Zacks Bull and Bear of the Day Highlights: Salesforce.com, Fidelity National, Newcastle Investments and Group 1 Automotive

Business Wire, Feb 29, 2008

CHICAGO -- Zacks Equity Research highlights Salesforce.com (NYSE: CRM) as the Bull of the Day and Fidelity National Information Services (NYSE: FIS) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Newcastle Investment Corporation (NYSE: NCT) and Group 1 Automotive Inc. (NYSE: GPI). 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 Salesforce.com (NYSE: CRM). Salesforce.com, inc. is the market leader in the on-demand CRM space and continues to see substantial subscriber and customer growth. Although the stock has been volatile, we believe over the long-term CRM is the leader in a potentially huge market for on-demand software. Moreover, the company has had excellent traction into larger customers with thousands of subscribers, reflecting greater acceptance, and should continue to displace Siebel/Oracle. We therefore reiterate our Buy recommendation on CRM shares with a six-month price target of $83.00.

Bear of the Day:

Our Bear of the Day recommendation is for Fidelity National Information Services (NYSE: FIS). To drive growth, Fidelity National Information Services has been an active acquirer of companies, and we believe the eFunds acquisition will offer both top-line and cost synergies with increased operating leverage. However, cash flow is falling, and the company has been leveraging its balance sheet to fund its growth through acquisition strategy. While FIS reported double digit revenue growth in its TPS and LPS segment in 2007, overall growth is being offset by a declining market for check services and a slowing mortgage market. We therefore downgrade FIS shares to Sell with a six-month price target of $35.00.

Analyst Blog:

Shares of Newcastle Investment Corporation (NYSE: NCT) have tumbled over the past year as the mortgage markets are still in disarray. The company continued to take charges in the 4th quarter due primarily to impairments on sub-prime loans. The company continues to sell assets, at losses, to pay down debt and shore up the balance sheet. With share price declines, the current yield in now above 25% although, we expect a large cut in 2008. Even with the expected cut, NCT still represents good value. The yield should stay above 15%. Although in this environment mortgage REITs are risky investments, and further deterioration in the credit markets could impact the company's ability to stay in business.

Group 1 Automotive Inc. (NYSE: GPI) has generated the majority of its recent growth through acquisitions. The recently reduced interest rates will further provide growth to the company. GPI aggressively manages its costs and has dealerships with above-average profitability. Further, the company has strong geographical presence. On February 26, 2008, Group 1 Automotive reported fourth quarter and full-year 2007 results. In the fourth quarter, earnings per diluted share (EPS) were $0.70, compared to $0.67 in the prior-year period. Revenues increased by a modest 1.5% to $1.53 billion from $1.51 billion. On a same-store basis, revenues declined 1.9% to $1.43 billion, reflecting declines of 2.4% and 3.8% in new vehicle and total used vehicle revenues, respectively.

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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