Zacks Bull and Bear of the Day Highlights: NCR Corp., Ness Technologies, Churchill Downs, Cox Radio and Oscient Pharmaceuticals

Business Wire, May 9, 2008

CHICAGO -- Zacks Equity Research highlights NCR Corporation (NYSE: NCR) as the Bull of the Day and Ness Technologies (Nasdaq: NSTC) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Churchill Downs, Inc. (Nasdaq: CHDN), Cox Radio (NYSE: CXR) and Oscient Pharmaceuticals (NYSE: OSCI).

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: NCR Corporation (NYSE: NCR)

Following several years of stagnant revenue growth, NCR has begun to post gains in its Financial Self-Service segment, its largest division. We are encouraged that the company is now posting earnings growth through its improved top-line, which we believe is sustainable for the foreseeable future as its customers seek to cut costs through increased automation. We therefore maintain our Buy rating on NCR shares with a six-month price target of $32.00.

Bear of the Day: Ness Technologies (Nasdaq: NSTC)

Ness Technologies is a small player in a challenging market for IT services. Outside the Israeli government market, the company faces intense competition from established players, such as Accenture Ltd., IBM, Hewlett Packard, Computer Sciences Corporation, Electronic Data Systems, and others. Although the company showed improved results in the last two quarters, this was on the heels of three disappointing quarters and is partially due to currency exchange gains. Given this thesis, we maintain a Sell rating on NSTC shares with a six-month price target of $7.50.

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Churchill Downs, Inc. (Nasdaq: CHDN)

We reiterate our Buy rating on shares of Churchill Downs following the release of first quarter financial results. The company currently faces significant operating pressures resulting from disputes with horsemen's associations in Florida and Kentucky. However, the pullback in share price over the last week has created a buying opportunity, in our opinion.

The company has established a platform that should enable it to grow revenues and earnings via a variety of channels, including the expansion of alternative gaming. We believe that a proper valuation of Churchill's shares should reflect not only the value of the current operations, but also the potential for increased revenue and earnings stemming from additional alternative gaming a the company's properties. Further, the company's low leverage and significant real estate holdings should be taken into account.

Cox Radio (NYSE: CXR)

Cox Radio continues to generate healthy free cash flow and maintains the strongest balance sheet in the industry. At 2.3x debt/EBITDA, Cox Radio is significantly underleveraged relative to its peers (radio group median is 6.5x), which provides it with room to continue repurchasing shares at its current rate. In turn, this should bolster ROE and provide some downside price cushion, as well as implicitly increase the stake of its parent company, Cox Enterprises, which we think will inevitably buy the 65% of CXR it does not already own.

However, CXR's ad revenue and EBITDA growth are being squeezed by the economic downturn, exacerbating secular industry pressures, as listeners migrate to recorded music (iPods), satellite radio and the Internet. CXR shares are trading at a slight premium to its radio broadcasting peers. We think this premium is deserved given its healthy free cash flow and low level of leverage relative to the group.

Oscient Pharmaceuticals (NYSE: OSCI)

Oscient Pharmaceuticals Corporation is a commercial-stage biopharmaceutical company focused on the selling and marketing of products to community-based primary care physicians. The company's core focus is on cardiovascular / metabolic and respiratory diseases. Oscient currently has two marketed products in its portfolio Antara and Factive.

We believe the Oscient sales force has done a commendable job in driving growth for its products despite the intense competition in the market. We also believe the stock is undervalued at current levels. Upcoming catalysts could be in the form of announcements regarding the in-licensing of a third product or the signing of a partnership deal for pipeline candidate Ramoplanin.

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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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