Zacks Bull and Bear of the Day Highlights: HCP, Inc., Avici Systems, Monster Worldwide and D.R. Horton

Business Wire, Feb 21, 2008

CHICAGO -- Zacks Equity Research highlights HCP, Inc. (NYSE: HCP) as the Bull of the Day and Avici Systems (Nasdaq: AVCI) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Monster Worldwide, Inc. (Nasdaq: MNST) and D.R. Horton, Inc. (NYSE: DHI). 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 HCP, Inc. (NYSE: HCP). The company had a solid 4th quarter, with FFO [funds from operations] per share increasing 22% (excluding charges) over the year-earlier quarter. Operations are holding up in the company's core portfolio and the company will be selling assets to pay down debt in 2008. HCP was a heavy acquirer in 2007, making $4.7 billion of investments. High debt levels are the main negative of HCP. We are updating our recommendation to a Buy. HCP is valued below its peer group, and the company has a good yield, over 6%. We also think health care will continue to outperform other sectors in 2008.

Bear of the Day:

Our Bear of the Day recommendation is for Avici Systems (Nasdaq: AVCI). Although strong end-of-life router sales are driving better-than-expected revenue, our long-term outlook for Avici Systems remains unchanged. We believe Soapstone offers a unique product and are encouraged by its compatibility with Nortel and Extreme, however we expect revenues to ramp slowly. Six months from now, investors will likely be concerned about a lack of visibility into revenue growth from software. As such, we maintain a Sell rating on the shares with a six month price target to $6.50.

Analyst Blog:

Monster Worldwide, Inc. (Nasdaq: MNST) reported revenues of $354 million in Q4, up 18.5% year-over-year and 5% quarter-over-quarter, in-line with our and the consensus estimates. International revenues grew 59% year-over-year and were once again the driver of revenue growth. Approximately half of the out-performance was attributable to a smaller-than-expected loss from the company's minority investment in ChinaHR, with the remainder coming from better-than-expected growth internationally and aggressive share repurchases. Internet advertising and fees revenue was down 7.5% year-over-year. Excluding non-recurring items, EPS came in at $0.41, beating our estimate of $0.38.

D.R. Horton, Inc. (NYSE: DHI) reported a first quarter loss of $0.41 per diluted share. This is due to weaker gross margins, higher-than-anticipated overhead costs, and charges for inventory impairments and write-offs of deposits related to land option contracts. If we had taken the charges out, homebuilding operations would have reported a profit of $0.03. So far, the company has been successful in generating cash flow, lowering land lots owned and optioned, and cutting the number of homes in inventory. Unfortunately, the initiatives have come at the expense of profitability. For the remainder of the year, we expect gross margin to remain under pressure due to weaker average selling prices and increased incentive use.

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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