Zacks Bull and Bear of the Day Highlights: Vocus, Hubbell, Intel, Hartford Financial Services and Dean Foods

Business Wire, Nov 3, 2008

CHICAGO -- Zacks Equity Research highlights Vocus Inc. (Nasdaq: VOCS) as the Bull of the Day and Hubbell Inc. (NYSE: HUB.B) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Intel Corp. (Nasdaq: INTC), Hartford Financial Services Group (NYSE: HIG) and Dean Foods Company (NYSE: DF).

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: Vocus Inc. (Nasdaq: VOCS)

As a leading provider of software for public relations (PR) management, Vocus Inc. has achieved 37 consecutive quarters of revenue growth since the launch of its first on-demand version in 1999. With minimal competition and strategic acquisitions, Vocus has grown its customer base from 766 customers in fiscal 2003 to 3,144 in Q308.

Moreover, the company has a strong track record of beating expectations. We also believe that the "Software as a Service" model that VOCS uses is defensive in the currently uncertain environment.

In view of this, we maintain our Buy recommendation on Vocus but lower our price target to $34.00 given a weak IT spending market. Our target price represents a P/S [price-to-sales] multiple of approximately 6.7x our 2009 revenue estimate of $96.0 million, or $5.11 per share, which we believe Vocus can reach over the next six months.

Bear of the Day: Hubbell Inc. (NYSE: HUB.B)

Orange, CT-based Hubbell is an original equipment manufacturer (OEM) of electrical products. The firm operates and reports results along three segments Electrical, Power and Industrial Technology. The Electrical Products segment serves the commercial, residential, industrial, utility and telecom/other markets.

Hubbell reported third-quarter 2008 results that exceeded both top and bottom line expectations. The good storm season was the primary driver of growth in the last quarter, although pricing actions and acquisitions also contributed. The company is benefiting from restructuring actions, with management continuing to attribute some of the margin expansion to production efficiencies and improved cost management.

The share price dropped sharply in September, but has stabilized since. We tend to think that there could be further downside, given the recessionary macro-economic trends and the positive correlation between Hubbell's growth and the growth of the national GDP.

Additionally, both residential and nonresidential construction activity appears to be slowing and could worsen in 2009. Consequently, we are downgrading the shares to Sell.

Latest Posts on the Zacks Analyst Blog:

Intel Corp. (Nasdaq: INTC)

We are reiterating our Hold rating on the shares of Intel Corp., the world's largest manufacturer of semiconductor products.

September quarter revenue was in-line with the consensus, while the EPS exceeded. Forward guidance is for a revenue decline of -1% to a revenue increase of 7% in the fourth quarter. Since the second half of the year is usually stronger than the first, revenue growth may be expected.

Intel is trading at 9.5x our 2008 EPS estimate of $1.67. The company is solidifying its position in the higher-end server market, which is a key advantage. 2008 could be a challenging year for margin expansion, since launch activity related to the Nehalem microarchitecture is expected to continue through November.

Hartford Financial Services Group (NYSE: HIG)

Hartford Financial Services shares had lost more than half their value Thursday morning, based on the concerns that the company may need to raise additional capital soon.

Further, the management was not able to provide a forecast of the year-end capital margin due to the ongoing market volatility. 3Q08 core losses of $1.40 per share were substantially worse than the estimates. The company also lowered its guidance for FY08 to $4.30 4.50 per share from $9.20 9.50 per share earlier. After reviewing the results and revised management guidance, we are reducing our FY08 and FY09 EPS estimates and downgrading our recommendation on the shares to a Sell.

Dean Foods Company (NYSE: DF)

Dean Foods is a leading processor and distributor of milk and other dairy products in the U.S. as well as a leading manufacturer of various specialty food products. Management has focused on the branded products business, reduced SKUs, and integrated strategic acquisitions in the Dairy Group.

However, 2007 and 2008 have been challenging due to increased dairy costs. Though costs are expected to remain volatile in 2008, the decline in the stock price has provided a buying opportunity, since any relief from high dairy costs will dramatically accelerate earnings growth. The Buy rating is maintained.

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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.

About the Analyst Blog

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