Company Description

Merit Medical Systems, Inc. produces single-use medical products of high quality and superior value primarily for use in diagnosis and treatment of cardiovascular disease. The company's products are designed to provide physicians and other health care professionals with devices that enable them to perform interventional and diagnostic procedures.

Net Income Up 28%

On Apr 28 the Utah-based company announced record sales of $58.4 million, 9% higher than the first quarter last year. Net income came in 28% higher at $5.5 million.

The record sales drove earnings per share to 19 cents, up from 15 cents in Q1 of 2008. Analysts were only expecting earnings of 16 cents, making this the first surprise in the past 4 quarters.

Analyts Raising Estimates

Since the report full-year estimates for 2009 and 2010 have inched higher. The consensus for 2009 is now 80 cents, up 1 penny. Forecasted for next year are averaging 98 cents, up 4 cents.

These estimates are calling for more than 7% growth this year and another 24% growth in 2010.

Valuations

Shares are trading at roughly 20 times forward earnings, not to bad for a medical company. However, given the growth prospects, the PEG ratio is just above 1.0.

The Chart

Shares are facing some resistance near $17, but if the momentum continues they could breakout soon. Take a look at the chart below.

Zacks Investment Research

On June 29, 2009, Zions Bancorporation (ZION) unveiled in a filing with SEC that several capital building plans taken by the company on June 1 are on track. The company expects to raise up to $250 million through a common equity distribution program over two to three quarters. Through June 26, the company had issued 8.553 million common shares under the distribution program at an average price per share of $13.92. Net of commissions, this has resulted in proceeds of $116.6 million. The company further expects to raise a total of $120-125 million by June 30 (net of commissions). This implies that the company is moving according to plan to shore up its capital position.

The company has also completed a tender offer to purchase a total of 4,020,435 depositary shares. With an anticipated clearing price of $11.50 per share, this would result in a contribution to common equity of $54.3 million, which is $4.3 million greater than the proceeds expected in June 1. Also, $230,135,000, or 16.44%, of the company's outstanding subordinated debt was tendered in the Exchange Offer to receive new subordinated debt without the conversion feature. The Company anticipates accepting all such debt validly tendered. This would also result in a slightly larger contribution to common equity than considered by the June 1 estimates.

We think with these actions to build a strong equity base, in line with its plans, the company is significantly poised to improve its financial health. Also, as we have noted previously, Zions seems much more focused now than it has been for a number of years. After restructuring the operations of Vectra Bank, closing its supermarket branches in Utah, and disposing its e-commerce subsidiary, Zions is now consolidating the systems of its various community banks.

However, competitive pressures are high throughout the banking industry and we expect continuous deposit pricing pressures as well as growth in higher cost funding accounts to continue to reduce Zions' NIM, creating headwinds on the revenue front. On a price-to-book basis, the shares trade at a 71% discount to the median of its peer group (Bank of Hawaii [BOH], BOK Financial [BOKF], Cullen/Frost Bankers [CFR], City National [CYN], East West Bancorp [EWBC], International Bancshares [IBOC] and UB). The discount looks stretched, given a negative ROE at this point. Thus, we maintain our Sell recommendation on the shares of Zions.

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.

Chicago, IL - June 30, 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: Hasbro (HAS), Mattel (MAT), Medivation Inc. (MDVN), Pfizer (PFE) and Raser Technologies (RZ).

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 Monday's Analyst Blog:

Hasbro Scores With Transformers

The extremely strong opening delivered by the Transformers movie sequel could bode well for Hasbro's (HAS) sales in the coming months.

The film, Transformers: Revenge of the Fallen, racked up domestic ticket sales of more than $200 million in the 5 days since its opening on Wednesday. This financial performance exceeded expectations, and narrowly missed setting the record for 5-day revenues set last year by the Batman sequel, The Dark Knight.

Owning the brand upon which the movie is based provides Hasbro with several benefits that could give it an advantage relative to peers such as Mattel (MAT).

Medivation - Dimebon Launch in 2012?

Medivation Inc. (MDVN) reported first quarter 2009 financial results following the market close on May 11, 2009. Revenue came in at $16.34 million, exactly where we had it modeled. Revenue consisted solely of collaboration revenue from Pfizer (PFE). EPS was ($0.19), significantly ahead of our forecast of ($0.34), due to substantially lower-than-expected operating expenses.

Pfizer makes quarterly true-up payments to Medivation as reimbursement for a significant portion of Dimebon-related development and commercialization expenses. In the first quarter 2009, Pfizer made a $5.8 million true-up payment to MDVN, which is reflected as a reduction in operating expenses - approximately $5.4 million of the true-up payment hit the R&D expense line-item.

Raser Technologies (RZ) Update

Raser Technologies (RZ) is gradually transforming itself from a developmental stage company to an operating geothermal power producer, although not a "pure play".

Looking forward, this yet to break-even company will likely transform its barren financials through the commencement of production at its first geothermal plant in Utah, purchased power agreements (PPAs), turbine deliveries, extension of the production tax credit (PTC), in addition to Symetron's progress in its SUV demonstration vehicle and heavy duty alternators.

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Looking forward, this yet to break-even company will likely transform its barren financials through the commencement of production at its first geothermal plant in Utah, purchased power agreements (PPAs), turbine deliveries, extension of the production tax credit (PTC), in addition to Symetron's progress in its SUV demonstration vehicle and heavy duty alternators.

However, limited revenue potential, mounting losses, and dependency on external funds in light of tight credit markets continue to collectively weigh on the stock.

As with most alternative energy companies, RZ is currently valued entirely on very optimistic future expectations, and if the company lives up to expectations, RZ may prove to be a great long-term investment.

Accordingly, with a mixed outlook for the stock, we maintain a speculative Hold recommendation on RZ common stock with a six-month target price of $4.50.

Looking ahead over the longer-term, while RZ has been trading in an increasingly narrow sideways channel over the last 8 months, this pattern should eventually break to the upside once the geothermal plants commence production.

Provo, Utah-based Raser Technologies, Inc., founded in 2002, operates as a geothermal power development and technology licensing company in the United States.

Company Description

Strayer Education, an education services holding company, owns Strayer University and certain other assets. The company's mission is to make higher education achievable and convenient for working adults in today's economy.

Strayer offers undergraduate and graduate degree programs in business administration, accounting, information technology, education, health care, and public administration to more than 44,000 working adult students at 60 campuses in 12 states, Washington, D.C. and worldwide via the Internet.

Founded in 1892, Strayer University is accredited by the Middle States Commission on Higher Education.

Higher Estimates

The company has seen analysts boost forecasts. Analyst estimates for 2009 are at $6.99 per share, up from $6.95 over the past 60 days. For 2010, projections have been steady over the past 3 months at $8.61 per share.

Quarterly Results Reflect Solid Growth

The company posted record results in its fourth-quarter and full-year report. Earnings per share of $1.71 topped the year-prior $1.34 and beat the consensus estimate by a penny. Fourth-quarter revenues jumped 28% year-over-year to $114.3 million thanks to a 5% tuition increase.

"We are pleased with both our fourth quarter and year-end financial results," said Robert S. Silberman, Chairman and Chief Executive Officer of Strayer Education, Inc. "We had a successful start to 2009 with the opening of new campuses in Augusta, Georgia and Huntsville, Alabama. We look forward to our new campus openings for the 2009 spring term in three new Strayer markets: Allentown, Pennsylvania; Charleston, West Virginia; and Salt Lake City, Utah."

Higher Income

Strayer hiked its annual divided to $2 per share from $1.50 not too long ago. The new payout translates into a quarterly dividend of 50 cents per share, an increase from 37.5 cents.

The company's dividend yield of 1.2% stands above the industry average as most companies within Strayer's industry pay no income.

Favorable Industry Comparisons

Strayer boasts a return on equity (ROE) of 46%, surging past the industry average of 12%. Equally as impressive is the fact that Strayer's balance sheet shows no debt. Zacks Investment Research

Company Description

Berry Petroleum is an independent exploration and production company with operations in California, Colorado, Texas and Utah.

As of Dec 31, 2008, proved oil and gas reserves had grown 45% to 246 million BOE compared to 169 million BOE at the end of 2007. The company's proved reserve mix was 51% oil and 49% natural gas by the end of 2008.

The company is geographically diverse, with 45% of proved reserves in California, 35% in the Rocky Mountain region and 20% in East Texas.

Berry Beat Wall Street Estimates by 26.09% in the Fourth Quarter

On Feb 24, Berry Petroleum reported fourth quarter and full year earnings which surprised analysts' estimates by 6 cents per share. Net income was a loss of $12 million, or a loss of 27 cents per share, compared to $32.3 million, or 71 cents, in the fourth quarter of 2007.

The loss was a result of the write-off of $38.5 million (pre-tax) of accounts receivable due from Big West of California as a result of its bankruptcy filing in Dec 2008.

Excluding the write-off, Berry earned 29 cents per share. Analysts expected 23 cents.

For the year, net income rose 3% to $2.94 from $2.89 in 2007. Total revenue jumped 37.6% to $802 million from $583 million in the year ago period. Operating cash flow was $410 million for the year compared to $239 million in 2007 due to strong mid-year commodity prices and increasing production.

2008 production rose 19% to an average of 31,970 barrels of oil equivalent per day (BOE/D) from the 26,900 BOE/D in 2007.

Outlook for 2009

The company is optimistic about 2009 despite falling commodity prices.

"We expect our 2009 operating cash flow to be between $175 and $200 million, which will fund our entire 2009 development program," said David Wolf, executive vice president and chief financial officer.

"Our hedge position makes our 2009 operating cash flow fairly insensitive to changes in commodity prices with a $10 change in WTI prices impacting our cash flow by approximately $2 million and a $1 change in Henry Hub prices impacting our cash flow by approximately $6 million."

The company will be hedging over 90% of its oil production, so that if WTI averages $40 per barrel, the realization will be $65.50 per barrel. It also expects to increase production slightly to 32,000 BOE/D.

2009 Consensus Estimates Rise

Given the company's outlook, covering analysts are bullish about 2009. Full year consensus estimates rose 17.9% to $1.71 in just the last week with 2 out of 4 analysts raising estimates.

Value Fundamentals

Berry Petroleum is a Zacks #1 Rank (strong buy) stock. It has surprised on estimates 3 out of the last 4 quarters by an average of 8.46%.

BRY is cheap, trading at only 3.9x forward earnings. Its price-to-book is just 0.36. The company has an outstanding 5-year average return on equity (ROE) of 30.01%.

Additionally, because of the recent drop in the share price, the company's dividend currently yields 4.51%.

Zacks Investment Research

However, limited revenue potential, mounting losses, dependency on external funds and imminent expiration of PTC continue to weigh on the stock. As with most alternative energy companies, RZ is currently valued entirely on very optimistic future expectations, and if the company lives up to them RZ may prove to be a great long-term investment.

Accordingly, with a mixed outlook for the stock, we initiate a market-neutral Hold recommendation on RZ common stock with a six-month target price of $7.75 representing 6.2% upside return potential.

Read the full analyst report on RZ

Nearly 55% of Nucor’s steel sheet volumes are under long-term price contracts, which will provide the company a cushion against higher raw material costs. It had been able to successfully pass on higher raw material costs through a mechanism of steel surcharges, which helped the company maintain or even improve its operating margins. Going forward, we believe long-term price contracts will help Nucor to maintain its near-term profitability.

Nucor’s Castrip technology will structurally lower its cost of production and lead to meaningful long-term savings. This process also reduces the overall environmental impact of producing steel by generating significantly lower emissions.

The company had successfully implemented three raw material projects which are expected to put at Nucor’s disposal over 2.5 million metric tons of high-quality scrap substitutes per year. Recently, Nucor upgraded its furnace at its steel recycling mill in Tuscaloosa, Alabama. Subsequently, production from the plant increased 15%.

In the first quarter, the company commenced operations at the Utah building system facility, which has an annual capacity of 30,000 tons. Nucor increased its presence in the steel mills segment through greenfield projects including special bar quality mill in Memphis, Tennessee, which will have an estimated annual capacity of 850,000 tons.

Read the full analyst report on NUE