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The Zacks Analyst Blog Highlights: ViroPharma, National Oilwell Varco, Natural Gas Services Group, Dril-Quip and Lufkin Industries

NOV NGS DRQ

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For Immediate Release

Chicago, IL – June 19, 2013 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include ViroPharma Inc. -Free Report), National Oilwell Varco ((NOV - Analyst Report)-Free Report), Natural Gas Services Group Inc. ((NGS - Snapshot Report)-Free Report), Dril-Quip Inc. ((DRQ - Analyst Report)-Free Report) and Lufkin Industries Inc. (-Free Report).

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

Here are highlights from Tuesday’s Analyst Blog:

ViroPharma Up on Takeover Rumors

Shares of ViroPharma Inc. -Free Report) recently jumped 6.30% on potential buyout rumors.

As per Reuters, several pharmaceutical companies have shown an interest in acquiring ViroPharma given the company’s orphan disease drug portfolio.

The company’s key drugs include Cinryze for hereditary angioedema (HAE), Plenadren for the treatment of adrenal insufficiency (AI), Buccolam in Europe for the treatment of pediatric seizures, and Vancocin for the treatment of C. difficile- associated diarrhea (CDAD).

We note that ViroPharma’s growth story currently revolves around Cinryze, which is approved in the US for routine prophylaxis against angioedema attacks in adolescent and adult patients with HAE. Cinryze accounted for 76% of total sales in 2012.

In the EU, Cinryze received approval for routine prevention, pre-procedure prevention and acute treatment of angioedema attacks in adults and adolescents in 2011.

Cinrzye has been granted marketing exclusivity by the FDA until 2015 under the Orphan Drug Act.

ViroPharma has begun commercializing Buccolam in Europe paving the way for an additional revenue opportunity.

Additionally, the acquisition of Plenadren in 2011 expanded the company’s orphan disease commercial product portfolio although the approval process for Plenadren hit a roadblock when the FDA informed the company that the data filed by it in the EU regarding Plenadren was not sufficient for evaluating the risk/benefit profile of the drug in the US.

Meanwhile, an interesting candidate in ViroPharma’s pipeline is maribavir which is being developed for the treatment of cytomegalovirus (CMV) infections in transplant recipients.

ViroPharma recently received ‘orphan drug designation’ in the EU for maribavir for the treatment of CMV in patients suffering from impaired cell mediated immunity.

Maribavir was granted the same designation in the US in May 2011 for the treatment of clinically significant CMV and disease in at-risk patients.

We expect investor focus to remain on takeover updates. Shares have gone up 5.4% on a year-to-date basis and we expect further increase if the buyout rumors gather momentum.

National Oilwell Varco Slips to Strong Sell

On Jun 18, Zacks Investment Research downgraded global large-cap energy equipment maker, National Oilwell Varco ((NOV - Analyst Report)-Free Report) to a Zacks Rank #5 (Strong Sell).


Why the Downgrade?

National Oilwell witnessed sharp downward estimate revisions after reporting weak first-quarter 2013 results. On Apr 26, National Oilwell reported weaker-than-expected first-quarter 2013 earnings due to lower operating margin in all its segments. Earnings per share (excluding transaction costs) of $1.29 missed the Zacks Consensus Estimate by 8 cents and the year-ago adjusted profit by 15 cents.

With regard to business units, Petroleum Services & Supplies’ operating profit decreased 19.8% from the first quarter of 2012 to $311.0 million. The negative comparison was due to lower demand for products and services in a weak North American market.

The recent weakness in North American onshore drilling has been a negative for National Oilwell, which derives a substantial portion of its revenues/earnings from the region. Moreover, in a competitive and soft pricing environment, we expect some downside for the National Oilwell stock during the next few quarters.

A combination of all these factors weighed on the earnings estimates for National Oilwell in the last 60 days. Most of the estimates were revised downward over the same time frame for the second quarter of 2013 (13 out of 15) and full-year 2013 (16 out of 17). The Zacks Consensus Estimate for the second quarter of 2013 has gone down by 8.2% to $1.34 per share while it dropped 8.16% to $5.63 per share for 2013.

Other Stocks to Consider

Not all oilfield equipment makers are performing as poorly as National Oilwell. The stocks of Natural Gas Services Group Inc. ((NGS - Snapshot Report)-Free Report), Dril-Quip Inc. ((DRQ - Analyst Report)-Free Report) and Lufkin Industries Inc. (-Free Report) are worth considering. All these stocks carry a Zacks Rank #2 (Buy).

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

About Zacks Equity Research

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
 

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