Zacks Bull and Bear of the Day Highlights: Whole Foods Market, Microchip Technology, American Dental Partners, General Dynamics and Force Protection

For Immediate Release

Chicago, IL – November 8, 2011 – Zacks Equity Research highlights Whole Foods Market (WFM - Analyst Report) as the Bull of the Day and Microchip Technology (MCHP - Analyst Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on American Dental Partners (ADPI), General Dynamics (GD - Analyst Report) and Force Protection (FRPT).

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:

Whole Foods Market's (WFM - Analyst Report) fourth-quarter 2011 earnings of $0.42 per share beat the Zacks Consensus Estimate by a penny, and rose 27.3% from the prior-year quarter on strong sales. The company is revamping its pricing strategy and concentrating more on value offerings while maintaining healthy margins.

Cost containment efforts, effective inventory management, and improved store-level performance are driving earnings growth. The company reiterated its fiscal 2012 outlook, and projected sales increase in a band of 13% to 15% and earnings growth in the range of 15% to 17%.

Moreover, a prudent capital investment is also translating into improved cash flows with a lower debt level and a healthy balance sheet. We maintain our long-term Outperform recommendation on the stock. Our target price of $76.00, 33.8X 2012 EPS, reflects this view.

Bear of the Day:

Microchip Technology (MCHP - Analyst Report) recently reported net income of $79.3 million for the second quarter, down 20.2% sequentially and down 23.0% year over year. EPS came in at $0.42, missing the Zacks Consensus Estimate by $0.02. Microchip started the September quarter expecting broad-based demand weakness.

The company expected late summer orders for normal Christmas-related builds in September, but distributors did not see any sales related to Christmas builds materialize. Microchip continues to see a broad-based weakness in all markets and in all geographies.

Therefore, based on weak earnings expectations, we continue to maintain our Underperform recommendation on Microchip Technology. We set a target price of $33.00 based on a 2012 P/E multiple of 18.6x.

Latest Posts on the Zacks Analyst Blog:

Focus Shifts to Italy

With the economic calendar today and the rest of this week on the relatively thin side, the market will likely reflect developments in Europe. The Greek situation appears to have stabilized following the end of the referendum affair and the weekend decision by the prime minister, George Papandreau, to step down in favor of a unity government. Such a unity government is expected to rubber-stamp the latest bailout deal and get on with the politically unpopular act of implementing it.

Attention has now shifted to Italy, where the situation is no less dire. The market appears to be fast losing confidence in the Italian government's ability to take the structural steps needed to fix the country's economic outlook. These concerns have started showing up in heavy selling pressure on short-term government bonds, where yields have risen to Euro-era highs. Yields on longer-dated government bonds are also flirting with levels beyond which Ireland, Greece and Portugal had to ask for bailouts.

Italy is not in bailout territory yet, but the situation is not that good either. The only silver lining in the Italian situation is that it may force Silvio Berlusconi to let go of his hold on power. The prime minister is reportedly contemplating plans to step down. The Italians are not exactly famous for coming up with stable unity governments. But even then it is hard to find anything negative in Berlusconi's departure.

With respect to the domestic economic scene, we have few reports on the docket this week following last week's busy schedule. The broad take-away from the recent run of U.S. economic readings, including Friday's October jobs report, has been positive. In an absolute sense, the economy remains weak and soft. But relative to fears of another recessionary downturn, the data is pointing elsewhere.

The third quarter reporting season has turned out to be reassuringly strong relative to pre-season fears. Estimates for 2012 have been coming down. But even there, the revisions have been very orderly and not worrying. If anything, the negative revisions for 2012 have likely bottomed already.

In other news, American Dental Partners (ADPI), a $160 million market-cap provider of services to dentists, was acquired by a private-equity firm. General Dynamics (GD - Analyst Report) is acquiring Force Protection (FRPT), a $300 million market-cap maker of blast-protected vehicles.

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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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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Read the full analyst report on WFM

Read the full analyst report on MCHP

Read the full analyst report on ADPI

Read the full analyst report on GD

Read the full analyst report on FRPT