Zacks Analyst Blog Highlights: Nabors, Patterson-UTI, Schlumberger, Baker Hughes and Alexza Pharmaceuticals.

Chicago, IL – June 17, 2009 – 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: Nabors (NBR - Analyst Report), Patterson-UTI (PTEN - Analyst Report), Schlumberger (SLB - Analyst Report), Baker Hughes (BHI - Analyst Report) and Alexza Pharmaceuticals (ALXA - Snapshot Report).

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Here are highlights from Tuesday’s Analyst Blog:

Land Driller Gains Unsustainable

We are scratching our heads to justify the impressive recent gains made by land drillers such as Nabors (NBR - Analyst Report) and Patterson-UTI (PTEN - Analyst Report). We are of the view that these gains lack fundamental support and remain unsustainable.

Shares of land drillers have been star performers lately. In the last 12 weeks, land drillers are up an average 41%, compared to a little over-12% gain for the S&P 500. During the same time period, the deepwater offshore drillers gained roughly 25%, while the large-cap oilfield service companies, such as Schlumberger (SLB - Analyst Report) and Baker Hughes (BHI - Analyst Report) went up by about 32%. Year-to-date, the land drillers are up 31%, while the deepwater offshore and the oilfield service groups are up 56% and 53%, respectively.

Oilfield service activities outside the U.S. are largely centered on looking for, developing and maintaining oil production. Offshore drilling, particularly the deepwater end of it, is similarly oil-centered. As such, it makes perfect sense for the stock prices of the large global oilfield serve players and the deepwater offshore drillers to be making handsome gains given the roughly doubling of oil prices from their Feb’09 lows.

But land drilling in the U.S. is primarily for natural gas. And natural gas prices have not moved much, if any, in recent days. In the last 12 weeks, natural gas prices are flat to modestly down, basically stuck around $4. A massive storage overhang, still growing domestic production, fears of increased LNG imports, and recession-hit demand, particularly in the industrial sector, continues weighing on natural gas prices.

Alexza Buying Symphony-Allegro

In what we consider to be a fantastic transaction for both management and shareholders, Alexza Pharmaceuticals (ALXA - Snapshot Report) announced on June 16, 2009 that it has entered into an agreement with Symphony-Allegro to require the rights to all product candidates subject to the December 2006 agreement with Symphony Capital Partners Inc. et al.

The formation of Symphony-Allegro, initially funded with $50 million in capital to facilitate the development activities for AZ-002, AZ-004, and AZ-104, has been a substantial impediment to partnering discussions on these three candidates, and a significant overhang on the stock. Our May 8, 2009 report, entitled "The Symphony-Allegro Squeeze," outlined our belief that the stock would remain under pressure until this overhang was lifted.

To re-acquire the full rights to these three candidates, Alexza will issue Symphony-Allegro 10 million shares of newly registered common stock, plus 5 million warrants to acquire additional shares (at 1:1) at an exercise price of $2.26/share. Symphony-Capital's new total ownership in Alexza Pharmaceuticals will stand around 23% once the deal closes in the third quarter 2009. Symphony-Capital will also nominate one member to the board of directors.

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