Zacks Bull and Bear of the Day Highlights: Sciele Pharmaceuticals, Avnet, Berkshire Hathaway, Eli Lilly and Anglo American

Business Wire, June 12, 2008

CHICAGO -- Zacks Equity Research highlights Sciele Pharmaceuticals (Nasdaq: SCRX) as the Bull of the Day and Avnet, Inc. (NYSE: AVT) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Berkshire Hathaway (NYSE: BRK.A), Eli Lilly & Co. (NYSE: LLY) and Anglo American, Plc. (Nasdaq: AAUK).

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: Sciele Pharmaceuticals (Nasdaq: SCRX)

Sciele Pharma, Inc. is a specialty pharmaceutical company engaged in the sale of prescription products for the treatment of cardiovascular, metabolic, obstetrical and gynecological, and pediatric and gastroenterological conditions and disorders. The company's broad focus and deep product pipeline offer substantial growth opportunities over the next several years.

We believe the current share price represents an attractive entry point for long-term investors and we rate the stock a Buy. We recommend purchase up to the $28 level.

Bear of the Day: Avnet, Inc. (NYSE: AVT)

Avnet is being adversely affected by the price war between Intel and AMD; it is expanding its relationship with AMD even as its Intel business shrinks. The company has over $1.3 billion in long-term debt and liabilities (25% debt-to-total capital), which is substantially high. Avnet had approximately $1.28 billion of long-term debt and liabilities at the end of Q2, up from approximately $1.26 billion at the end of the prior quarter. While the Access acquisition will raise revenue and EPS, the valuation appears rich, in our opinion.

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Berkshire Hathaway (NYSE: BRK.A)

We maintain our Hold recommendation on the shares of Berkshire Hathaway. We expect Berkshire's core revenue and earnings growth trends to experience momentum pressure, based on softness from the insurance cycle and a moderation of investment income growth and the weight of a large low-interest earning cash position.

Although the stock is trading at the lower end of its ten-year average price-to-book range, we anticipate additional multiple compression, albeit slight, as we think book value growth will continue to stall and return on equity will remain in the low to mid-single-digits range.

Eli Lilly & Co. (NYSE: LLY)

Eli Lilly and Co. is entering a challenging period, brought about by recent pipeline disappointments, most notably uncertainty surrounding its antiplatelet drug, Prasugrel. Although we believe the underlying fundamentals of the company remain solid, pipeline setbacks and lack of clarity on prasugrel will likely limit the upside to the stock. We also believe that sales of Zyprexa, for schizophrenia and bipolar disorder, will begin to decline in 2008 as generic Risperdal eats into market share.

Underlying value should continue to be supported by growth of antidepressant Cymbalta in 2008. Zyprexa will continue to be a mega-blockbuster, but sales should start to slip due to international generics and the imminent launch of a generic Risperdal in the U.S. With prasugrel removed from our model, earnings growth beginning in 2009 is significantly negatively affected. For 2008, we look for earnings of $3.92. Management remains optimistic that prasugrel will make it to market although we think this is unlikely without significantly more data to support the net benefits of the drug.

Anglo American, Plc. (Nasdaq: AAUK)

We are maintaining a Hold recommendation on Anglo American. The company is benefiting from strong demand for commodities around the globe and increased production. However, risks to global economic growth remain, and the strength of the South African rand could have a significant impact on future earnings.

The fundamental support for commodity prices is strong GDP growth worldwide, in particular the ongoing industrialization of China, Russia and India. Management is confident that commodity prices will remain strong this year and has ruled out a slowdown in demand from China.

We are also pleased by the company's restructuring program. The company said that its plans for a "full de-merger" of its paper and packaging division were progressing, and that it was continuing with a phased exit strategy from its 41.8% stake in Anglogold.

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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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