Zacks Bull and Bear of the Day Highlights: j2 Global Communications, Morgan Stanley, Apple, IBM and Visa

For Immediate Release

Chicago, IL – October 21, 2011 – Zacks Equity Research highlights j2 Global Communications (JCOM - Analyst Report) as the Bull of the Day and Morgan Stanley (MS - Analyst Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Apple (AAPL - Analyst Report), IBM (IBM - Analyst Report) and Visa Inc. (V - Analyst Report).

Full analysis of all these stocks is available at http://at.zacks.com/?id=2678.

Here is a synopsis of all five stocks:

Bull of the Day:

We are upgrading our recommendation on j2 Global Communications (JCOM - Analyst Report) to Outperform based on its excellent financial results for the second quarter of 2011, which significantly beat the Zacks Consensus Estimates. We believe the company's strong financial position and diversified product pipeline, coupled with the long-term growth prospects of outsourced value-added messaging services, will drive its earnings higher in the near future.

The Subscriber Usage revenue continues to beat market expectations. This is an important parameter as credit-sensitive customers constitute a majority of j2 Global's sales. Exploration of new opportunities for both digital facsimile and voice services, through new acquisitions, facilitated the company to solidify its market position.

Ongoing macro-economic headwinds may actually help j2 Global since business enterprises are more inclined to use digital facsimile in order to reduce cost structure. Our target price of $36 is based on a 15.3x our fiscal 2011 earnings estimate, approaching the industry average. This is in-line with our Outperform recommendation.

Bear of the Day:

Morgan Stanley's (MS - Analyst Report) third-quarter earnings from continuing operations came in way ahead of the Zacks Consensus Estimate, but the performance of the Asset Management segment was weak. Also, investment banking revenues remained feeble. Though the quarter experienced improved interest and non-interest revenues, higher non-interest expenses were the headwinds.

After reviewing the results, we are maintaining our Underperform recommendation on the shares. The weak capital position is also expected to restrict Morgan Stanley's capital deployment. Further, the company was not granted the green signal from the Federal Reserve to raise its dividend.

Our six-month target price of $15.00 equates to about 9.0x our earnings estimate for 2011. Combined with the $0.20 per share annual dividend, this price target implies an expected negative total return of 9.3% over that period, which is consistent with our Underperform recommendation.

Latest Posts on the Zacks Analyst Blog:

Earnings Trump Recession, and Euroquake

Once more clarity is bought with QE Next, both here and across the pond, stocks will trade on their solid fundamentals more and more as institutional portfolio managers have a burden of uncertainty lifted. I said two weeks ago that earnings would become more important than Europe, especially as they proved that a recession was slowly slipping off the table.

Give this macro perspective, the market is still "waiting to go higher" in my opinion. Today's mild reaction to European news flow was a yawner, not a panic. The reaction to earnings misses like that of Apple (AAPL - Analyst Report) and IBM (IBM - Analyst Report) has been tamer than most expected.

And since money managers have more risk to the upside than the down, by virtue of their mandates, the dips below S&P 1,200 will likely be bought for the rest of the year. So while the chart looks like 1230 is still going to be tough to crack, what's your risk of being long here?

You just have to decide when and where this is a likely top. I would use 1,150 now on the S&P as my line in the sand where earnings take a back seat again to recession and European fears. Till then, I'm buying the dips.

Early Christmas for Visa Investors

Basking after a good fiscal third quarter, the board of Visa Inc. (V - Analyst Report) made yesterday eventful by announcing a 47% hike in its regular quarterly dividend, thereby inflating shareholder value.

Accordingly, the leading card payment processing company’s regular quarterly dividend surged to 22 cents from 15 cents paid until the last quarter. At this rate, the annual dividend payout will improve to 88 cents from 60 cents.

The hiked dividend is payable on December 6, 2011, to all the class A, class B and class C shareholders of record as on November 18, 2011.

This marks the third consecutive hike in the past three years, since Visa went public in 2008. Previously, the company had increased its dividend by 20% in October last year. This was backed by about a 19% increment in 2009, where the annual dividend had escalated to 50 cents from 42 cents.

Visa’s dividend hike has come just ahead of its fiscal fourth quarter and annual 2011 financial results, scheduled to release after the market closes on October 26, 2011. The company’s board had also sanctioned a new $1.0 billion share repurchase program during its fiscal third quarter of 2011, which is expected to expire on July 20, 2012. Visa also bought back $1.1 billion worth of stock in the previous quarter.

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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Read the full analyst report on JCOM

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Read the full analyst report on AAPL

Read the full analyst report on IBM

Read the full analyst report on V