Zacks Bull and Bear of the Day Highlights: LifeCell, Whole Foods Market, Power Integrations and Valero

Business Wire, Oct 31, 2007

CHICAGO -- Zacks Equity Research highlights LifeCell Corp. (Nasdaq: LIFC) as the Bull of the Day and Whole Foods Market, Inc. (Nasdaq: WFMI). as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Power Integrations (Nasdaq: POWI) and Valero (NYSE: VLO). 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 LifeCell Corporation (Nasdaq: LIFC). LifeCell Corporation is a leader in the development and commercialization of human-derived, tissue-based products for use in reconstructive, urogynecologic, and orthopedic surgical procedures. The company's leading product, AlloDerm, continues to gain acceptance in the surgical tissue replacement market. We are also excited about the prospects of Strattice, a xenograft product, which is scheduled to hit the market in the fourth quarter of 2007. We see the company posting strong top-and bottom-line growth over the next few years thanks to Strattice, and recommend the shares up to the $49 level.

Bear of the Day:

Our Bear of the Day recommendation is for Whole Foods Market, Inc. (Nasdaq: WFMI). We reiterate our Sell rating on Whole Foods ahead of the company's fiscal fourth quarter earnings report, which is scheduled for November 20. We continue to believe that Whole Foods' future growth will be less profitable than in the past, and the company will be more reliant on new stores openings and acquisitions to drive its overall growth. Despite its decelerating, less profitable growth, WFMI shares are trading at nearly 32x our fiscal year 2008 EPS estimate. That represents a P/E-to-growth rate of 2.0x. This premium multiple is simply not justified, in our view. We think a more appropriate multiple is 20x our fiscal year 2008 EPS estimate or $30.

Analyst Blog:

Power Integrations (Nasdaq: POWI) is an original equipment manufacturer (OEM) of semiconductor power conversion ICs. The California Energy Commission (CEC) recently pushed out an industry mandate that should create an earnings catalyst in 2007. A solid product portfolio, new patents and product launches, along with the recently adopted worldwide energy standards should drive growth. POWI shares are trading at a 26.3x multiple of our 2008 EPS estimate (P/E). The company has a solid IP portfolio and continues to launch new products, which should drive revenue in 2008. The company had very strong design win activity in the last few quarters, although revenue on these design wins may not be recognized in the near term. While the new energy standards should boost sales in the first half of 2008, increased litigation expenses will continue to pressure the bottom-line.

Valero's (NYSE: VLO) negative quarterly earnings pre-announcement reflected the challenging refining environment of depressed margins due to high feedstock costs and seasonally weak product demand. Despite these headwinds that are expected to continue weighing on margins through the next two quarters, we still consider Valero as our core player on the U.S. refining market given the size, geographical diversity, and complexity of its operations. We continue to believe that the broad contours of the U.S. refinery scene will continue to remain favorable, characterized by robust margins and wider crude-quality spreads. Against this backdrop, we believe that the company will continue to generate strong earnings and free cash flows, and return substantial capital to shareholders.

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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