Zacks Analyst Blog Highlights: Somaxon Pharmaceuticals, Qualcomm, Barrick Gold, Maxim Integrated Products and Cleveland Cliffs

Business Wire, May 8, 2008

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: Somaxon Pharmaceuticals (Nasdaq: SOMX), Qualcomm (Nasdaq: QCOM), Barrick Gold Corporation (NYSE: ABX), Maxim Integrated Products, Inc. (Nasdaq: MXIM) and Cleveland Cliffs (NYSE: CLF).

See the latest posts to the Analyst Blog: http://www.zacks.com/blog/post_info.html?g=6

Here are highlights from Wednesday's Analyst Blog:

Somaxon Upside is Tremendous

Somaxon Pharmaceuticals (Nasdaq: SOMX) filed the new drug application (NDA) for insomnia drug Silenor in late January 2008. The FDA accepted the application in April 2008. Somaxon is currently in discussion with several interested parties for commercialization of the drug in early 2009. We see a partnership more likely to happen after the approval.

In the meantime, Somaxon is preparing to present additional phase III data on Silenor at upcoming scientific conferences designed to increase the awareness of the product ahead of the launch. At this point, the shares are enormously under-valued with a market capitalization of only $80 million. Management is sitting on $30 million in cash and less than a year away from launching a $500 million potential drug.

Buy Qualcomm to $50

We reiterate our Buy recommendation and the same valuation target for Qualcomm (Nasdaq: QCOM), the largest developer of digital wireless chipsets based on CDMA technology, following the company's second quarter fiscal 2008 financial results (ended March). As further support to our rating, the company raised its financial outlook for full fiscal year 2008, despite facing a weak U.S. economy.

Qualcomm's fundamentals remain compelling as robust growth in the 3G wireless handset market (for both WCDMA and CDMA 2000 technology) are driving healthy product sales. Multiple WCDMA operators have adopted Qualcomm's BREW technology. In addition, design wins for Gobi mobile Internet solutions and the Snapdragon chipset platforms, along with major customer agreements for Firethorn financial mobility solutions and continuous network deployments of MediaFLO USA, are indicative of Qualcomm's long-term growth prospects.

Barrier Gold Shines Brightly

Barrick Gold Corporation (NYSE: ABX) is the largest gold mining company in the world. Profitability is increasing due to rising gold prices and synergies from the Placer Dome acquisition. The company is likely to benefit from the various expansion projects in the pipeline. The 100% acquisition of the Cortez mine will boost gold production.

In the first quarter, the company reported earnings of $514 million ($0.59 per share), compared to the net loss of $159 million ($0.18 per share) in the year-ago period. High gold prices bolstered the strong rise in net income. All production was sold at prevailing market prices for a realized price of $925 per ounce, up 140% from the prior-year quarter, as gold prices reached 27-year high.

For the full year 2008, the company maintains its production guidance of 7.6 8.1 million ounces of gold at total cash costs of $390-$415 per ounce. It also guided to 380-400 million pounds of copper at total cash costs of $1.15-$1.25 per pound.

Opportunity to Pick Up Maxim

Maxim Integrated Products, Inc. (Nasdaq: MXIM) is an OEM of semiconductor analog and mixed signal ICs. March quarter revenue was down significantly. Forward guidance is for a 0.5%-4.6% revenue increase in Q4. Management did not announce too many details on the quarter, and expects to restate results from 2000 through 2006 pursuant to the stock option issue.

Management has announced the reduction of capital expenditure in 2008 and 2009, in response to the broad macro weakness. The stock is trading at five-year lows, indicating strong upside potential when these issues are resolved.

MXIM shares are currently trading at a 12.1x multiple of our 2008 EPS estimate (P/E). Management has refocused the business around the consumer and computing markets, although it remains active in other markets such as industrial and communications as well. The change of focus has started to tell on margins. Management expects to offset this negative impact through volume gains and cost containment.

Cleveland Cliffs Shows Strength

Cleveland Cliffs (NYSE: CLF) has solid fundamentals, rising prices and increasing demand of its products. Strong industrial growth in China triggered demand for steel, resulting in higher demand for iron ore. The company's portfolio of both established and recent iron ore and metallurgical coal assets positions it to capitalize on global industry dynamics in 2008 and beyond.

We believe stronger commodity prices should boost revenues significantly for CLF. As a result, we rate the shares a Buy with a target of $185.00. Currently, the stock is valued at 15.2x our 2008 earnings of $11.00.

Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.