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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: C.R. Bard (NYSE: BCR)
C.R. Bard operates in vascular, urology, oncology, and surgical specialty markets. These end-markets should remain insulated from the current economic turmoil. Many of the company's products are used in interventional medicine - life-saving surgical procedures. The company's vascular products include percutaneous transluminal angioplasty catheters, guidewires, introducers and accessories, peripheral stents, stent grafts, vena cava filters, and biopsy devices.
We look for the company to finish in the upper end of their guidance. Future quarters will be met with a headwind from foreign exchange. However, with less than a third of sales outside of the United States, the impact will be less than for BCR's competitors.
The stock currently trades at roughly 17.3x our 2008 expected EPS of $4.40. We believe the company should trade in-line with the comparables and slightly above the industry mean. We remain at a P/E/G valuation of 1.7x 2008. With this valuation, our recommendation increases from Hold to Buy.
Bear of the Day: General Motors (NYSE: GM)
General Motors shares currently rate a Sell with a six-month target price of $4.00. Along with other original equipment manufacturers (OEMs) such as Ford and Chrysler, GM is being pressed by industry-wide manufacturing overcapacity.
The company is at a disadvantage compared to its competitors, owing to huge pension and healthcare costs. GM provides pension, healthcare and life insurance benefits to more than 400,000 retirees and their families in the U.S.
Furthermore, GM sales are hampered by the poor resale value of its vehicles. GM cars on average fetch $3000 less per vehicle than their counterparts. High raw material costs are also a serious problem facing automakers. The prices of commodities have risen dramatically in the past few months, and GM is finding it difficult to pass this on to its customers.
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Benchmark Electronics (NYSE: BHE)
Benchmark provides electronics manufacturing services (EMS) on a turnkey basis. The company offers customized and complete solutions ranging from initial designing to assembling, manufacturing, testing, distribution and volume production. It specializes in engineering services, including product design, printed circuit board layout, prototyping, and test development.
With the computing segment fading faster than expected, Benchmark faces decelerating revenue growth in the coming quarters. Citing an early wind-down of mature projects, the company reported a disappointing second quarter and offered lower guidance for the third quarter, as well.
Mattel, Inc. (NYSE: MAT)
Mattel is the world's largest manufacturer of toys. The company operates under three primary business segments, of which the Mattel brands segment is the largest with worldwide gross sales of $3.7 billion in 2007.
We rate shares of Mattel a Hold prior to the release of third-quarter earnings. Although the results posted in the first quarter of 2008 were disappointing nearly across the board, the company's second-quarter results contained some bright spots. We expect that products related to movie launches and the introduction of a new Elmo product may provide a catalyst for improved operations in the second half of the year.
eBay, Inc. (Nasdaq: EBAY)
eBay managed to exceed the consensus EPS estimate by $0.05, due to a lower tax rate, higher interest income, and continued share repurchases. Management also lowered its fourth quarter guidance.
We are reducing our estimates for 2008 and 2009 once again. Macro headwinds and competitive pressures continue to weigh on the company's gross merchandise volume, which declined 1% in the third quarter. Those negatives are offset by solid growth in its payments business and a rock solid balance sheet. The stock trades at an undemanding valuation of about 9x our 2009 EPS estimate, but slowing growth in eBay's core business prevents us from becoming bullish on the stock.
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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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