Zacks Bull and Bear of the Day Highlights: Baidu.com, Supertex, Pactiv Corporation and Benchmark Electronics

Business Wire, Oct 30, 2007

CHICAGO -- Zacks Equity Research highlights Baidu.com (Nasdaq: BIDU) as the Bull of the Day and Supertex, Inc. (Nasdaq: SUPX) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Pactiv Corporation (NYSE: PTV) and Benchmark Electronics, Inc. (NYSE: BHE). 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 Baidu.com (Nasdaq: BIDU). Baidu's financial results for the third quarter again exceeded the market consensus. With China's most popular search engine, Baidu has an advantage over rivals in China's fast-growing online advertising market. In addition, Baidu continues to expand its product lines to attract users and boost revenue. Although fierce competition from Google and Yahoo prevents Baidu from building a wide economic moat, we think Baidu is currently undervalued based on its growth prospects. Therefore, we initiate BIDU shares with a Buy recommendation.

Bear of the Day:

Our Bear of the Day recommendation is for Supertex, Inc. (Nasdaq: SUPX). Supertex released its fiscal Q2:08 results recently. Revenues of $22 million were down 17% from a year ago but in line with our estimate. On a sequential basis, revenues were up 6% as Electro-luminescent (EL) driver sales to the company's largest customer rebounded in the second quarter. GAAP EPS of $0.32 was $0.03 short of our estimate of $0.35. Management's outlook for the second half was disappointing, as revenues are projected to be flat or modestly up sequentially. The company also indicated that there could be a short-term pause in the ramp up of the company's LED driver sales. We have adjusted our revenue and EPS estimates for FY2008 and FY2009 and maintain our Sell rating on Supertex, Inc. with a target price of $32.

Analyst Blog:

Pactiv Corporation (NYSE: PTV) reported third quarter EPS of $0.45, in line with our expectations and up 12.5% year-over-year, amid sales growth (from the Prairie Packaging acquisition) and lower selling, general and administrative (SG&A) expenses from lower advertising and promotional spending, partially offset by a decline in spread (i.e. the difference between selling prices and raw material costs) due to increase in plastic resin prices. While gross margin declined year-over-year due to higher raw material costs, operating margins improved from lower SG&A expenses. Nevertheless, volume remains weak amid sluggish market conditions, and additional price hikes pose a risk of loss of market share. We maintain our Hold recommendation on shares of PTV.

Despite mixed signals in the high-end computing segment, regulatory headwinds in the medical segment, and some softness in the test & instrumentation segment, Benchmark Electronics, Inc. (NYSE: BHE) should make progress with new programs in the fourth quarter. As such, we expect the ramping of new programs to improve BHE's revenue run rate in 2008. We, therefore, maintain a Hold rating on BHE shares with a six-month price target to $23.00. Weak demand and slower product and program transitions has hurt Benchmark's revenue base in the third quarter of fiscal 2007. Shares of Benchmark are currently trading at 15.7x our 2007 EPS estimate of $1.33, a discount to the industry. Despite challenging market condition, the company recorded strong new program bookings during the third quarter, which should leave it well-positioned for growth over the longer-term.

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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