Zacks Analyst Blog Highlights: TC PipeLines, TransCanada, Crown Castle, Plexus and Potash Corp

Business Wire, April 28, 2008

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: TC PipeLines, L.P. (Nasdaq: TCLP), TransCanada Corp. (NYSE: TRP), Crown Castle (NYSE: CCI), Plexus Corp. (Nasdaq: PLXS) and Potash Corp. (NYSE: POT).

See the latest posts to the Analyst Blog: http://www.zacks.com/blog/post_info.html?g=6

Here are highlights from Friday's Analyst Blog:

TC Pipelines Keeps It Flowing

TC PipeLines, L.P. (Nasdaq: TCLP) first-quarter 2008 results came in better than expected due to increased contributions from Tuscarora and Northern Borders. Management provided the first clearest possible indication of major asset draw downs in the near future from TransCanada Corp. (NYSE: TRP), the general partner.

The general partner's major capital needs this year, largely due to its pending acquisition of a major power generation asset in the U.S., is expected to prompt it to sell assets to TCLP. Equity income from Northern Border Pipeline Line (NBPL) was $19.5 million, an increase of approximately $1.7 million from the year-ago level.

NBPL's net income in the quarter was $39.5 million, a nine year-over-year increase, driven by increased transmission revenue, partially offset by higher operating costs. The increase in transmission revenue reflected overall increases in volumes sold. Tuscarora's contribution to net income was flat year over year at $3.2 million.

Crown Castle Still Impresses

We maintain our Buy rating with a higher valuation target for Crown Castle (NYSE: CCI), a leading operator of wireless communications towers in the USA and Australia, following its first quarter fiscal 2008 financial results, better than our estimates.

Overall performance has been driven by substantial demand for more tower space to facilitate high-speed data services, in particular 3G wireless and WiMax technologies. The acquisition of Global Signal has positioned the company as the largest tower operator in the U.S.A., providing better-than-expected cost synergies for the merged entity.

Although a substantial level of debt remains a concern, management has provided a financial outlook that its recurring cash flow per share is likely to increase by 25% during fiscal 2008. Our long-term view regarding the wireless tower industry continues to be positive and we believe the company is well positioned to capitalize on emerging telecom network deployment opportunities.

Buy-Rated Plexus Well Positioned

Plexus Corp. (Nasdaq: PLXS) has posted several quarters of strong results, with significantly higher than expected revenue and bookings. Although EPS has not been as strong, much of this is related to a higher tax rate. We believe that PLXS is among the best positioned in the industry and is poised to grow in the medical segment as well.

The company's outlook continues to be strong in spite of macro economic concerns, which have yet to affect its customers. We, therefore, maintain a Buy rating on the stock.

Plexus is currently trading at 13.9x our 2008 earnings estimate of $1.91 per share, a discount to its peer group. On a P/S basis, the stock is trading at 0.7x estimated 2008 revenue, still a discount to its peer group. We believe that over the long-term, PLXS is in the top tier of the EMS universe with the highest gross margin among its EMS peer group and above industry growth rates.

Potash Corp. Enhancing Growth

Potash Corp. (NYSE: POT) is the world's leading producer of potash and the world's largest fertilizer producer. The company has leverage to higher fertilizer application rates, higher crop plantings, increasing demand for biofuels and rising crop prices. The company is located in low cost areas and financials are solid. Hence, we rate the stock a Buy.

The company enjoys significant cost advantage with regard to raw materials. All potash produced by the company in Saskatchewan is in the area, where extensive potash deposits are found. Moreover, the company has lower cost nitrogen operations in Trinidad due to the long-term, lower-cost gas contracts with Natural Gas Company of Trinidad and Tobago Limited as well as proximity to the U.S. market.

Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.

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