Zacks Equity Research highlights FactSet Research Systems (NYSE: FDS) as the Bull of the Day and H&R Block (NYSE: HRB) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Harmony Gold (NYSE: HMY) and Reddy Ice Holdings, Inc. (NYSE: FRZ). Full analysis of all these stocks is available at http://at.zacks.com/?id=2676.
Here is a synopsis of all four stocks:
Bull of the Day:
Our Bull of the Day recommendation is for FactSet Research Systems (NYSE: FDS). FactSet continues to demonstrate healthy growth as it expands internationally and enhances its offerings through strategic acquisitions. The company’s flagship offering, Portfolio Manager Workstation (PMW), is a staple among asset managers. The company has an organic growth rate in the 20% range, strong free cash flow, and will likely grow its market share. We therefore maintain our Buy rating on the shares of FDS with a new target price of $71.00.
Bear of the Day:
Our Bear of the Day recommendation is for H&R Block (NYSE: HRB). Numerous issues continue to surround the company, including concerns related to liquidity, federal regulation, discontinued operations, refinancing arrangements, and Congressional legislation, all of which could have significant impacts on the company’s operations. While the company is showing signs of improvement, many uncertainties remain, both resulting from the deterioration in the mortgage market and related to the company’s core tax business. Until the picture regarding these issues becomes clearer, we would not recommend that investors initiate new positions in shares of HRB.
Analyst Blog:
Harmony Gold (NYSE: HMY) is benefiting from higher gold prices and a weaker South African Rand relative to the U.S. dollar. The weaker South African rand is increasing the company's realized gold prices in local terms. Going forward, Harmony is focused on reducing its overall operating costs through its CONOPS agreement and the shutdown of loss making shafts. Currently, Harmony is trading at 0.7X P/NPV, based on a NPV of $13.20 per American Depositary Receipt (ADR). Over the past five years, the company's ADRs have traded between 1.5x and 3.0x P/NPV. Harmony's attractive pipeline of long-term growth projects will boost production and higher gold prices will support top-line growth.
Management at Reddy Ice Holdings, Inc. (NYSE: FRZ) is growing the company through an aggressive acquisition strategy. However, the company's high debt-service costs and highly seasonal earnings are concerns. The non-ice business was especially disappointing, resulting in management divesting it in September 2007. Management has thrice lowered full-year guidance based on adverse weather conditions. Despite a $31.25 cash buyout offer on the table, the Hold rating is maintained due to the company's inability to secure another potential buyer and the possibility of a negotiated lower buyout price, since the buyers extended the Marketing Period to January 31, 2008.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.
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.
About the Analyst Blog
Updated throughout every trading day, the Analyst Blog provides analysis from Zacks Equity Research about the latest news and events impacting stocks and the financial markets.
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