Zacks Bull and Bear of the Day Highlights: SINA Corporation, Nissan, Alcatel Lucent, Somaxon and FactSet Research

Here is a synopsis of all five stocks:

Bull of the Day: SINA Corporation (Nasdaq: SINA)

For the second quarter of 2008, both its revenue and EPS exceeded the market consensus in spite of the large earthquake that hit China earlier this year. SINA continued to do well in its online brand advertising and increased the gap between it and its closest competitor in the online brand ad market. SINA is still one of the most well-known online brands in China.

Moreover, the Beijing Olympic Games can significantly stimulate the online advertising business in China in the next quarter. Therefore, we are maintaining our Buy rating for SINA.

Bear of the Day: Nissan ADR (Nasdaq: NSANY)

Increasing prices of energy and raw material including steel, aluminum and precious metal are eroding profits for Nissan. Moreover, the company is offering higher incentives to entice buyers. This is making it difficult for Nissan to pass on rising raw material and energy prices to the ultimate consumers.

Further, the overall automotive industry environment is a challenging one, with volumes going down. The company anticipates a 29.5% drop in earnings for fiscal 2008. Thus, we rate the stock a Sell with a target price of $13.00.

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Alcatel Lucent (NYSE: ALU)

Alcatel-Lucent reported weaker-than-expected revenues for the second quarter of 2008 and its earnings were additionally hit by restructuring charges of 265 million ($414 million). The company is progressing on its restructuring plans by cutting costs and streamlining layers of management although the related expenses continue to drive earnings lower.

While the company is the market share leader in several categories of telecom equipment (including DSL gear), we are concerned about the pressure on operating margins due to the challenging competitive environment, the recent softness in pricing, and the short-term disruptions from the Alcatel-Lucent merger that appear to continue.

Somaxon Pharmaceuticals (Nasdaq: SOMX)

Somaxon Pharmaceuticals filed the new drug application (NDA) for insomnia drug Silenor in late January 2008. The Food & Drug Administration (FDA) accepted the application in April 2008. The Prescription Drug User Fee Act (PDUFA) is now set for December 1.

Somaxon is currently in discussion with several interested parties for commercialization of the drug in early 2009. The management is looking for a co-promotion agreement in the U.S. However, we do not believe a deal will be reached until after the FDA's decision. In the meantime, all investors can do is wait. We are keeping our rating at Hold, and maintaining our $6 price target.

FactSet Research Systems (NYSE: FDS)

FactSet is a leading provider of global online integrated data-related products and services for the investment community.

The company continues to demonstrate healthy growth as it expands internationally and enhances its offerings through strategic acquisitions. FactSet's flagship offering, Portfolio Manager Workstation (PMW) is a staple among asset managers.

However, increased competition from companies like S&P pose a growing risk given asset managers may seek to cut costs. Moreover, given large losses at major financial institutions, we are concerned that these institutions will slow spending on analytical tools. Profitability has fallen somewhat for FDS, however much of the fall in net margin is explained by the expensing of stock options. Going forward, the Fundamental Database acquisition will put some pressure on margins through 2009.

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.

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