Zacks Bull and Bear of the Day Highlights: Maxim Integrated Products, Sonic Innovations, Valero, Tesoro and ConocoPhillips.
Chicago, IL – June 16, 2009 – Zacks Equity Research highlights Maxim Integrated Products (MXIM - Analyst Report) as the Bull of the Day and Sonic Innovations (SNCI) the Bear of the Day. In addition, Zacks Equity Research provides analysis on Valero (VLO - Analyst Report), Tesoro (TSO - Analyst Report) and ConocoPhillips (COP - Analyst Report).
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:
Maxim Integrated Products (MXIM - Analyst Report) is an OEM of semiconductor analog and mixed signal ICs. March quarter results were short of consensus estimates, although they were in-line with management's own expectations.
Forward guidance is for a revenue increase of 3-12% in the June quarter. Order rates started picking up in three of the four end markets, and the fourth market is expected to see increase in Q4.
We are reiterating our Buy rating on MXIM shares, given recent market share gains, healthy product pipeline, diversity in the company's markets, strong cash generating capabilities and cheap valuation.
Bear of the Day:
Sonic Innovations (SNCI) announced that its shareholders at the annual shareholder meeting approved a name change of the company to Otix Global, Inc, where Otix Global is to become the parent company of Sonic Innovations. SNCI filed with the Securities and Exchange Commission its Form 10-Q for the quarterly period ended March 31, 2009.
Revenue from SNCI's German subsidiary is at risk of declining from unsuccessful attempts at renegotiating insurance contracts that is required as a result of new legislation passed by the Federal Council of Germany in Nov. 2008 that became effective April 1, 2009.
Our price target of $0.80 per share is based on a price-to-sales multiple of roughly 0.3x our FY09 sales estimate.
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Refiners Lose Out in Cap & Trade
While there are many important changes that this 946-page tome is aiming to bring about, we are focusing here on one central part of the proposed legislation -- the Cap & Trade regime. The bill creates winners and losers among different energy producing and consuming sectors through its initial free awards of emission permits.
Approximately 85% of the permits are doled out for free, with the rest auctioned off. According to a preliminary estimate by the EPA, a permit to emit one ton of carbon dioxide or equivalent will be worth $11-$15 in 2012, with the value of all permits at around $60 billion in 2012. By the 2025, the value would be higher, according to EPA estimates, rising to $22-$28, with the total value at around $113 billion.
Oil producers and refiners, such as Valero (VLO - Analyst Report), Tesoro (TSO - Analyst Report) and ConocoPhillips (COP - Analyst Report) are clearly on the losing side, having been allocated a very small portion of the permits (2%). This forces them to purchase permits on their own account. Electric utilities and other consuming industries such as steel, cement and paper manufacturers benefiting from the giveaways.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=5507.
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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