Zacks Bull and Bear of the Day Highlights: Skyworks Solutions, Embarq, Kinder Morgan Energy Partners and Kirkland's

Business Wire, Dec 4, 2007

CHICAGO -- Zacks Equity Research highlights Skyworks Solutions (Nasdaq: SWKS) as the Bull of the Day and Embarq (NYSE: EQ) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Kinder Morgan Energy Partners (NYSE: KMP) and Kirkland's (Nasdaq: KIRK). 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 Skyworks Solutions (Nasdaq: SWKS). The company sequentially grew its cash and equivalents balance in the September quarter to $253.8 million from $234.6 million, as it generated roughly $30 million of cash flow from operations. Going forward, Skyworks expect Research in Motion in U.S. and Media Tek in China to become important customers for the company. Management expects revenues in Q1 of FY2008 to come around $207 million while EPS is projected between $0.15 and $0.17. Additionally, management claims it is seeing good order visibility into the coming quarter and expects its newest front-end module designs to ramp. We have a Buy rating on the stock and have set a target price of $11.

Bear of the Day:

Our Bear of the Day recommendation is for Embarq (NYSE: EQ). We maintain our Sell rating for Embarq based on lower expected earnings trends through 2007. EQ, the fourth largest local U.S. telecommunications carrier, has emerged following the spin-off of Sprint's Local Telephone business on May 17, 2006. We believe that the local phone business in North America, in particular service offered by regional carriers, has significant challenges ahead as local access lines continue to decline and as consumers and business customers transition to alternative solutions, including VoIP, wireless and cable offerings. We also believe pricing pressure and the need to invest further in broadband infrastructure may strain overall operating margins, impacting various earnings metrics. The high level of debt is also a matter of concern.

Analyst Blog:

Kinder Morgan Energy Partners (NYSE: KMP) is a premier MLP (master limited partnership) with an impressive track record of distribution growth and financial discipline. The partnership has initiated over $3 billion of organic projects that should help drive growth in the coming years. We continue to believe that current valuation adequately reflects the partnership's risk profile and growth prospects. We do not expect the recent completion of Kinder Morgan, Inc.'s privatization to have any impact on the partnership's growth prospects. While the partnership has a number of organic growth projects currently at different stages of completion, their impact on its overall growth profile is expected to be limited, in our view.

Kirkland's (Nasdaq: KIRK) third quarter results were ugly. This shouldn't be too surprising given the current environment for home furnishings retailers. With the stock down 84% in the last twelve months, the worst-case scenario -- going out of business -- is more than priced in. We think that outcome is highly unlikely. That's because Kirkland's will end 2007 with no debt, it is closing unprofitable stores, it has basically stopped opening new stores and management is focused on cash flow and waiting out the current storm. In our opinion, the shares look cheap and represent a speculative buying opportunity.

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.

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