Zacks Bull and Bear of the Day Highlights: ViroPharma, Cooper Tire & Rubber, Tesoro Corp., Sonic Foundry and Shutterfly

Business Wire, August 4, 2008

CHICAGO -- Zacks Equity Research highlights ViroPharma (Nasdaq: VPHM) as the Bull of the Day and Cooper Tire & Rubber (NYSE: CTB) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Tesoro Corp. (NYSE: TSO), Sonic Foundry (Nasdaq: SOFO) and Shutterfly, Inc. (Nasdaq: SFLY).

Full analysis of all these stocks is available at http://at.zacks.com/?id=2676.

Here is a synopsis of all five stocks:

Bull of the Day: ViroPharma (Nasdaq: VPHM)

ViroPharma's move to acquire Lev Pharmaceuticals works to greatly diversify the product portfolio and ease investor concern that a generic Vancocin would be devastating to its financial results. On the contrary, by 2010 we think both Cinryze and maribavir could be on the market and generating positive income. Couple this with an estimated $300 million in cash still to be on hand after the deal closes, and still at least another year of exclusive Vancocin sales, and the companies fundamental position is rock solid. We are maintaining our Buy rating with a price target of $16.

Bear of the Day: Cooper Tire & Rubber (NYSE: CTB)

High gasoline prices and concerns about a slowing economy have resulted in lower consumer demand for replacement tires. About 65% of the raw materials are petroleum-based and crude oil prices are rising continuously. In addition, the price increases of natural and synthetic rubber are significant drivers of higher raw material costs as well. The company anticipates raw material, energy, and transportation costs will remain elevated throughout 2008.

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Tesoro Corp. (NYSE: TSO)

Tesoro reported weak second-quarter results, reflecting reduced product margins on the back of record feedstock costs and increased operating expenses. The company's realized margin during the quarter was down 52% from the year-earlier level as record crude oil prices and anemic product demand squeezed margins.

We believe that high feedstock and operating costs will continue to weigh on near-term margins, which accounts for our negative earnings revision. However, our long-term view of the business remains favorable, as margins appear to have bottomed and valuations have become particularly compelling.

Sonic Foundry (Nasdaq: SOFO)

Although revenue was slightly below our Q3 estimate, higher-margin service revenue helped Sonic Foundry post a small profit after noncash expenses. Not only was this ahead of our most recent EPS estimate, but it was also better than what we expected entering the year before the Q1 shortfall.

We would still like to see the company sustain its revenue run rate and show some operating leverage in fiscal 2009, and therefore maintain conservative estimates. However, we are incrementally more positive on the stock. We maintain a Hold recommendation and $1.00 price target.

Shutterfly, Inc. (Nasdaq: SFLY)

Shutterfly is a leading provider of Internet-based social expression and personal publishing service. We rate the shares a Hold following the release of Q2 financial results.

Shutterfly has no pure-play, publicly traded peer at this time. While competition in the space is intense, many of the company's competitors are owned by larger corporations. Given the outlook for negative earnings growth in 2008, along with uncertainties related to consumer spending in the slowing economy and potential pressures stemming from price discounting by competitors such as Snapfish, we believe that the company should trade at a discounted multiple.

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