Zacks Analyst Blog Highlights: Website Pros, CF Industries, Vertex Pharmaceuticals, Johnson & Johnson and Iron Mountain

Business Wire, April 4, 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: Website Pros (Nasdaq: WSPI), CF Industries (NYSE: CF), Vertex Pharmaceuticals, Inc. (Nasdaq: VRTX), Johnson & Johnson (NYSE: JNJ) and Iron Mountain (NYSE: IRM).

See the latest posts to the Analyst Blog:

http://www.zacks.com/blog/post_info.html?g=6

Here are highlights from Thursday's Analyst Blog:

Website Pros Highly Recommended

Website Pros (Nasdaq: WSPI) is a leading provider of Web services for Small and Medium Businesses (SMBs). The company uses a factory approach that it can leverage over thousands of customers. The addition of Web.com provides excellent cross-selling opportunities as WSPI can offer its higher-end services to existing Web.com customers.

Moreover, the acquisition will be accretive in 2008 and result in cost savings of nearly $12 million. With a falling reliance on Discover as a partner, we believe WSPI's valuation will increase. We therefore reiterate our Buy recommendation on WSPI with a $15.00 price target.

Target $125 on CF Industries

CF Industries (NYSE: CF) has leading market shares in many key fertilizers. Strong domestic and international grain markets have produced an exceptionally high global demand for fertilizer, translating into substantially higher selling prices for all the products.

As a result, we rate the shares a Buy with a target of $125.00. This is 11.9x our 2008 estimate. Currently, CF Industries Holdings is valued at 9.9x our 2008 estimate of $10.49.

Retail Slowdown Affecting Taubman

Taubman Centers (NYSE: TCO) reported solid 4Q07 and full-year 2007 results with FFO increasing of 4.8% and 12.5% over comparable periods in 2006. Better-than-expected results were due to rental rate growth at existing malls and contributions from new mall openings and expansions. Retail spending continues to support mall fundamentals, and all operating metrics reported positive results in year-over-year comparisons.

However, the U.S. economy is faltering and consumer spending patterns in early 2008 are not encouraging. We are concerned about retail stocks in an inflationary and weakening economic environment.

Taubman is currently trading 15.8x our 2008 projected FFO [funds from operations] estimates, which is about 21% higher than regional mall sector averages and 30% higher than retail strip FFO averages. We sense that retail stocks could be in for a rougher road and expect a continued pullback as more bad news on the economy comes out. It seems that spending will moderate in the next six months as consumers face increasing energy costs, and a free-falling housing market.

Will Vertex Reach Its Potential?

Vertex Pharmaceuticals, Inc.'s (Nasdaq: VRTX) stock has had a wild ride over the past several months; it was previously down big as timeline slippage for the filing of Telaprevir and increasing cash burn rates have frustrated shareholders. However, the clinical data, on Telaprevir and other pipeline candidates, continues to look very strong.

There is little doubt in our mind that Telaprevir has blockbuster sales potential. As these issues ebb and flow, Vertex stock will probably continue to be volatile. The burn rate and high expectations will likely keep the shares from breaking out to the upside until the approval of the drug perhaps in 2011. In the meantime, Vertex's stock can probably be traded effectively, buying when the name goes below $20 and selling after a strong run-up.

Vertex represents an attractive long-term opportunity based on the potential blockbuster sales of Telaprevir. Other pipeline candidates such as VX-702, VX-770, and VX-509 also look very interesting. However, catalysts seem limited until the second half of the year and Vertex is burning cash at a significant rate.

At less than $20, Vertex becomes a Buy based on the attractiveness of Telaprevir, or the notion that Johnson & Johnson (NYSE: JNJ) may decide to acquire the entire company in order to obtain the U.S. rights to the drug. This is a distinctive possibility in our view, although we believe Vertex management would be hesitant to sell at that depressed level.

Iron Mountain Target Adjusted

While we remain encouraged by strength in Iron Mountain's (NYSE: IRM) storage services business, much of the company's growth has been through acquisitions, which involves integration risk. This becomes more difficult with the company's growing revenue base as it will be required to make larger acquisitions.

Moreover, we are concerned about IRM s rising level of debt. We therefore maintain a Hold rating on IRM shares, and lower our six-month price target to $28.00. This is based on a P/S multiple of 1.8x our 2008 sales estimate, the high-end of its peer group range.

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

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