Zacks Analyst Blog Highlights: Corel Corp., Dell, ON Semiconductor and LSI Logic

Business Wire, Nov 21, 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: Corel Corporation (Nasdaq: CREL), Dell, Inc. (Nasdaq: DELL), ON Semiconductor (Nasdaq: ONNN) and LSI Logic (NYSE: LSI).

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

Here are highlights from Tuesday's Analyst Blog:

Risk-Averse? Avoid Corel for Now

Following an approximately three-year stint as a privately held company, Corel Corporation (Nasdaq: CREL) has emerged as a much stronger and profitable entity. The company is pursuing an acquisition strategy that leverages new products across its strong sales and distribution network, which includes relationships with a number of OEMs, such as Dell (Nasdaq: DELL).

Although the stock is inexpensive, acquisitions add a degree of risk and delays in the adoption of HD video have caused the company to lower expectations. Corel is currently trading at a very reasonable 8.8x our fiscal 2008 EPS estimate of $1.40. Although a significant discount to the industry mean, we believe that CREL is a riskier stock than most of its comparables. This additional risk lies in its growth through acquisition strategy, meaning it needs to integrate disparate software platforms and continue to integrate operations.

Still Attractive Valuation on ONNN

ON Semiconductor (Nasdaq: ONNN) is an OEM of primarily analog semiconductors used within a diverse set of end markets. September quarter results met consensus estimates. Next quarter's revenue guidance is for 0-2% growth. Backlog represents over 90% of next quarter's revenue projection.

The company has also begun to get significant revenue from its recent major purchase of LSI Logic's (NYSE: LSI) Gresham, Oregon wafer facility, which has the potential to be a solid revenue driver. The products produced at the Gresham facility are of the high-margin variety. We feel the stock is undervalued at these levels, and recommend Investors Buy the shares.

The stock is currently trading at a 9.6x multiple of our 2008 earnings estimate (P/E). This marked the fourth quarter the company included a complete quarter of sales from the new facility. We expect this business will contribute $100 to $112 million per year. The stock is trading close to its 52-week high after delivering a strong quarter, yet with its strong product portfolio we feel the company can outgrow the industry.

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.

The performance of the Zacks Rank portfolios shown above for annual and year-to-date periods are the linked monthly total returns (price changes dividends) of equal weighted hypothetical portfolios, consisting of those stocks with the indicated Zacks Rank, assuming monthly rebalancing and zero transaction costs. These are not the returns of actual portfolios. The hypothetical portfolios were created at the beginning of each month from Jan 1988 forward based on the values of the Zacks Rank available to Zacks' clients before the beginning of each month. The portfolios created monthly from 1988 through September 2006 exclude ADRS and are comprised of stocks that have the indicated Zacks Rank and were covered by at least two analysts at the time of the stocks inclusion in the portfolio. Starting in October 2006 and going forward, the portfolios are comprised of all stocks with the indicated Zacks Rank and do not exclude ADRs, which is more reflective of the list of stocks that customers will find on the Zacks web sites. 2007 returns are for the period of Jan 1 - Jun 30, 2007. These performance numbers have been audited from 1995 through 2003 by Autschuler Melovan, a division of American Express Financial.