Zacks Analyst Blog Highlights: Pegasus Wireless, J.C. Penney, China Mobile and Kongzhong

Business Wire, Nov 14, 2006

CHICAGO -- 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: Pegasus Wireless (Nasdaq: PGWC), J.C. Penney (NYSE: JCP), China Mobile (NYSE: CHL) and Kongzhong (Nasdaq: KONG).

See the latest posts to the Analyst Blog by visiting: http://at.zacks.com/?id=2673

Here are highlights from Monday's Analyst Blog:

Initiating PGWC a Hold

We are initiating coverage of Pegasus Wireless (Nasdaq: PGWC) with a Hold rating ahead of 3rd quarter financial results and following the company's decision to de-list from the Nasdaq Global Market exchange, as it further focuses on internal business strategy and shareholder value. The company, which provides niche wireless communications solutions to consumers, academia, government and other enterprises, has registered its shares on the OTC Bulletin Board market for immediate trading following the de-listing. Although the perception of stocks listed on the OTC may tend to be viewed somewhat negatively, it is our opinion that the strengthening of strategic customer relationships by PGWC and the company's continuing merger integration activities will enhance sales and earnings momentum.

PGWC has the potential to reemerge in the marketplace as a stronger wireless equipment and integration company. We also believe near-term sales performance may positively influence the stock valuation.

JCP Reasonably Valued

J.C. Penney (NYSE: JCP) reported strong third quarter results, easily beating sales and earnings per share estimates. In addition, management's guidance for the fourth quarter was ahead of our expectations. We are increasing our fiscal 2006 estimate by $0.16 and our fiscal 2007 EPS by $0.08.

J.C. Penney's business momentum, higher profit margins, and stock repurchases bode well for its EPS growth. Still, we remain concerned with several issues facing the department store industry. We maintain our Hold rating on the stock, as it looks reasonably valued at current levels.

Room to Grow with Kongzhong

China Mobile's (NYSE: CHL) recent policy change induced a 17% decrease in Kongzhong's (Nasdaq: KONG) third quarter revenue, which exceeded market expectations. However, Chinese wireless value-added service providers have grown rapidly in the past three years and have great potential.

Moreover, Kongzhong's leading position on 2.5G platform in China should help the company make full use of future 3G opportunities. Overall, we don't think the current stock price fairly represents the company's intrinsic value. Therefore, we are maintaining our Buy recommendation for Kongzhong's stock.

See the latest posts to the Analyst Blog by visiting http://at.zacks.com/?id=2645

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