Zacks Bull and Bear of the Day Highlights: DIRECTV, MBIA, Inc., Strayer Education and NVIDIA

Business Wire, Feb 19, 2008

CHICAGO -- Zacks Equity Research highlights DIRECTV (NYSE: DTV) as the Bull of the Day and MBIA, Inc. (NYSE: MBI) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Strayer Education (Nasdaq: STRA) and NVIDIA (Nasdaq: NVDA). 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 DIRECTV (NYSE: DTV). DIRECTV has vigorously grown its free cash flow and earnings over the last two years. It is now cutting churn-related costs, and raising the quality of its subscriber base by tightening credit standards. We believe the company is poised to sustain its strong revenue and earnings growth. The nearly-completed rollout of 100 HD channels should boost ARPU, and help stem decelerating subscriber growth as DTV overtakes DISH's HD lead with twice as many HD channel offerings, while the cable companies are seven years away from catching up, in our view. We think the HD rollout coupled with the regional bell operating company (RBOC) as partner, will defend DTV's market share against cable's ability to offer video, voice and data ("triple play"), which together with recently tightened credit standards have been impeding subscriber growth.

Bear of the Day:

Our Bear of the Day recommendation is for MBIA, Inc. (NYSE: MBI). Core 4Q07 operating results were a loss of $3.30 per share missed our expectations. MBI's results were affected by the performance of its insured prime, second-lien mortgage portfolio and three insured CDO-squared transactions, which led to substantial loss reserving and impairment activity during the quarter. Though the company has raised capital, we still would not view the dividend as being secure. An overhang of a potential credit rating downgrade remains. Concerns for continued deterioration in the mortgage markets should not bode well for results over the next several quarters. Therefore, given so much continued uncertainty, we lowering our rating on the shares of MBI to a Sell from a Hold.

Analyst Blog:

While quarterly results in 2006 and 2007 have been above expectations, Strayer Education (Nasdaq: STRA) management's guidance for 2007 and 2008 portends continued double-digit growth in EPS. However, single-digit enrollment trends at mature campuses and a rise in the bad debt expense ratio (as the new campus expansion program has admitted students with lower credit credentials) are unsettling. In addition, the stock's valuation is at the upper-end of the historical range. Strayer Education is currently selling at 35.3 times trailing 12-month EPS, reflecting the company's revenue and earnings growth profile. Revenues have grown at a 22% five year compound annual growth rate (CAGR). Over the last ten years, the stock has traded in a wide P/E range of 48 to 16.

As the only remaining major independent player in the market for Graphic Processing Units (GPUs) used in PCs, NVIDIA (Nasdaq: NVDA) is well positioned to benefit from increased graphics requirements with strong momentum in its GeForce products. NVIDIA reported better-than-expected Q4 results and is forecasting sales in Q109 to be better than seasonal. However, cost-related issues with the new GeForce 8800 GT have taken a toll on margins, which should continue for a few quarters. We remain positive on NVIDIA shares and maintain a Hold rating with a new six-month price target of $28.50.

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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