Zacks Analyst Blog Highlights: RC2, Hasbro, Mattel and Pool Corp

Business Wire, Jan 16, 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: RC2 Corporation (Nasdaq: RCRC), Hasbro (NYSE: HAS), Mattel (NYSE: MAT) and Pool Corporation (Nasdaq: POOL).

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

Here are highlights from Monday's Analyst Blog:

Reduced Expectations for RC2

While we consider the sale and discontinuation of underperforming product lines to be a long-term positive for RC2 Corporation (Nasdaq: RCRC), we expect that the recent restructuring and ongoing margin pressures currently impacting the company are likely to prevent significant near-term share price appreciation. Our $40 price target is based on a multiple of 15x our 2007 EPS estimate, and we maintain our Hold rating.

Formerly known as Racing Champions, RC2 has utilized an aggressive acquisition strategy over the past several years to fuel top- and bottom-line growth and build out its portfolio of toys, infant products, and collectible products. Major acquisitions include Learning Curve, Playing Mantis, and The First Years. RC2 generates a large percentage of its net sales from licensing agreements based on popular brands, trademarks, and entertainment properties including; Thomas & Friends, NASCAR, John Deere, JoyRide, Lamaze and Eden.

RC2's peer group is currently trading at an average P/E multiple of 15.7x 2007 earnings estimates. We believe a discount valuation -- relative to the company's larger competitors Hasbro (NYSE: HAS) and Mattel (NYSE: MAT) -- is warranted, given the recent restructuring activity and current margin pressure being experienced by RCRC. Despite the fact that shares sold-off more than 11% following the recent announcement of preliminary Q4 sales figures, we consider the shares to be appropriately valued near current levels given our reduced earnings expectations.

Good Time to Get in the POOL

Following the release of lower guidance, shares of Pool Corporation (Nasdaq: POOL) traded down more than 10%. Given the company's growth potential (forecasted 18% EPS growth in 2007) and stable operating history, we believe that the recent sell-off has created an attractive entry point. Pool Corporation is the dominant force in its industry, and has a consistent track record of delivering growth in both revenues and earnings.

We believe that this growth will continue going forward. Our target price reflects a multiple of 20x projected 2007 EPS, near the lower end of the company's historic multiple range.

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

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today by visiting http://at.zacks.com/?id=2674.

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros.