Zacks Analyst Blog Highlights: Tech Data, Ingram Micro, Hittite Microwave and CACI International

Business Wire, Feb 20, 2007

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: Tech Data (Nasdaq: TECD), Ingram Micro (NYSE: IM), Hittite Microwave (Nasdaq: HITT) and CACI International (NYSE: CAI).

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

Here are highlights from Friday's Analyst Blog:

Expect More TECD Sluggishness

Tech Data (Nasdaq: TECD) is set to report fourth quarter results on March 5. We continue to expect Tech Data shares to underperform the market for the next six months. The stock is off about 10% from its high in the fall of 2006, but we think the stock has further to fall. We base this opinion on TECD shares trading at a premium to industry leader Ingram Micro (NYSE: IM).

This premium valuation is not justified, in our view. Our target price of $31 is based on a P/E [price-to-earnings] multiple of 15x our fiscal year 2008 EPS [earnings per share] estimate, which represents a generous P/E-to-growth ratio of 1.25. We reiterate our Sell rating.

We would take advantage of the recent run up in TECD shares to lock in profits. For instance, TECD shares are now trading at about 22 times our fiscal year 2008 EPS estimate. (Ingram Micro is trading at just 12.5 times our out-year earnings estimate.) What's more, we think TECD will have an extremely difficult time outperforming the market over the next few quarters. We would wait for a more favorable entry point around $30, which is our six-month target price, to get more positive on the stock.

Hittite Has Lots of Room to Grow

Hittite Microwave (Nasdaq: HITT) is a leader in integrated circuits, modules and subsystems for wireless communications. The company has a broad product portfolio across a large portion of the frequency spectrum, including radio frequency (RF), microwave and millimeterwave. Hittite is poised to benefit as more applications move up the frequency spectrum and into Hittite's sweet spot. The company has been able to maintain strong margins with its proprietary products, leading to earnings upside. We therefore maintain our Buy rating on HITT shares with a $55.00 price target.

Spy an Attractive Entry for CACI

Revenue for CACI International (NYSE: CAI) in the second quarter [Q2] was $476.9 million, up 13.7% year over year. Organic revenue was only 1.0%, though, due in part to rising contract delays and protests. Contract awards totaled $495 million. Contract funding orders totaled $485 million, up 65% year over year. Management is projecting Q3 revenue to fall in the range of $460 million to $495 million, below our previous estimates. As a result, we maintain our Buy rating but have adjusted our target price to $60.

On a macro basis, we think there are a number of trends that should help sustain CACI's revenue momentum. For one, the Department of Defense continues to depend on contractors to provide specialized services. Not only is the Bush Administration focused on engaging threats abroad but also on preventing terrorist attacks at home. In this regard, CACI s system integration skills and intelligence expertise will help it capture a significant portion of the funds earmarked to build up the Department of Homeland Security and to create systems that will foster the sharing of critical information among all intelligence agencies.

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

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