Zacks Bull and Bear of the Day Highlights: Garmin, Ltd., ChoicePoint, Cincinnati Bell and UIL Holdings

Business Wire, Nov 20, 2007

CHICAGO -- Zacks Equity Research highlights Garmin, Ltd. (Nasdaq: GRMN) as the Bull of the Day and ChoicePoint, Inc. (NYSE: CPS) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Cincinnati Bell (NYSE: CBB) and UIL Holdings Corp. (NYSE: UIL). 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 Garmin, Ltd. (Nasdaq: GRMN). Garmin is an OEM of equipment focused on global positioning system (GPS)-based technology. September quarter results exceeded the consensus on both the top and bottom lines. Strong demand for PNDs prompted management to raise the guidance for 2007. PNDs are likely to remain a major growth driver, pulling down the overall margins. Garmin's R&D focus and strategic advertising campaigns continue to raise operating expenses. We see increasing revenue and gradually decreasing profitability for the company. The shares have fallen as a result of Garmin's counter-bidding for Tele Atlas, and we recommend investors to BUY on the weakness.

Bear of the Day:

Our Bear of the Day recommendation is for ChoicePoint, Inc. (NYSE: CPS). ChoicePoint has embarked on a strategy of internal growth and is focusing on its core business lines. We believe that, over time, the company is headed in the right direction. However, it will take time for these initiatives to show result and in the meantime, the company faces declining revenues from its mortgage business that will likely persist for the next few quarters. We therefore downgrade CPS shares to Sell and set a price target of $38.00.

Analyst Blog:

We are maintaining our Hold recommendation for Cincinnati Bell (NYSE: CBB). Although we consider its wire-line business to remain level, Cincinnati Bell has experienced a gradual decline in fixed access lines, though less severe than its competitors. Cincinnati Bell also announced complete ownership of its growth-oriented wireless business and plans to build a 3G network within this year utilizing the AWS spectrum purchased in 2006. This is expected to drive revenue growth in future reporting periods. The company's strategy of offering attractively-priced service bundles, including customized blends of local phone service, long-distance, broadband Internet access (DSL), and wireless, have limited market share losses to competitors. However, our main concern remains the highly leveraged balance sheet. Cincinnati Bell is trading at 15.1x our estimated earnings for 2007 and 13.5x 2008 earnings, which represents modest discounts to the S&P 500 and significant discount to the industry group.

Following the sale of UIL Holdings Corp's (NYSE: UIL) Xcelecom systems integration businesses and the company's implied increased focus on core regulated transmission and distribution operations, we reaffirm our market-neutral HOLD recommendation with a six-month target price of $36.75. However, our outlook is tempered by modest near-term projected earnings growth, very high projected dividend payouts, rising debt, and weak performance at the UI operating segment. Price appreciation to our near-term valuation target, with the potentially unsustainable $0.4325 per share quarterly dividend-based upon high projected payouts, represents annualized total return potential of 12.7%. The utility now generates the majority of its revenues from regulated retail electricity operations, which are strengthening, expanding, and generating generally improving financial results.

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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