CHICAGO, Feb. 11, 2011 /PRNewswire/ -- Zacks Equity Research highlights: Brightpoint Inc. (Nasdaq: CELL) as the Bull of the Day and Onyx Pharmaceuticals (Nasdaq: ONXX) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Wal-Mart (NYSE: WMT), Family Dollar (FDO) and Kroger's (NYSE: KR).
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Full analysis of all these stocks is available at http://at.zacks.com/?id=2678.
Here is a synopsis of all five stocks:
We upgrade our recommendation for Brightpoint Inc. (Nasdaq: CELL) to Outperform, following its fourth quarter of 2010 financial results, well above the Zacks Consensus Estimates.
Significant growth of 3G smartphones throughout the world helped Brightpoint to manage a record-high mobile device in the reported quarter. Most importantly, almost 82% of devices are managed through the company's high-margin Logistic Services. According to our view, business fundamentals of Brightpoint remain intriguing primarily due to growing global demand for 3G smartphones.
We believe newly won distribution agreements together with effective debt and cost control strategies initiated in 2009 will pave the way for Brightpoint's future earnings growth. We also believe that recent acquisition of Touchstone Wireless will be a long-term positive for Brightpoint. The company will offer innovative supply chain management system with product recycling.
Although Onyx Pharmaceuticals' (Nasdaq: ONXX) third quarter EPS of $0.76 was well above expectations, we note that results were driven by a license payment from Ono Pharma, which boosted revenues by $59.2 million. Excluding this, revenues declined 7.9% to $63.7 million, mainly due to Nexavar's disappointing performance.
Following the release of third quarter results, Onyx reduced its 2010 guidance for Nexavar for the second time. We believe that intense competition, foreign exchange fluctuations, disappointing performance in Japan, reimbursement issues in the Asia Pacific and other regions, the impact of US health care reform and EU pricing pressure will continue to affect Nexavar's performance going forward.
Moreover, with carfilzomib not expected to gain approval before late 2011/early 2012, we remain concerned about Onyx dependence on Nexavar, We maintain our Underperform recommendation on the stock and have increased our 2010 and 2011 loss estimates for Onyx based on concerns regarding Nexavar.
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Jobless Claims Lowest Since 6/08
Initial Claims for Unemployment Insurance fell by 36,000 last week to 383,000 (last week was revised up by 4,000, so one could see it as a 32,000 decline). This was better than the expected level of 410,000. The weekly numbers have been very erratic of late, but this is the second week in a row of big declines.
This is a series that tends to be a bit on the flakey side around the holidays. The holiday effects should be over now, so perhaps this is a more normalized level. Let us hope so, as the fall below the 400,000 level is very good news.
Normally one would get excited about a drop of this magnitude, but the recent volatility in the numbers tempers my enthusiasm. We had a big drop during the Christmas week to 391,000, and then big increases over two weeks, and a big decline of 37,000 two weeks ago, then a massive increase last week of 57,000, and now it's going down again. The current level is the lowest since June 2008.
There is a concern that by cushioning the blow of unemployment, people might be more reluctant to take a marginal job opportunity, but a below poverty level income is not that much of a cushion. Further, I'm not sure it is good for the economy for highly skilled people to be taking jobs in other fields that have no use of those skills, and then be unavailable when those skills are needed again.
The people who get extended benefits tend to spend the money quickly on basic needs. This in turn keeps customers coming in the door at Wal-Mart (NYSE: WMT) and Family Dollar (FDO). It means that, at the margin, some people are able to continue to pay their mortgages and thus helps keep the foreclosure crisis from getting even worse than it already is.
However, by the time they are well into extended benefits, they might also be spending food stamps as well as the unemployment check at Kroger's (NYSE: KR). These customers keep the people at Wal-Mart, Family Dollar and Kroger's -- and, of course, their competitors -- employed. It also keeps the people who make and transport those goods employed as well, although in that case much of the stimulus is lost overseas if the goods are imported.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.
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