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Zacks Bull and Bear of the Day Highlights: Hain Celestial Group, Washington Mutual, Iconix Brand Group, Alpharma and Finisar Corporation

Business Wire, May 7, 2008

CHICAGO -- Zacks Equity Research highlights Hain Celestial Group (Nasdaq: HAIN) as the Bull of the Day and Washington Mutual (NYSE: WM) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Iconix Brand Group (Nasdaq: ICON), Alpharma, Inc. (NYSE: ALO) and Finisar Corporation (Nasdaq: FNSR). 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: Hain Celestial Group (Nasdaq: HAIN)

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Healthy internal sales growth, driven by consumer demand for natural food products, and management's focus on improving profit margins bode well for Hain Celestial Group's outlook. In addition, management's acquisition strategy adds incremental growth to the company's organic sales growth. The company has been successful implementing price increases with another scheduled for implementation in May 2008.

Bear of the Day: Washington Mutual (NYSE: WM)

WM's 1Q08 earnings at a negative $1.40 per share were abysmal, significantly missing our and the Street's estimates. The loss was driven by the elevated level of provisioning ($3.5 billion) during the quarter. Even though Moody's raised the WM's rating to stable from negative (following the $7.0 billion capital raise), the significant reduction of the dividend payment, and the fact that the company has undertaken restructuring some major business operations, we remain negative on the shares of WM.

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Iconix Brand Group (Nasdaq: ICON)

Despite continuing to deliver robust revenue and earnings growth, Iconix Brand Group shares have sold-off over 26% year-to-date. The sell-off is due to weak consumer spending coupled with problems in the credit markets, which could prevent Iconix from making additional acquisitions.

The company is maintaining its previously issued 2008 guidance of revenue in the range of $250 million to $260 million and diluted earnings per share of between $1.35 and $1.40. This is predicated on acquiring an additional $30 million of acquisition revenue that falls into the remainder of this year. If the company is unable to close those necessary acquisitions, it will fall short of consensus EPS estimates.

We are lowering our estimates to reflect the growing chance that Iconix will not be able to meet its current outlook. Nevertheless, the company's long-term growth story remains intact, and we view the current sell-off as a buying opportunity. We are upgrading the stock from Hold to Buy.

Alpharma, Inc. (NYSE: ALO)

Alpharma, Inc. is a pharmaceutical company with operations in human and animal pharmaceuticals. With the sale of the generics and API business segments, Alpharma is focusing on establishing itself as a specialty pharmaceuticals company.

We expect 2008 to be another transitional year for the company with earnings declining significantly, mainly due to increased sales, general and administrative (SG&A) spending related to the launch of Flector Patch. In the absence of any potential catalysts, investor focus will remain on the acceptance and ramp-up of Flector Patch. Although we expect earnings to rebound in 2009, we remain concerned about Kadian's growth prospects and the sales ramp of Flector Patch.

Finisar Corporation (Nasdaq: FNSR)

As a leading provider of fiber optical products as well as network test and monitoring systems, Finisar Corporation has gained a strong position in short-distance, low-cost portion of the Ethernet market. With growing demand for bandwidth, particularly for video and IPTV, demand for high-speed bandwidth solutions such as 10 Gigabit Ethernet has increased rapidly. Given its leadership position in LAN/SAN and Metro Ethernet products, and its strong position in the growing 10/40 Gb/s optical transceiver market, we expect the company to experience strong top-line growth in fiscal 2009.

Though the company missed revenue expectations in two out of the past three quarters, it has delivered better third quarter revenue and expects strong results for fourth quarter 08 and first quarter 09. Shares of Finisar Corporation are currently trading at a P/E multiple of 14.8x 2009 EPS estimate of $0.09. On a P/S multiple, FNSR is trading at 0.8x our 2009 revenue estimate of $1.60 per share. With a strong product portfolio and vertically integrated business model, FNSR is well-positioned in the fiber optic market.

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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Business Services Industry

Zacks Bull and Bear of the Day Highlights: Hain Celestial Group, Washington Mutual, Iconix Brand Group, Alpharma and Finisar Corporation

Business Wire, May 7, 2008

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