Zacks Analyst Blog Highlights: Palm, Research in Motion, Nabors Industries, Patterson-UTI Energy and Grey Wolf

Business Wire,  June 30, 2008  

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CHICAGO -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Palm, Inc. (Nasdaq: PALM), Research in Motion (Nasdaq: RIMM), Nabors Industries Ltd. (NYSE: NBR), Patterson-UTI Energy Inc. (Nasdaq: PTEN) and Grey Wolf, Inc. (AMEX: GW).

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Here are highlights from Friday's Analyst Blog:

PALM Struggling to Compete

Although Palm, Inc. (Nasdaq: PALM) has significant traction with its Centro smartphone, the low selling price has resulted in an ongoing decline in revenue and margins. Moreover, the coming 3G iPhone priced at $199 is aimed at the same market as the Centro, and will likely take much of Centro's share on networks where the two compete.

Palm has new high-end products slated for launch in FY 2009, however at this point we believe it will have a hard time regaining lost share as Research in Motion (Nasdaq: RIMM) has aggressively rolled out new devices. We believe the company cannot exist in its current form as it is too small to effectively compete in the market for smartphones, and will face challenges due to its drain in cash flows. Hence, we reiterate our Sell rating on the shares.

High Price for Oil-Driller Nabors

We are maintaining our Hold recommendation on Nabors Industries Ltd. (NYSE: NBR) shares on valuation grounds. The stock has performed strongly recently on the back of an improving outlook for onshore drilling. This followed favorable winter/spring weather that meaningfully brought down the storage overhang plaguing the natural gas market over the last two years.

We expect a significant uptick in onshore actively levels later this year, which should help improve utilization and spot dayrates. Our preferred land drilling names are Patterson-UTI Energy Inc. (Nasdaq: PTEN) and Grey Wolf, Inc. (AMEX: GW) that offer comparable leverage to the cycle at much reasonable valuation levels.

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