Zacks Bull and Bear of the Day Highlights: SABESP, Dillard's, Nordstrom and Focus Media

Business Wire, Nov 27, 2007

CHICAGO -- Zacks Equity Research highlights SABESP (NYSE: SBS) as the Bull of the Day and Dillard's, Inc. (NYSE: DDS) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Nordstrom (NYSE: JWN) and Focus Media Holding Limited (Nasdaq: FMCN). 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 SABESP (NYSE: SBS). We are keeping our Buy recommendation on Companhia de Saneamento Basico do Estado de Sao Paulo, or SABESP (SBS). The company posted better-than-expected results for the third quarter of 2007. The short-term outlook remains positive thanks to the end of the dry season in the State of Sao Paulo, as well as the September tariff adjustment. Additionally, the stock still trades at an attractive valuation and the business environment is Brazil remains quite encouraging.

Bear of the Day:

Our Bear of the Day recommendation is for Dillard's, Inc. (NYSE: DDS). Dillard's reported disappointing results for the third quarter. Sales decreased 5% year-over-year and comp-store sales declined 6%. The company continues to experience lower gross margins and negative operating leverage. We remain bearish on DDS shares and would sell into any rallies. We believe weak industry trends and the company's poor fundamentals will continue to pressure Dillard's results. What's more, the turmoil in the credit markets has eliminated the likelihood that Dillard's will sell off assets or get acquired by a private equity firm. With little chance of a takeover, DDS shares reflect the company's deteriorating fundamentals. We maintain our Sell rating and $12 target price.

Analyst Blog:

Nordstrom's (NYSE: JWN) third quarter earnings per share were $0.59, which was $0.07 ahead of consensus estimates. The upside was due to lower-than-expected operating expenses from reduced bonuses and a reduced share count. Excluded those items, Nordstrom's third quarter EPS were in-line with its guidance of $0.50-$0.53. Keep in mind, the company reduced its EPS guidance from $0.61-$0.64 on October 11. Overall, we remain negative on retailers because of the headwinds facing consumers. And while we think JWN is one of the better ways to invest in retail, Nordstrom will struggle in the current environment. As a result, we maintain our Hold rating on JWN shares. Our target price of $37 assumes the stock will match the return of the S&P 500.

Focus Media Holding Limited (Nasdaq: FMCN) is China's leading multi-platform digital media company. It operates the largest out-of-home advertising network in China using audiovisual digital displays. It is believed that FMCN has more than 90% market share in the commercial building network and frame poster network in China. FMCN also has more than 50% market share in wireless advertising market in China. FMCN announced strong revenue growth and earnings growth for the third quarter of 2007. Revenue exceeded market consensus, and EPS were in line with market consensus. Although the company's blended gross margin declined due to the contribution of the lower-margin Internet advertising business and in-store business, FMCN is well positioned to leverage the great growth opportunity of out-of-home advertising market in China. FMCN is evaluating a potential option for a separate listing of its mobile handset advertising business in Hong Kong or the United States.

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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