DIRECTV, Trimble Navigation, American Express, Capital One and Wells Fargo

Chicago, IL - May 12, 2009 - Zacks Equity Research picks DIRECTV (DTV - Analyst Report) as Bull of the Day and Trimble Navigation (TRMB - Snapshot Report) as Bear of the Day. In addition, the analysts at Zacks Equity Research discuss the latest on American Express (AXP - Analyst Report), Capital One (COF - Analyst Report) and Wells Fargo (WFC - Analyst Report).

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

Bull of the Day

DIRECTV (DTV - Analyst Report) is set to continue generating healthy free cash flow and earnings growth, with reduced cap ex requirements, healthy ARPU, and vigorous growth in its U.S. and Latin American operations. The company’s HD lead should defend its market share, bolster ARPU, and help stem decelerating subscriber growth.

We think the HD roll-out with the RBOCs as partners will defend DTV’s market share against cable’s ability to offer video, voice and data (“triple play”), which together with recently tightened credit standards, have been impeding subscriber growth. Longer term, we view other companies’ IP-TV roll-outs a serious threat, but one that won’t be fully realized for several years.

Near-term, we expect satellite and cable TV will be relatively defensive recession investments, suffering less subscriber attrition in the recession than other forms of entertainment, and DIRECTV in particular should benefit from its recent efforts to weed out its lower-end customers most likely to churn.

Bear of the Day

Trimble Navigation (TRMB - Snapshot Report) is an OEM of GPS-based products and control systems. March quarter revenue was short of the consensus, although the EPS exceeded. Forward guidance is for a revenue decline of -1.4% to an increase of 9.0% in Q2.

International markets will be the only growth drivers for E&C, as the negative impact of the recession on the domestic business is likely to continue. The company will also face negative seasonality in the second half.

However, both the TFS and TMS segment results are currently expected to improve. We are reiterating our Sell rating on TRMB shares.

Recent Analysis from the Analyst Blog

More Thoughts on Unemployment

Losses at American Express (AXP - Analyst Report) were modeled to show a 20.2% loss rate on its credit card book, while at Capital One (COF - Analyst Report) losses were expected to go as high as 18.2%, and at Wells Fargo (WFC - Analyst Report) they were modeled to go as high as 26.0% of loans outstanding.

In light of the extreme lengthening of the duration of unemployment, such high loss rates certainly seem well founded, if perhaps a touch on the optimistic side.

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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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