Zacks Bull and Bear of the Day Highlights: Amdocs, 3Com Corp., Nissan Motor Company and HealthExtras

Business Wire, Oct 16, 2007

CHICAGO -- Zacks Equity Research highlights Amdocs, Ltd. (NYSE: DOX) as the Bull of the Day and 3Com Corporation (Nasdaq: COMS) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Nissan Motor Company (Nasdaq: NSANY) and HealthExtras (Nasdaq: HLEX). 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 Amdocs, Ltd. (NYSE: DOX). We maintain our Buy recommendation and the same valuation target for Amdocs Ltd., a leading provider of CRM and billing software to telecom carriers as the company will announce its fourth quarter (ended September) fiscal 2007 financial results shortly. Massive costs incurred by the company for the AT&T and Sprint-Nextel transformation projects put pressure on operating margins. However, we believe that Amdocs will benefit significantly from large transformation projects at many telephone carriers as they provide converged and consolidated network solutions. Amdocs maintains its leadership position in the digital-content and Operating Support System markets for the carrier segment. In addition, the company has a healthy financial position, strong order backlog, robust pipeline, and major new contracts consummated on a global basis.

Bear of the Day:

Our Bear of the Day recommendation is for 3Com Corporation (Nasdaq: COMS). On September 28th, 3Com Corporation agreed to be acquired by affiliates of Bain Capital Partners for approximately $2.2 billion in cash, or $5.30 per share. Also as part of the transaction, affiliates of Huawei Technologies will acquire a minority interest in the company and become a commercial and strategic partner of 3Com. The transaction is expected to be completed by the first quarter of calendar year 2008. However, there is a risk that the transaction is blocked by the U.S. Government due to security concerns over Huawei's affiliation with the Chinese government. We are recommending that 3Com holders take profits by selling the shares now as they are within 10% of the acquisition price, rather than risk a large drop should the deal be blocked. We arrive at a $4.72 price target.

Analyst Blog:

Nissan Motor Company (Nasdaq: NSANY) has been accelerating its growth and increasing market share with the aid of several successful product launches. The company has various new launches planned for the current fiscal year. The current Nissan Value-Up plan targets to attain sales of 4.2 million units by fiscal 2009 and a minimum 20% return on invested capital. Currently, Nissan is trading at a P/E multiple of 10.9x our 2008 EPADR [earnings per American Depositary Receipt] estimate of $1.86. As Nissan has a zero net automotive debt, its fundamentals appear solid. However, we maintain our Hold rating, as the company faces a continued challenging environment characterized by higher incentives, higher commodity prices and raw material shortages.

HealthExtras (Nasdaq: HLEX) announced that Catalyst Rx was selected by Medical Card System to provide PBM services to its members in Puerto Rico. HLEX is scheduled to report Q3 results on Nov. 6. Management previously lowered its FY07 earnings guidance due to non-recurring items in the first half and expected client implementations of CHCC members in Q4. Earnings growth has been under pressure from the lower gross margin that is partially offset by lower selling, general and

administrative (SG&A) expenses. We previously lowered our FY07 EPS estimate but increased our FY08 estimates. Given the successful client implementations and additional client wins that provide a solid outlook and HLEX's addition to the S&P SmallCap 600 Index, we think HLEX should continue to trade at a premium to the group.

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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