Zacks Bull and Bear of the Day Highlights: ArthroCare, Kimberly-Clark, Volcom and Coca-Cola FEMSA

Business Wire, Feb 28, 2007

CHICAGO -- Zacks Equity Research highlights ArthroCare (Nasdaq: ARTC) as the Bull of the Day and Kimberly-Clark (NYSE: KMB) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Volcom, Inc. (Nasdaq: VLCM) and Coca-Cola FEMSA S.A. de C.V. (NYSE: KOF). 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 ArthroCare (Nasdaq: ARTC). The company has a clear strategy to leverage its patented Coblation technology and other innovative, clinically superior surgical devices, for the surgical treatment of soft-tissue conditions throughout the body. Patent litigation settlements will limit competition, in our opinion, and the company has substantial leverage opportunities. Despite the increased investments limiting EPS in the first half 2007, we believe there is upside to our 2007 estimates as our margin and top-line expectations are slightly below management's current guidance.

Bear of the Day:

Our Bear of the Day recommendation is for Kimberly-Clark Corporation (NYSE: KMB). Kimberly-Clark has strong consumer brands and is well respected for product innovation, especially in the diaper category. Despite progress on the company's three cost-savings programs (FORCE, the Global Business Plan and the Strategic Cost Reduction Plan), rising raw material costs, weak European operations and competitive pressures are negatively impacting results. Therefore, the stock's rating is a Sell.

Analyst Blog:

Volcom, Inc. (Nasdaq: VLCM) has an impressive sales growth record. Continued distribution channel expansion, both domestically and internationally, along with a strong new product effort should support Volcom's 36% sales growth rate. In mid-2005, the company converted from an S corporation to a fully taxable company, increasing the tax rate from 1.5% to 39.7%. In addition, management's decision to take control of the European operations will require significant up-front costs, which will dampen the company's EPS [earnings per share] growth. Therefore, we rate the stock a Hold.

We are changing our recommendation on Coca-Cola FEMSA S.A. de C.V. (NYSE: KOF) from Buy to Hold. The short-term outlook for Latin American economic growth is positive, and the medium-term outlook for the beverage industry in the region is very encouraging. Additionally, the continued growth in non-traditional products such as flavored waters and juices is positive. However, fourth quarter results raised some concerns over increasing competition, higher raw material costs and lower operating margins. The stock has performed well over the past few months, but now it is time for a more cautious approach on KOF, in our opinion.

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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