Zacks Bull and Bear of the Day Highlights: Logitech International, Snap-on, Thornburg Mortgage and Westamerica Bancorporation

Business Wire, Oct 20, 2006

CHICAGO -- Zacks Equity Research highlights Logitech International (Nasdaq:LOGI) the Bull of the Day and Snap-on, Inc. (NYSE:SNA) the Bear of the Day. In addition, Zacks Equity Research provides analysis on Thornburg Mortgage (NYSE:TMA) and Westamerica Bancorporation (Nasdaq:WABC). Full analysis of all four 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 Logitech International (Nasdaq:LOGI). Logitech reported its 32nd consecutive quarter of double-digit growth and again beat our revenue and earnings estimates handily. Revenue growth was strong across the board, with double-digit growth across every retail category, except gaming which was expected due to the delays in the launch of PlayStation3. We now expect revenue growth in excess of 17% in the third quarter, and have raised our revenue and earnings outlook for 2007 and 2008. We have raised our price target to $30 based on the company selling at 27.5x our new fiscal 2007 estimate of $1.09, which may prove conservative.

Bear of the Day:

Our Bear of the Day recommendation is for Snap-on, Inc. (NYSE:SNA). Despite better than expected first and second quarter results, rising costs are negatively impacting the gross margin, and results for the financial services segment continue to deteriorate. Most importantly, the current high valuation compels us to retain the Sell rating on the shares of Snap-on, despite the progress being made on the cost savings initiatives and last two positive quarterly earnings reports.

Analyst Blog:

We are initiating coverage on Thornburg Mortgage (NYSE:TMA) with a Hold. Operationally, the company had a mediocre quarter, as intense competition and a still-flat yield curve have continued to suppress margins. We think conditions will continue to worsen in the next six months. With shrinking margins, TMA will have difficulty covering the dividend in 2007. On the other hand, originations in the 3rd quarter were robust and the company is on target to exceed last year's origination volume by 10%. In addition, the company's ARM portfolio has an excellent credit profile, where default risk is minimal. We recommend investors hold shares of TMA for the high yield, although the dividend could be cut next year.

We are reiterating our Hold rating and $51 target on Westamerica Bancorporation (Nasdaq:WABC) after WABC's Q3 release midday Tuesday. EPS was in line with consensus, but a penny short of our estimate. Revenue was weaker than our projections on both fronts (spread and non-interest), while both comp and non-comp expenses came in better than we projected. Expense control was clearly evident, but growth remained elusive. Again this quarter the biggest problem was NII. Average loans declined by 1.3% sequentially, with every category showing negative comparisons, while average deposits fell 1.4% sequentially, with declines again in every category except large time deposits. Our estimates are falling by $0.01-0.02 per quarter. Valuation appears full.

Get the full analysis of all four 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.

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