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

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

Bull of the Day

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

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

We believe that the current stock price does not fully reflect the company's intrinsic value. Concerns related to online ad spending, as consumers remain cautious in their spending. We maintain our Buy rating on the shares of SOHU and raise our six-month target price to $75.00.

Bear of the Day

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

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

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

Recent Analysis from the Analyst Blog

What Are the Banks Haggling Over?

While it is unclear how flexible the regulators will be about adjusting the assessments, it is being reported that some banks are trying to convince them to use their first-quarter 2009 results to project their revenues for the next two years. This has a potential of further undermining the credibility of the stress tests, which are already being widely criticized for not being "stressful enough."

Many banks had strong first-quarter performances results, which are not sustainable, as the banks themselves have admitted. Near-zero funding costs and a surge in refinancing due to record-low mortgage rates and better revenues from fixed income trading (resulting from the high volatility) helped the results.

While we do not expect the rates to go up in the near term, they will not remain at current levels over the next two years. Once the Fed sees signs of inflation in the economy, it will have to raise the rates and also stop/slow down its purchases of mortgage-backed securities.  

And some banks benefited from strange accounting rules. Citigroup (C) recorded a profit of $2.5 billion, and Bank of America (BAC) recorded a profit of $2.2 billion, resulting from widening of their credit spreads (worsening of creditworthiness), and on the other hand Morgan Stanley (MS) recorded a loss of $1.5 billion due to the tightening of its credit spreads.

So if the credit spreads tighten for Citi and Bank of America in near future (are the stress tests not supposed to increase the confidence in the banking system?), will they not be required to record huge losses?

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: 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 InvestmentResearch 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=4582.

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 VickeryWeb Content Editor312-265-9380Visit: 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 Monday's Analyst Blog:

Ness Tech with More Downside

Ness Technologies (NSTC) is a small player in the IT services market. The company posted mixed 4Q08 results, with revenue below expectation but in line EPS.

The company's Application Development and Software Product Engineering segment performed very well in 4Q08. However, Ness has forecasted lower-than-expected 2009 results, hurt by a slowdown at its U.S. financial services and NessPRO software distribution businesses.

Hold American Capital for Now

American Capital Agency Corp (AGNC) is a REIT that focuses on investments in mortgage pass-through securities and collateralized mortgage obligations (CMOs).

AGNC reported 4Q08 net income of $11.0 million or $0.73 per share on revenues of $17.1 million. The company reported a 16.5% annualized return on equity in 4Q08. Net interest spreads were 1.19% during the quarter, well below last quarter. Higher funding costs and lower mortgage rates are having a negative effect on spreads.

The Best Pipeline In Biotech

Last week, Biogen Idec (BIIB) held an R&D Day, highlighting the broad depth of the company's pipeline. In total, Biogen Idec boasts 7 programs in phase III registration programs and 20 other programs in phase II "proof-of-concept" programs. Biogen's development programs span oncology, neurology and cardiovascular disease, and include both small molecules and biologics. In our opinion, it's the best pipeline in biotech.

Besides these late-stage candidates, Biogen has several interesting early-stage programs, including: GA101, a 3rd-generation anti-CD20 Mab with preclinical data suggesting superiority to Rituxan, CDP-323 and daclizumab, two Mabs with potential use in multiple sclerosis, and BIIB-014, an A2a antagonist for Parkinson's Disease.

SOHU: Good Value, Great Growth

Sohu.com Inc (SOHU) is the second-largest Internet portal and one of the most well-known online brands in China. Sohu's pipeline for its new online games remains strong and is expected to drive meaningful growth in late 2009 and 2010. We are encouraged by the company's growing cash balance as well as its debt-free balance sheet.

We believe that the current stock price does not fully reflect the company's intrinsic value. Concerns related to online ad spending and China's macro economy in 2009 still remains. The company is going to spin-off part of its gaming division via an ADS offering.

Merged CRTX Much Improved

Cornerstone Therapeutics Inc (CRTX) is a specialty pharmaceutical company focused on acquiring, developing and commercializing prescription products for the respiratory market. Cornerstone Therapeutics is a newly created company following the merger of private Cornerstone BioPharma with public Critical Therapeutics completed on October 31, 2008. The merged company gets a new lease on life, finally.

We think the merger makes sense and is positive to both old companies. For Critical Therapeutics, the merger has greatly expanded its product portfolio, provided better resources for operations and sustainable growth. Critical Therapeutics was a tiny biotech company with only one product -- Zyflo/Zyflo CR -- on the market, with a very weak pipeline. Sales of Zyflo/Zyflo CR have been slow and the company had been under great pressure to expand its portfolio.

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

Sohu.com Inc.(SOHU) just reported yet another earnings surprise and estimates are on the rise for the Chinese gaming company. Sohu.com specialized in on-line, interactive role-playing games that are increasing in popularity around the globe and especially in Asia.

The Surprises Keep Coming

On Feb 26 Sohu beat Wall Street estimates once again when it reported fourth-quarter earnings of $1.35, well above the consensus of $1.16. The 16% surprise is the company's seventh consecutive surprise.

Earnings were driven by a 41% spike in online gaming revenues. Active accounts also rose 13.5% over the previous quarter.

Estimates are Up

In the past 90 days the full-year consensus estimate for 2009 has climbed to $4.70, up from $4.59. The 2010 estimates are averaging $5.10, up from $4.99 in the same period of time. These figures forecast are good enough fro 19% growth in 2009 and 9% in 2010.

The Chart

Shares of SOHU have started to form an ascending triangle, for those of you who read the "tea leaves". Hopefully it can maintain its momentum and push through the level of resistance near $50 per share.

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Although Sohu faces fierce competition from different fields including brand advertising, online games, wireless value-added services, and search, the company manages to be a main player in almost each field. Sohu has a well-known brand and rich website resources to leverage the great opportunities for online business in China.

Internet penetration is accelerating [in China], which is very positive for Sohu. Overall, we think the current stock price is undervalued. Therefore, we are maintaining a Buy rating on SOHU shares. Due to the current market malaise we are reducing our target price to $65.

Read the full analyst report on SOHU.

Sohu.com's Revenue Explodes

On Jul 28, the company reported second quarter earnings and beat its own prior guidance and Wall Street estimates by 45.71%, or 32 cents per share. Net income surged 60.1% to $40.2 million, or $1.02 per share, from $25.1 million, or 64 cents in the year-ago period.

Revenues continued to soar, rising 162%, and 20% quarter-on-quarter, to $102 million from $39 million in the second quarter of 2007. Total revenues exceeded $100 million for the first time in the company's history. Advertising revenues were hot, growing 53% year-over-year to $43.4 million.

Sohu.com was the Internet Content Sponsor for the Beijing 2008 Olympic Games. In its second quarter report in July, the company was optimistic that the Games would expand its market penetration in China and spur growth for the remainder of 2008.

Third Quarter Revenue Expected to Grow

Sohu.com issued third quarter revenue guidance of between $112 million to $116 million and expects advertising revenues of $48.5 million to $50.5 million.

Consensus Estimates Spike Higher

The last four quarters, Sohu.com has easily surprised on estimates on average of 28.41%. Given its track record of growing earnings, covering analysts have been scrambling to raise estimates on the third quarter and the full year.

Third quarter estimates rose 30 cents to 98 cents in the last 60 days. Full year estimates jumped 28.69% in the last month to $3.55 from $2.76.

Fundamentals Are Solid

Shares of Sohu.com have tumbled since July due to the challenging market environment. Sohu.com is now trading in value territory, with a forward price-to-earnings (P/E) of just 14.22. The company also has an outstanding one year return on equity (ROE) of 35.69%.

"SOHU" Free Stock Analysis: Buy? Sell? Hold?
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A 46% Earnings Surprise

On July 28th the company reported second-quarter earnings of $1.02 per share, 46% higher than the consensus estimate of 70 cents. This was the fourth earnings surprise in the last four quarters. Sohu reported second-quarter revenue of $102 million, an all-time high for the company.

The consensus estimate for full-year 2008 and 2009 earnings are both up over 30% within the past two months. The company is reasonably priced with a PEG ratio of .5.

The Chart

Shares of SOHU had been volatile earlier this summer after setting a 52-week high of $91.50. The stock has come off of the recent high and has been trading sideways as it consolidates near $76 per share. Take a look at the chart below.

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PepsiAmericas, Inc (PAS) is reaping the benefits of European acquisitions as they record an 18% year-over-year increase in second-quarter earnings. The stock has rebounded quite nicely after setting a 52-week low, is a Zacks Rank #1 rated stock, and just raised 2008 full-year guidance. Read Full Article.

Urban Outfitters, Inc (URBN) recently announced one of the best quarters in its history, including the fourth earnings surprise in as many quarters. The company is trading just under its brand new 52-week high with a PEG ratio of 1.0. Read Full Article.
"SOHU" Free Stock Analysis: Buy? Sell? Hold?
Zacks Investment Research