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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:
Cirrus Logic, Inc. (Nasdaq: CRUS | Quote | Chart | News | PowerRating) is a fabless OEM of analog, mixed-signal and digital processing integrated circuits (ICs). The company's 4Q results were in line with our expectation.
On the positive side, CRUS reflects a strong balance sheet with no debt. The company has also provided decent 1Q 2010 guidance. Cirrus' new product offerings are expected to benefit end customers.
The seismic product line remains a strong growth area and should help increase revenue going forward. This group should maintain its growth even after factoring in the changes in oil price. Our recommendation remains a BUY with a price target of $5.50.
Bear of the Day:
We are keeping our Sell rating on CEMEX, S.A. de C.V. (NYSE: CX). The company posted weak results in the first quarter of 2009 with net income of just US$3 million.
The continued weak cement volumes in Spain and U.S. are problematic. The short-term outlook for the company remains highly uncertain based on the downtrend in the residential, industrial/commercial and the infrastructure sectors as well as due to the fall in the real estate prices throughout the world. Moreover, the recent lawsuit filed against the company is problematic.
However, all efforts to reduce its costs and net debt in 2009 are encouraging. Nevertheless, the current credit crunch and the recession in the U.S. are matters of huge concern.
Latest Posts on the Zacks Analyst Blog:
Commercial Real Estate Plunging
The reason why the value of CRE is falling is not a mystery. If stores are closing, then they will not be paying rent, and landlords will not be in a position to get rent increases from the remaining stores. If a company is laying off lots of people it will have lots of empty cubicles and offices, and will be looking to sublet its existing space, competing directly with the landlords trying to rent out existing space.
In addition, as recently as the second half of last year, construction of new commercial real estate was still very robust, meaning that there is lots of new space that has recently come on line. Still, a 8.6% decline in a single month is startling and is very bad news for REITs like Mack-Cali (NYSE: CLI), Liberty Properties (NYSE: LRY | Quote | Chart | News | PowerRating) and Cousins Properties (NYSE: CUZ).
We have already seen commercial delinquencies and foreclosures start to rise, and this will be a major headache for the banks going forward. Many small- and mid-sized banks ($1-10 billion in assets) are very heavily exposed to CRE. This could cause them to be the guest of honor at one of the Friday night pizza parties put on by the FDIC. However, individually these banks do not threaten the financial system the way the stress-tested 19 would if they failed.
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.
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.
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