Zacks Bull and Bear of the Day Highlights: United Natural Foods, Secure Computing Corp., Smith International and Del Monte

Business Wire, Oct 6, 2006

CHICAGO -- Zacks Equity Research highlights United Natural Foods, Inc. (Nasdaq:UNFI) the Bull of the Day and Secure Computing Corp. (Nasdaq:SCUR) the Bear of the Day. In addition, Zacks Equity Research provides analysis on Smith International (NYSE:SII) and Del Monte (NYSE:DLM). 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 United Natural Foods, Inc. (Nasdaq:UNFI). United Natural Foods continues to experience broad-based revenue growth and stable-to-improving operating margins ex one-time items. Benefiting from the positive trends in the natural foods industry and improved distribution capacity, the company is expected to continue to grow in terms of both sales and earnings. Given the stock's recent weakness, United Natural Foods is rated a Buy.

Bear of the Day:

Our Bear of the Day recommendation is for Secure Computing Corp. (Nasdaq:SCUR). After reviewing the company's near-term prospects we have decided to downgrade shares of SCUR to a Sell from our previous Hold rating. We are concerned that the integration issues at the company continued in the third quarter, which may cause its EPS to be lower than we expect. While our estimates do not include the CipherTrust acquisition, we expect it to be dilutive to earnings in the second half of the year, which may cause us to lower our estimates further. We will know more when the SCUR reports its third quarter earnings in late October, but for now we are setting a price target of $6 per share, based on the company selling at 25x our lowered 2006 EPS estimate of $0.24.

Analyst Blog:

We are maintaining our Buy recommendation on Smith International (NYSE:SII) shares ahead of the company's quarterly results. Despite the recent commodity-price weakness, we expect the company to continue achieving significant quarterly earnings gains in the coming quarters on the back of growing international operations and continued strength in domestic activity levels. We expect revenue growth and margin expansion to continue, aided by demand acceleration, price increases, and cost discipline. Our earnings estimates and price objective remain unchanged.

Del Monte's (NYSE:DLM) management states that it is focused on improving shareholder value through a brand-driven strategic plan. Despite management's belief that the Transformation Plan will enhance execution and overall competitiveness, the expected earnings dilution from the acquisitions of Milk-Bone and Meow Holdings is constraining earnings progress. EPS have been and are expected to remain in the $0.67 to $0.89 range. The stock's decline has discounted much of the recent negative earnings revisions. Hence, the stock is rated a Hold.

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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