Zacks Analyst Blog Highlights: Equity Residential, Apartment Investors, Fannie, Freddie and ArvinMeritor Inc.

For Immediate Release

Chicago, IL – August 26, 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: Equity Residential (EQR - Analyst Report), Apartment Investors (AIV - Snapshot Report), Fannie (FNM - Snapshot Report), Freddie (FRE - Analyst Report) and ArvinMeritor Inc. (ARM - Analyst Report).

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Here are highlights from Tuesday’s Analyst Blog:

House Prices Actually RISING

Most of the adjustment in home prices is behind us, but I am not totally sure we are out of the woods. With the soft economy and rising unemployment, median incomes are not going up and are probably falling.

Major apartment REITs like Equity Residential (EQR - Analyst Report) and Apartment Investors (AIV - Snapshot Report) have been reporting that they have had to lower stated rents recently and effective rents even more (i.e. throwing in a few free months of rent when you sign a lease). This means that rents are most likely going down nationwide, although it has not yet shown up in Owners Equivalent Rents, which is how the government tracks housing for calculating inflation. Declining rents and incomes will put more pressure on housing prices.

This will be particularly true once the artificial prop of the first-time home-buy tax credit expires. The other major prop to the market has been the Federal Reserve, which has turned into the mortgage buyer of first and last resort as it is in the process of buying $1.25 trillion in Fannie (FNM - Snapshot Report) and Freddie (FRE - Analyst Report) backed securities. Eventually the Fed will have to reverse those actions (or inflation will spiral out of control), and when it does, the mortgage market is likely to get much, much tighter.

ArvinMeritor Loses Its Wheels

Earlier this month, auto parts supplier ArvinMeritor Inc. (ARM - Analyst Report) agreed to sell its Wheels business to focus on its core business. Lochpe-Maxion, a Sao Paulo, Brazil-based producer of wheels and frames for commercial vehicles, railway freight cars and castings, will buy the segment from ArvinMeritor.

The sale is expected to close by the end of 2009. ArvinMeritor’s Wheels business has manufacturing facilities in Limeira, Brazil and San Luis Potosi, Mexico.

ArvinMeritor plans to invest up to $10 million in its commercial vehicle business in Brazil to support expansion into new product segments and new manufacturing technology. Despite the worldwide slump in automotive industry, the company's production in South America grew by 9% in the last quarter. Meanwhile, the company is also pursuing the sale of its light vehicle systems business, which includes the body systems unit.

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