Zacks Bull and Bear of the Day Highlights: Unilever, N.V., Hudson City Bancorp, H&R Block, American Capital Agency and Avanex Corp

Business Wire, July 2, 2008

CHICAGO -- Zacks Equity Research highlights Unilever, N.V. (NYSE: UN) as the Bull of the Day and Hudson City Bancorp (Nasdaq: HCBK) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on H&R Block (NYSE: HRB), American Capital Agency Corp. (Nasdaq: AGNC) and Avanex Corporation (Nasdaq: AVNX).

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: Unilever, N.V. (NYSE: UN)

The benefits from the implementation of "Path to Growth," Unilever 2010, One Unilever, and Accelerating Change strategies, and the company's strong cash flows are positives for future prospects. In addition, the simplified management structure should improve operational decisions and the one-to-one equivalence between PLC and NV shares should improve financial transparency. Impressively, positive pricing fully compensated for rising input costs in the first quarter of 2008. The Buy rating is maintained on Unilever New York shares (UN).

Bear of the Day: Hudson City Bancorp (Nasdaq: HCBK)

Even though the shares trade at a discount to the peer median (on a P/E basis), with 67% of the loan portfolio in residential real estate in the New York metropolitan area, considering the industry overhangs, we remain cautious given the current valuations. Our rating remains a Sell, though a weaker one. Our six-month price target of $15.50 per share equates to a negative 11.7% expected total return.

Latest Posts on the Zacks Analyst Blog:

H&R Block (NYSE: HRB)

We are upgrading our rating on shares of H&R Block, Inc. from Sell to Hold following the release of Q4 financial results. Although the fallout from the mortgage business implosion will likely be felt for some time to come, and we continue to have significant concerns regarding other aspects of HRB's business, we believe that negative and positive aspects of the company's outlook are now roughly balanced.

American Capital Agency Corp. (Nasdaq: AGNC)

American Capital Agency's initial public offering (IPO) in May of this year raised net proceeds of $286 million. Shares, originally priced at $20.00 per share, have slipped approximately 17% since the offering. The company is among a handful of new mortgage REITs that will invest exclusively in residential pass through and CMOs that backed are by the U.S. government or government-sponsored agencies.

American Capital Agency has the opportunity to earn good risk-adjusted returns as spreads have widened on agency securities due to the continued problems in residential housing markets. The biggest threat to AGNC near-term is a rise in short-term rates, which we expect as the fed tries to fight inflation. Higher short-term rates will increase the company's costs of funds and make spread investing much less profitable. We maintain our Hold recommendation on the shares.

Avanex Corporation (Nasdaq: AVNX)

Avanex is a leading provider of optical communication solutions. The company posted Q3:FY08 results with strong gross margin performance and sales modestly above expectations leading to a pro forma EPS beat.

Avanex also reported one of its highest design win quarters ever, led by transmission products, and pointed to normalizing market order trends with visibility remaining limited. Going forward, management expects margins to gradually move northwards as new product families are introduced into the revenue stream. The management expects to double its revenues by 2011.

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