSCO's streak of 4 consecutive positive earnings surprises. Tractor Supply is scheduled to report on Wednesday, Jul 22, after the close of trading.

Companies That Could Issue Negative Earnings Surprises

Caterpillar (CAT) has disappointed investors during 2 out of the last 3 quarters. Though the slowing pace of economic contraction should be a positive for CAT, 5 analysts have cut their second-quarter profit forecasts within the past 30 days. The revisions have caused the consensus earnings estimate to fall by 3 cents to 21 cents per share. The most accurate estimate is more bearish at 14 cents per share. Caterpillar is scheduled to report on Tuesday, Jul 21, before the start of trading.

Charles Rotblut, CFA, is the senior market analyst for Zacks.com.

About the Zacks Rank

Since 1988, the Zacks Rank has proven that "Earnings estimate revisions are the most powerful force impacting stock prices." Since inception in 1988, #1 Rank Stocks have generated an average annual return of +26%. During the 2000-2002 bear market, Zacks #1 Rank stocks gained +43.8%, while the S&P 500 tumbled -37.6%. Also note that the Zacks Rank system has just as many Strong Sell recommendations (Rank #5) as Strong Buy recommendations (Rank #1). Since 1988, Zacks Rank #5 stocks have underperformed the S&P 500 by 111% annually (-0.8% versus +8%). Thus, the Zacks Rank system allows investors to truly manage portfolio trading effectively.

Zacks "Profit from the Pros" e-mail newsletter offers continuous coverage of the industries and the stocks poised to outperform the market. Subscribe to this free newsletter today by visiting http://at.zacks.com/?id=5614.

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 by going to http://at.zacks.com/?id=5615.

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

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

Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.

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

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

Contact: Charles Rotblut, CFA
Company: Zacks.com
Phone: 312-265-9352
Email: pr@zacks.com
Visit: www.Zacks.com 

Based on extreme industry weakness in late 2008 and early 2009, we believe valuation levels now reflect remedial conditions in the economy. Depressed stock prices foster more favorable entry points at this juncture as government stimulus plans and restricted operating expenses may drive opportunities for improved earnings.

Telecom companies are starting to report minimal financial improvements in terms of revenue and earnings levels. In addition, economic stimulus plans throughout the world, including the U.S. broadband infrastructure development program -- and similar structural subsidies in China and India -- may be a boon for selected service providers and equipment manufacturers.

Telecom carriers and equipment providers that offer the most attractive opportunities are focused on third-generation (3G) wireless, broadband (DSL) and fiber-to-the-home/node networking. There are also a few market leaders that have proven able to survive the sometimes turbulent opportunity swings in the industry.

It is our belief that at this uncertain stage of macroeconomic events, companies with strong balance sheets and firm net cash positions, along with sustainable dividends, provide respectable risk/reward profiles. On the other hand, highly-leveraged companies should be avoided, at least at this possible economic inflection point.

OPPORTUNITIES

The transient collapse of financial markets has become an indelible lesson to many of us. With this, we have seen that sector diversity is a less secure planning tool in today's increasingly correlated world markets.

However, there are some tactics and opportunities that may be appropriate to address the downturns in the telecom industry, should we be greeted with them again. We consider the following:

Necessity for Telecommunications - The need for telecom in both rural and urban areas, and its role in the infrastructure of both developed and developing markets, continues to grow. Wireless infrastructures and/or low-cost integrated IP voice and data wireline networks are necessities.

In fact, most global subscribers will not give up their wireless phones and services that easily, although upgrades to advanced (high-end) handsets/offerings may be sensitive to overall consumer/business budgets. This is accompanied by telecom carriers' continued quest for operational flexibility and streamlining.

International Diversification - While country diversification offers only limited protection in the current highly-correlated world equity markets, it offers hedging capabilities from local economic weakness and associated currency exchange differentials. Therefore, a significant allocation of foreign telecom companies would be appropriate as part of a technology-focused portfolio.

Balance Sheet Positions - In our view, companies showing significant net-cash positions become attractive in volatile markets. It is important to consider balance sheet conditions that may limit the vulnerability of telecom companies in weak economies. This is perhaps at least as important as metrics that track earnings growth, but often do not consider overall market declines.

With the S&P 500 P/E between 10 and 12 times earnings, valuation targets that were provided by analysts based on earnings growth parameters have not been effective in guiding investment recommendations during market tailspins.

This leads us to recommend selected net cash positive companies able to weather financial market volatility. Companies that match well with the aforementioned considerations include Qualcomm (QCOM) and China Mobile (CHL). These entities have significant cash, and each has unique exposure to wireless and international business, along with strong balance sheet positions to sustain their expansion initiatives.

RISKS AND WEAKNESSES

Generally, telecom companies that have exhibited significant degrees of valuation decline have had high debt levels and large financial leverage ratios. These companies, while offering recurring cash flow to service their debt obligations, may have difficulties should overall business decline as consumers and businesses become more selective with their spending behavior. Risks that still remain include the following:

Potential Business Slowdown - Lower overall top-line sales among carriers that would justify a proportional reduction in capital expenditures.

Exacerbated Borrowing with Credit & Loans - Over the near-term, telecom companies may be exposed to high debt levels and limited liquidity.

Economic Impact Straining Consumer & Business Spending - Telecom companies that would have free cash flow impacted by slowdown in demand. (Sustainable cash flow is required to service debt obligations and may be severely impacted by pessimistic business projections). Zacks Investment Research

Based on extreme industry weakness in late 2008 and early 2009, we believe valuation levels now reflect remedial conditions in the economy. Depressed stock prices foster more favorable entry points at this juncture as government stimulus plans and restricted operating expenses may drive opportunities for improved earnings.

Telecom companies are starting to report minimal financial improvements in terms of revenue and earnings levels. In addition, economic stimulus plans throughout the world, including the U.S. broadband infrastructure development program -- and similar structural subsidies in China and India -- may be a boon for selected service providers and equipment manufacturers.

Telecom carriers and equipment providers that offer the most attractive opportunities are focused on third-generation (3G) wireless, broadband (DSL) and fiber-to-the-home/node networking. There are also a few market leaders that have proven able to survive the sometimes turbulent opportunity swings in the industry.

It is our belief that at this uncertain stage of macroeconomic events, companies with strong balance sheets and firm net cash positions, along with sustainable dividends, provide respectable risk/reward profiles. On the other hand, highly-leveraged companies should be avoided, at least at this possible economic inflection point.

OPPORTUNITIES

The transient collapse of financial markets has become an indelible lesson to many of us. With this, we have seen that sector diversity is a less secure planning tool in today's increasingly correlated world markets.

However, there are some tactics and opportunities that may be appropriate to address the downturns in the telecom industry, should we be greeted with them again. We consider the following:

Necessity for Telecommunications - The need for telecom in both rural and urban areas, and its role in the infrastructure of both developed and developing markets, continues to grow. Wireless infrastructures and/or low-cost integrated IP voice and data wireline networks are necessities.

In fact, most global subscribers will not give up their wireless phones and services that easily, although upgrades to advanced (high-end) handsets/offerings may be sensitive to overall consumer/business budgets. This is accompanied by telecom carriers' continued quest for operational flexibility and streamlining.

International Diversification - While country diversification offers only limited protection in the current highly-correlated world equity markets, it offers hedging capabilities from local economic weakness and associated currency exchange differentials. Therefore, a significant allocation of foreign telecom companies would be appropriate as part of a technology-focused portfolio.

Balance Sheet Positions - In our view, companies showing significant net-cash positions become attractive in volatile markets. It is important to consider balance sheet conditions that may limit the vulnerability of telecom companies in weak economies. This is perhaps at least as important as metrics that track earnings growth, but often do not consider overall market declines.

With the S&P 500 P/E between 10 and 12 times earnings, valuation targets that were provided by analysts based on earnings growth parameters have not been effective in guiding investment recommendations during market tailspins.

This leads us to recommend selected net cash positive companies able to weather financial market volatility. Companies that match well with the aforementioned considerations include Qualcomm (QCOM) and China Mobile (CHL). These entities have significant cash, and each has unique exposure to wireless and international business, along with strong balance sheet positions to sustain their expansion initiatives.

RISKS AND WEAKNESSES

Generally, telecom companies that have exhibited significant degrees of valuation decline have had high debt levels and large financial leverage ratios. These companies, while offering recurring cash flow to service their debt obligations, may have difficulties should overall business decline as consumers and businesses become more selective with their spending behavior. Risks that still remain include the following:

Potential Business Slowdown - Lower overall top-line sales among carriers that would justify a proportional reduction in capital expenditures.

Exacerbated Borrowing with Credit & Loans - Over the near-term, telecom companies may be exposed to high debt levels and limited liquidity.

Economic Impact Straining Consumer & Business Spending - Telecom companies that would have free cash flow impacted by slowdown in demand. (Sustainable cash flow is required to service debt obligations and may be severely impacted by pessimistic business projections). Zacks Investment Research

The higher demand has been driven by a sea change in technologies driving consumer electronics products that have virtually created demand for a completely new species. Consumers now want greater functionality, connectivity, portability, lower power consumption, smaller sizes and all this at a much lower cost.
 
What Intel wants to achieve requires a paradigm shift. In the PC market it enjoys a special position at system integrators that have for long kept Advanced Micro Devices (AMD) at bay. Being the financially stronger party, it is able to make higher investment in R&D and also see the investment converted to sales.

However, the market is heating up and AMD’s recent alliance should help it generate much needed volumes. What that could mean for the AMD bottom line is a different story. But it should definitely begin to create a larger dent in Intel’s revenues.
 
The cell phone market is vastly different. Here Intel is in AMD’s shoes, despite its financial strength and ARM processors rule the day. ARM chips are already packaged and sold by the likes of Qualcomm (QCOM), Samsung and Texas Instruments (TXN) and are the processors of choice for nearly 90% of all cell phones on the market today. Even new operating systems, such as Google’s (GOOG) Android have been specially built to fit in with ARM architecture.

Intel’s problems are not limited to its x86 architecture, which is incompatible with many proprietary cell phones. The company has actually yet to come out with a satisfactory product for the market. The Atom is more of a computing chip, sort of a bridge between the two worlds.

By Intel’s own admission, the company will not be able to make an impression on the cell phone market before the advent of Moorestown. The power savings offered by Moorestown could make the Intel chip more appropriate for the cell phone market. Critics argue that the Cortex A9 from ARM could be shipping by then, which could maintain ARM’s supremacy.
 
However, Intel’s strategy goes deeper. The company has gone beyond handsets to the growing mobile internet devices (MID) market. According to research firm Forward Concepts, MID shipments will grow from 305,000 units in 2008 to 40 million units in 2012. The research firm expects chip companies serving the market to gain big time, growing from $29 million in 2008 to $2.6 billion in 2012.

Intel is expected to be the biggest winner with its x86 microarchitecture. The non-x86 gainers are likely to be Texas Instruments and Qualcomm.
 
Intel has also been developing the Moblin software platform for Atom based netbooks and nettops using open source technology from Linux. The beta version boasts the latest open source graphics technology; social networking (only Twitter and Last.fm at present); Mozilla browser (for Internet access, video embedding and the latest flash plug-in); zoomable media player, and a user interface for connection management.

Moblin will also be of great strategic importance when Intel is ready to enter the handset market through the recently announced Nokia (NOK) alliance.

Baseband is a generic term used to describe the central application processor that controls and handles most of the digital functions within a handset. Baseband manufacturers face the dual issues of a commoditized market and rapidly increasing development costs. This is because, as features are added to phones, the complexity and cost of manufacturing DSPs are further increased.
 
Previously, in the 3G manufacturing process, custom-made baseband chips provided cell phone makers a competitive advantage. But as the 3G production cycle matured, this competitive edge was lost and the demand for standard chips such as those made by Qualcomm became more popular.

Currently, it makes much more sense for a handset manufacturer to go for standardized chips to drive volumes, rather than custom made chips for a more differentiated product. Infineon, Broadcom (BRCM) and Mediatek (the fourth largest player) were the other direct beneficiaries of the change. STMicroelectronics (STM), the third largest player, shifted focus from custom-made to standardized baseband chips and therefore did not lose much on account of the change.
 
TI was the worst affected, both because of the increasing cost and the loss of customers to their second sourcing strategy. Consequently, management announced its decision to sell off the merchant baseband business last year. However, buyers are hard to come by and management finally decided not to sell the business outright, but continue serving existing customers. The business would instead be phased out by 2012.

For TI, the sale makes sense, since it would save $200 million a year. Management is also optimistic about growth in the increasingly crowded analog market. Its OMAP processors are expected to be a great success and one wonders whether they will be integrated into a baseband chip in days to come.

Yesterday, Novatel entered into an agreement with Moblix to sell MiFi products in Central & Eastern Europe and the Middle East using Moblix’s reseller channel. 3G mobile broadband networks are being increasingly deployed in these regions by several telecom carriers.

MiFi is an ultra-portable wireless device, creating an environment of high-speed internet connectivity that can be easily shared by multiple users using up to five Wi-Fi devices. Novatel has developed MiFi for both EV-DO and HSPA standards and has also begun shipment to Verizon Wireless (VZ) and Telefonica SA (TEF). Another major U.S. carrier, Sprint-Nextel (S) has also announced a deal with Novatel to launch MiFi.

According to our assessment, diversification into this unique product line gives Novatel a comparative advantage over Sierra Wireless (SWIR) and Kyocera Corp. (KYO) in its traditional mobile data access card market. This is particularly important as several large telecom equipment makers like Qualcomm (QCOM), L.M. Ericsson (ERIC), and Huawei Technologies have entered the mobile computing market with advance chipsets that combine broadband modem technology compatible with high-speed 3G networks.

Novatel has decided to develop an open platform ecosystem based on MiFi technology for applications and services delivery. The company is working with Alcatel-Lucent (ALU) to integrate its Nonstop Laptop Guardian platform on the HSPA version of MiFi.

Novatel is also commercializing the first phase of its own content delivery portal supported by the MiFi platform. MiFi devices will contain onboard this intelligent server application. This development will include portals providing customized content.

Novatel will generate recurring revenue by selling mobile content to its carrier customers. We reiterate our Buy recommendation for Novatel.

Qualcomm Inc. (QCOM), the largest developer of digital mobile chipsets based on CDMA wireless technology, has decided to collaborate with Chinese telecom equipment provider ZTE Corp to upgrade the capacity and performance of UMTS system. UMTS (Universal Mobile telecommunications System) is a 3G wireless technology that uses W-CDMA, TD-CDMA, and TD-SCDMA as the underlying air-interface.

The Qualcomm-ZTE joint venture will try to integrate Qualcomm's Uplink Interference Cancellation technology into ZTE's next-generation UMTS base station products. This will allow the mobile service providers to boost their UMTS data throughput by up to 60% and also increase voice capacity by up to 45%.

We believe this partnership will help Qualcomm to expand its business in the Chinese wireless market. The three major telecom operators in China, viz, China Mobile (CHL), China Unicom (CHU) and China Telecom (CHA) are quickly expanding their respective 3G networks based on TD-SCDMA technology.

China is the largest wireless market in the world with respect to subscriber count. At the end of May 2009, China had nearly 680 million wireless subscribers and a penetration of approximately 45%. It is estimated that the number of mobile users in this region may surpass 750 million by 2010. Therefore, Qualcomm has significant business opportunities in China.

Outside China, UMTS is a well-established wireless technology in Western Europe and Japan. The high-speed UMTS network is now primarily utilized for internet access, either directly on a mobile handset or connected to a computer via Wi-Fi, Bluetooth, Infrared and USB. We reaffirm our Buy recommendation for Qualcomm.

Intel (INTC) and Nokia (NOK) have joined hands to tap the smart phone and MID market. Nokia will use the Atom processor in its smart phones and mobile Internet devices going forward, even as Intel licenses Nokia's 3G HSPA modem technology.

The two companies have used open source software from Linux to develop their respective mobile platforms. The strategic relationship is expected to enable Intel's Moblin (currently in beta stage) and Nokia's Maemo to incorporate several open source applications, such as oFono, ConnMan, Mozilla, X.Org, BlueZ, D-BUS, Tracker, GStreamer and PulseAudio through some co-coordinated effort. The association will also enhance device functionality for both in terms of Internet connectivity, wireless communication, superior graphics and comprehensive multimedia capabilities.

Nokia currently holds about 40% share of the mobile phone market and a 34% market share in smart phones. The partnership should, therefore, be of great strategic importance for Intel. Additionally, Intel's long-range plans of entering the mobile phone market will obtain further impetus from the licensed modem technology.

Intel has a comprehensive mobile roadmap, with Moorestown closely designed to follow Atom later this year, and then Medfield by early 2010. Power efficiency is expected to improve with each successive platform. We expect the Wind River acquisition to play a key role in the company's mobile plans.

Although it is still too early, the collaboration could be bad news for companies like Qualcomm (QCOM) and ARM, who have been shipping processors to Nokia. The Maemo is still under development, but enhancements could put up stiff competition for the Android operating system developed by Google (GOOG), or the blackberry which uses QCOM chipsets and ARM processors) developed by Research In Motion (RIMM), or even the iphone developed by Apple (AAPL).

Pre-market futures suggest a flat opening as traders look for concrete signs of an economic recovery, amid fears of increased government interventions and a crushed economic rebound.

Commodities and financial shares led the decliners yesterday, but healthcare stocks rose after Democratic leaders began working on a healthcare overhaul that would make it mandatory for all Americans to have health insurance coverage.  Shares traded in a narrow range, swinging between gains and losses.  Among S&P industry groups, financials led the declining issues with a 2.2% fall.  Oil and basic materials both recorded a 1.6% fall.  Stocks of consumer services companies gained 1.1%, with drug retailers rising 2.3%.

Among financial sector issues, Bank of America (NYSE:BAC) fell 3.4%, Citigroup (NYSE:C) plunged 5.2% and Wells Fargo (NYSE:WFC) recording a 5.4% decline.  JP Morgan (NYSE:JPM), Goldman Sachs (NYSE:GS), State Street (NYSE:STT) and Morgan Stanley (NYSE:MS) repaid funds borrowed under the government's TARP program.  The Obama Administration's proposed plan for a major financial system overhaul to counter the "cascade of mistakes and missed opportunities of the past decade," however, could not boost sentiments, even as $68 billion of TARP funds were repaid on Wednesday.  S&P, on its part, cited less favorable conditions industry-wide and greater volatility in financial markets for its decision to lower ratings on banks. Banks mentioned included Regions Financial (NYSE:RF), Wells Fargo (NYSE:WFC), Capitol One Financial (NYSE:COF) and PNC (NYSE:PNC).

Technology stocks, nevertheless, showed some resistance, riding high on a number of analyst upgrades and a better-than-expected forecast from Adobe Systems (NASDAQ:ADBE). Merrill/BoA upended its rating on Texas Instruments (NYSE:TXN) from "underperform" to its US I Focus List with a $27 target, noting its expected margin expansion even as the firm faces only modest cyclical recovery prospects. Qualcomm (NASDAQ:QCOM) rose after Goldman Sachs (NYSE:GS) added the firm to its conviction buy list, citing a raised global handset forecast along with an undervalued royalty business.

Chevron (NYSE:CVX) shares declined 1.5% after weekly crude stockpiles showed a larger-than-expected decline of 3.87 million barrels.

Among corporate releases slated for today are JM Smucker (NYSE:SJM) and Discover Financial Services (NYSE:DFS); Research in Motion (NASDAQ:RIMM) is expected to report results after today's close. Treasury Secretary Geithner is scheduled to testify in a House committee hearing on financial regulation. Jefferies' Healthcare Conference continues for its third and final session.

* According to a WSJ report, Goldman Sachs (NYSE:GS) has reportedly delivered a letter to congress advising of plans to repay funds borrowed under TARP sometime tomorrow.  JP Morgan (NYSE:JPM) and Morgan Stanley (NYSE:MS) are expected to repay their borrowings as early as today

* According to a WSJ report, Sanofi-Aventis (NYSE:SNY) is seeking a mega-deal in the US, which could include such possible candidates as: Bristol-Meyers-Squibb (NYSE:BMY), Amgen (NASDAQ:AMGN), Allergan (NYSE:AGN), or Biogen (NASDAQ:BIIB)

* Nucor (NYSE:NUE) said it expects a second-quarter loss of 55 cents to 65 cents a share, versus estimates of a 69 cent loss, citing benefits from cost cuttings and recent strengthening in order entry

* Texas Instruments (NYSE:TXN) received an analyst upgrade from Merrill Lynch, expecting strong margin expansion. Price target was raised to $27 from $18

* Qualcomm's (NASDAQ:QCOM) rating was lifted to a "conviction buy" at Goldman Sachs (NYSE:GS) with a price target of $53

* McDonald's (NYSE:MCD) posted comparable sales numbers for May of 5.1%, which failed to equal April's 6.9% advance

* Goldman Sachs (NYSE:GS) downgraded shares of Burlington Northern (NYSE:BNI), and raised CSX (NYSE:CSX)

* Morgan Stanley (NYSE:MS) downgraded shares of Nucor (NYSE:NUE)

* Google (NASDAQ:GOOG) and eBay (NASDAQ:EBAY) will present at the Credit Suisse (NYSE:CS) convergence conference

* Qualcomm (NASDAQ:QCOM) will present at the UBS (NYSE:UBS) Tech and Service conference at 12:45 PM ET

* Procter & Gamble (NYSE:PG) and Coca-Cola (NYSE:KO) are due to present at the Deutsche Bank (NYSE:DB) global consumer and Food Retail Group

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

Here are highlights from Wednesday's Analyst Blog:

Tessera Reaps from Latest Win

Two weeks ago we blogged on the Tessera (TSRA) ITC case. The ruling from the International Trade Commission barred firms such as Motorola (MOT), Qualcomm (QCOM), Freescale Semiconductor and Spansion (SPSNQ) from selling inventory that infringes on the company's technology rights.

On Tuesday, Tessera Technologies announced it has negotiated a licensing agreement with Motorola over disputed technology rights and raised its second-quarter sales forecast. Management raised its sales estimate for the second quarter to a range of $59-61 million, up from $46- $49 million.

Verifone Beats Q2 Estimates

Shares of Verifone Holdings (PAY) are slightly higher (~2%) in trading today following its release of fiscal Q2 results yesterday. Adjusted EPS of $0.17 came ahead of consensus expectation of $0.15 (we were lower at $0.13), while revenues of $202 million (down 13% sequentially) were lower than our and the consensus expectation of $208 million. The company saw flat revenue in North America sequentially, while Europe, Asia and Latin America posted declining revenues.

The management of PAY conceded that revenues were being negatively impacted by the global economic slowdown and is not in a position yet to project a rebound. Guidance for Q3 was flat, both in terms of revenues and EPS ($0.15 - $0.18). Our current estimates for revenues are at $210 million and EPS of $0.17. The company also lowered FY09 EPS guidance to $0.65-0.70 on $810-830 million of revenue from previous guidance of $0.60-$0.85 on $830-$880 million of revenue. This compares to our current estimates of $840 million in revenues and non-GAAP EPS of $0.60 and consensus estimate of $848 million in revenue and non-GAAP EPS of $0.67.

Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=2649.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

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

About Zacks

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

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

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

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

* Take-Two (NASDAQ:TTWO) beat estimates with a fiscal second quarter loss of 4 cents a share, ex-items, as revenues declined 57.4% year-over-year to $229.7 million, versus estimates of $218.5 million. The firm issued downside third quarter guidance, but mixed fiscal 2008 guidance, anticipating full-year results of breakeven to a 20 cents a share profit ex-items, versus Street estimates of 12 cents, on revenues of $1.05 billion to $1.15 billion, versus estimates of $1.17 billion

* Barclays (NYSE:BCS) lifted 2010 estimates for Qualcomm (NASDAQ:QCOM) and Broadcom (NASDAQ:BRCM), expecting the two to benefit from increased market shares

* AutoZone (NYSE:AZO) reported a better-than-expected fiscal third quarter earnings of $3.13 a share, beating by 24 cents, as revenues increased 9.3% year-over-year to $1.7 billion

* Staples (NASDAQ:SPLS) released first quarter earnings of 22 cents a share, beating estimates by one cent per share on in-line revenues of $5.8 billion

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

Here are highlights from Friday's Analyst Blog:

Tessera Wins in Court Again

On Wednesday May 20th Tessera Technologies, Inc. (TSRA) announced that the International Trade Commission (ITC) issued a final determination in the action brought by Tessera against certain wireless manufacturers, (Wireless ITC action), finding Tessera's patents are valid and infringed.

The ITC issued a Limited Exclusion Order that prohibits the importation of certain infringing electronic devices that use Tessera's patented technology, which are imported by or on behalf of the named respondents. The Commission also issued a Cease and Desist Order against Motorola (MOT), Qualcomm (QCOM), Freescale and Spansion (SPSNQ), directing them to cease their unfair acts including selling infringing articles out of their US inventories.

TSRA's record in court has been nothing short of sensational. The firm has won five major lawsuits and now receives royalties from all of the big four in the DRAM market. TSRA currently has 4 major litigation cases pending. These could provide significant ongoing, one-time income, or both.

Amkor (AMKR) Arbitration - On Jan. 14, 2009, the International Chamber of Commerce's International Court of Arbitration issued to Tessera an award of $64.1 million, due by Feb. 15, 2009, for Amkor's material breach of its license agreement. This amount covers the time period March 2, 2002 through Dec. 1, 2008 and includes pre-judgment interest. (Settled and Paid)

Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=2649.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

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

About Zacks

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

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

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

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

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

Here are highlights from Friday's Analyst Blog:

Tessera Wins in Court Again

On Wednesday May 20th Tessera Technologies, Inc. (TSRA) announced that the International Trade Commission (ITC) issued a final determination in the action brought by Tessera against certain wireless manufacturers, (Wireless ITC action), finding Tessera's patents are valid and infringed.

The ITC issued a Limited Exclusion Order that prohibits the importation of certain infringing electronic devices that use Tessera's patented technology, which are imported by or on behalf of the named respondents. The Commission also issued a Cease and Desist Order against Motorola (MOT), Qualcomm (QCOM), Freescale and Spansion (SPSNQ), directing them to cease their unfair acts including selling infringing articles out of their US inventories.

TSRA's record in court has been nothing short of sensational. The firm has won five major lawsuits and now receives royalties from all of the big four in the DRAM market. TSRA currently has 4 major litigation cases pending. These could provide significant ongoing, one-time income, or both.

Amkor (AMKR) Arbitration - On Jan. 14, 2009, the International Chamber of Commerce's International Court of Arbitration issued to Tessera an award of $64.1 million, due by Feb. 15, 2009, for Amkor's material breach of its license agreement. This amount covers the time period March 2, 2002 through Dec. 1, 2008 and includes pre-judgment interest. (Settled and Paid)

Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=2649.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

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

About Zacks

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

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

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

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

Chicago, IL - April 30, 2009 - Zacks Equity Research highlights Qualcomm (QCOM) as the Bull of the Day and CEMEX, S.A. de C.V. (CX) the Bear of the Day. In addition, Zacks Equity Research provides analysis on Fannie Mae (FNM), Freddie Mac (FRE) and Ultimate Software (ULTI).

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:

Qualcomm (QCOM), the largest developer of digital mobile chipsets based on CDMA wireless technology, reported financial results for the second quarter (ended March 29) of fiscal 2009, significantly above our estimates. Despite a challenging economic environment, global demand for 3G enabled mobile products and services facilitated quarterly performance better than the company's own guidance.

We believe the recent legal settlement with Broadcom removes an impediment to higher future licensing sales. Robust growth of high-end smart-phones in developed wireless markets along with 3G network deployments in emerging markets serve as long-run growth catalysts for Qualcomm. We continue to maintain our buy rating with a higher valuation target.

Our longer-term assessment remains in tact as the company maintains a solid net cash position of nearly $14 billion with no debt. Free cash flow generation also remains impressive and increases in dividend payout provide incremental return to shareholders.

Bear of the Day:

We are keeping our Sell rating on CEMEX, S.A. de C.V. (CX). The company posted weak results in the first quarter of 2009 with net income of just US$3 million.

The continued weak cement volumes in Spain and U.S. are problematic. The short-term outlook for the company remains highly uncertain based on the downtrend in the residential, industrial/commercial, and the infrastructure sectors as well as due to the fall in the real estate prices throughout the world.

Moreover, the recent swine flu in Mexico is also problematic. All efforts to reduce its costs and net debt in 2009 are encouraging. Nevertheless, the current credit crunch and the recession in the U.S. are matters of huge concern.

Latest Posts on the Zacks Analyst Blog:

Notes on Fed Meeting

Quantitative easing continues, but was not expanded. They dropped mention of the TALF, but that is already underway (off to a very slow start, but underway). The Fed is effectively now the only buyer of mortgaged-backed securities, and by the end of the year will be holding about 20% of all Fannie Mae (FNM) and Freddie Mac (FRE) backed securities outstanding.

This is a lot of credit risk for a Central Bank to be taking on, but if it were not doing so, mortgage rates would skyrocket, rather than falling to historically low levels. Those low levels are allowing people to refinance and thus have more money to spend on other things. This may be why consumption spending was so unexpectedly strong in the first quarter.

Ultimate Software Up Post-Results

Shares of Ultimate Software (ULTI, Hold) are up 6.6% in trading so far today. The company released its fiscal Q1 results yesterday with in-line revenues of $48.8 million and non-GAAP EPS of $0.07 exceeding our estimate of $0.05.

However, Q2 revenue guidance came in at the lower end of expectation, between $47 and $48 million, with implied non-GAAP EPS lower than our and consensus expectation of $0.05 and $0.06, respectively.

The company decided to withdraw its guidance of Annual Recurring Revenue (ARR), an important valuation metric for ULTI, which may be interpreted as an attempt by the company to divert attention away from any fundamental weakness.

Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.

About the Bull and Bear of the Day

Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.

About the Analyst Blog

Updated throughout every trading day, the Analyst Blog provides analysis from Zacks Equity Research about the latest news and events impacting stocks and the financial markets.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous 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 by visiting http://at.zacks.com/?id=2677.

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment

Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros.

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.

Contacts:

Mark Vickery

312-265-9380

Telecom carriers and equipment providers that offer the most attractive opportunities are focused on third-generation (3G) wireless, broadband (DSL) and fiber-to-the-home/node networking. There are also a few market leaders that have proven able to survive the sometimes turbulent opportunity swings in the industry. It is our belief that in this uncertain stage of macroeconomic events, companies with strong balance sheets and firm net cash positions, along with sustainable dividends, provide respectable risk/reward profiles. On the other hand, highly-leveraged companies should be avoided, at least at this economic juncture.

OPPORTUNITIES

The transient collapse of financial markets has become an indelible lesson to many of us. With this we have witnessed that sector diversity is a less secure planning tool in today's increasingly correlated world markets. However, there are some tactics and opportunities that may be appropriate to address the downturns in the telecom industry, should we be greeted with them again. We consider the following:

* Necessity for Telecommunications - The need for telecom in both rural and urban areas, and its role in the infrastructure of both developed and developing markets, continues to grow. Wireless infrastructures and/or low-cost integrated IP voice and data wireline networks are necessities. In fact, most global subscribers will not give up their wireless phones and services that easily, although upgrades to advanced (high-end) handsets/offerings may be sensitive to overall consumer/business budgets. This is accompanied by telecom carriers' continued quest for operational flexibility and streamlining * International Diversification - While country diversification offers only limited protection in the current highly-correlated world equity markets, it offers hedging capabilities from local economic weakness and associated currency exchange differentials. Therefore, a significant allocation of foreign telecom companies would be appropriate as part of a technology-focused portfolio * Balance Sheet Positions - In our view, companies showing significant net cash positions become attractive in volatile markets. It is important to consider balance sheet conditions that may limit the vulnerability of telecom companies in weak economies. This is perhaps at least as important as metrics that track earnings growth but often do not consider overall market declines. With the S&P 500 P/E between 10 and12 times earnings, valuation targets that were provided by analysts based on earnings growth parameters have not been effective in guiding investment recommendations during market tailspins

This leads us to recommend selected net cash positive companies able to weather financial market volatility. Companies that match well with the aforementioned considerations include Qualcomm (QCOM), China Mobile (CHL), Amdocs (DOX) and Chunghwa Telecom (CHT). These entities have significant cash and each has unique exposure to wireless and international business, along with strong balance sheet positions to sustain their expansions.

Other investment strategies to consider for telecom include:

* Investing in Dividend-Yielding Companies - Telecom service companies typically provide a disciplined return to investors over time with dividend payouts. Dividend payouts of many of the larger telecom service companies are yielding an average of 4 to 9% as stock prices reached their lower levels. When considering dividend rates, however, we emphasize the need to review company liquidity, debt levels, and cash flow conditions that permit their ability to pay debt obligations * Dollar Cost Averaging - Setting aside funds to spread out industry-specific investments over time represents a sound strategy. This can leverage lower valuations for better investment returns when market values improve over the longer time horizon

WEAKNESSES

Generally, telecom companies that have exhibited significant degrees of valuation decline have had high debt levels and large financial leverage ratios. These companies, while offering recurring cash flow to service their debt obligations, may have difficulties should overall business decline as consumers and businesses become more selective with their spending behavior. Risks that still remain include the following:

* Potential Business Slowdown - Lower overall top-line sales among carriers that would justify a proportional reduction in capital expenditures * Exacerbated Borrowing with Credit and Loans - Over the near-term, telecom companies may be exposed to high debt levels and limited liquidity * Economic Impact Straining Consumer and Business Spending - Telecom companies that would have free cash flow impacted by slowdown in demand. (Sustainable cash flow is required to service debt obligations and may be severely impacted by pessimistic business projections)

Risks are associated with Embarq (EQ), CenturyTel (CTL) and US Cellular (USM) in this group.

David Weissman, CFA is a senior analyst covering the telecommunications industry for Zacks Equity Research.
"DOX" Free Stock Analysis: Buy? Sell? Hold?
Zacks Investment Research

Tudor Hedge Fund 13F Holdings Analysis

Related to Investment Securities/Holding Tool:

• Top 52 Most Popular Articles
• Hedge Fund Tracker Tool
• Financial Certification
• Hedge Fund Forum
• Hedge Fund Accountants
• Investment Consultants
• Investment Book
• Hedge Fund Terms and Definitions
• Geographical Hedge Fund Guides
• Hedge Fund Database

Caxton Associates Hedge Fund Holdings

• Analysis #1: Tontine Capital Partners - 13F Hedge Fund Holdings
• Analysis #2: Lone Pine Capital - 13F Hedge Fund Holdings
• Analysis #3: Tremblant Capital - 13F Hedge Fund Holdings
• Analysis #4: Maverick Capital Management 13F Holdings Analysis
• Analysis #5: BP Capital Management 13F Holdings Analysis
• Analysis #6: Blue Ridge Capital 13F Holdings Analysis
• Analysis #7: Clarium Capital Management 13F Holdings Analysis
• Analysis #8: Greenlight Capital David Einhorn 13F Holdings
• Analysis #9: Soros Fund Management LLC 13F Holdings Analysis

Related to Caxton Hedge Fund:

• Top 52 Most Popular Articles
• Hedge Fund Tracker Tool
• Financial Certification
• Hedge Fund Forum
• Hedge Fund Accountants
• Investment Consultants
• Investment Book
• Hedge Fund Terms and Definitions
• Geographical Hedge Fund Guides
• Hedge Fund Database

Maverick Capital Management Holdings Analysis

Related to Investment Securities/Holding Tool:

• Top 52 Most Popular Articles
• Hedge Fund Tracker Tool
• Financial Certification
• Hedge Fund Forum
• Hedge Fund Accountants
• Investment Consultants
• Investment Book
• Hedge Fund Terms and Definitions
• Geographical Hedge Fund Guides
• Hedge Fund Database

Lone Pine Capital & Stephen Mendel - Holdings

Related to Investment Securities/Holding Tool:

• Tontine Capital Partners - Hedge Fund Holdings
• Hedge Fund Tracker Tool
• Financial Certification
• Hedge Fund Forum
• Hedge Fund Accountants
• Investment Consultants
• Investment Book
• Hedge Fund Terms and Definitions
• Geographical Hedge Fund Guides
• Hedge Fund Database

Tremblant Capital | Bret Barakett Holdings Analysis

Related to Investment Securities/Holding Tool:

• Top 52 Most Popular Articles
• Hedge Fund Tracker Tool
• Financial Certification
• Hedge Fund Forum
• Hedge Fund Accountants
• Investment Consultants
• Investment Book
• Hedge Fund Terms and Definitions
• Geographical Hedge Fund Guides
• Hedge Fund Database