Zacks Bull and Bear of the Day Highlights: St. Jude Medical, AAR Corp., Sangamo Biosciences, State Auto Financial and Robert Half

Business Wire, Oct 10, 2008

CHICAGO -- Zacks Equity Research highlights St. Jude Medical (NYSE: STJ) as the Bull of the Day and AAR Corporation (NYSE: AIR) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Sangamo Biosciences, Inc. (Nasdaq: SGMO), State Auto Financial Corporation (Nasdaq: STFC) and Robert Half International (NYSE: RHI).

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: St. Jude Medical (NYSE: STJ)

St. Jude Medical is a leading medical device manufacturer producing consistent double-digit revenue and earnings growth over the past decade. Revenue growth is fueled by numerous product introductions, advancing in technological sophistication, and capturing higher margins.

We look for global demographic trends -- aging populations in developed nations and the rapid urbanization of developing countries -- to fuel long-term growth in this stock. These trends both give rise to growing demand for cardiovascular health care. STJ should remain somewhat insulated from the recent economic fallout.

We move our rating to Buy. Our estimates are being trimmed slightly ahead of the quarter due to the current economic upheavals, but at current prices, we still find the stock to be very attractive. This is supported by the company's consistent financial performance and relatively inelastic demand for their products. Management tends to guide investors with caution, often exceeding their own guidance.

Bear of the Day: AAR Corporation (NYSE: AIR)

AAR Corp. provides goods & services to commercial airlines and the defense establishment. On the commercial side, demand for he Wood Dale, Illinois-based company's product offerings moves with the size of the fleet -- which is declining -- while requirements for its services may grow as the airlines outsource more maintenance, repair and overhaul work.

For defense, AIR designs and manufactures mobility products, aircraft internal cargo loading/unloading systems and composite structures. AIR has leveraged its balance sheet to support its commercial aircraft leasing activities, which, at this point, is not considered a positive.

Consequently, Zacks opinion has been lowered to Sell and our target price has been adjusted to reflect the current market environment. The average P/E for the Aerospace/Defense suppliers group is 7.23.

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Sangamo Biosciences, Inc. (Nasdaq: SGMO)

Sangamo Biosciences is a biopharmaceutical company engaging in designing and developing engineered transcription factors for gene regulation. The company uses a proprietary gene regulation technology to discover and develop a new class of therapeutic candidates for cardiovascular disease, cancer, neuropathic pain and immune diseases, such as sickle cell anemia and HIV.

Sangamo uses a proprietary ZFP gene regulation technology to discover and develop a new class of therapeutic candidates for diabetic neuropathy, cardiovascular disease, cancer and immune diseases. We are optimistic about this novel technology and are encouraged to hear that the company intends to bring more drug candidates into the clinic in 2008.

State Auto Financial Corporation (Nasdaq: STFC)

Headquartered in Columbus, Ohio, State Auto Financial is a property & casualty insurance holding company formed in June 1991 by State Automobile Mutual Insurance Company (Mutual), an Ohio mutual P&C company. Founded in 1921, Mutual currently owns approximately two-thirds of STFC.

STFC is expected to release its 3Q08 results on October 23, 2008. The company reported operating losses of $0.12 per share in 2Q08, versus operating net income of $0.51 per share in the prior year quarter, driven by a record level of catastrophe losses of $76.8 million.

Robert Half International (NYSE: RHI)

Robert Half International is one of the world's largest providers of temporary staffing, project professionals and permanent placement services to the finance and accounting industries. Robert Half International provides specialized staffing and risk consulting services worldwide through Accountemps (temporary staffing), high-end administrative staffing, senior-level accounting and finance project professionals, IT consultants and full-time professionals, permanent placement and risk consulting and internal audit services.

Although the company benefited from double-digit revenue growth in 2007, concerns remain about an economic slowdown negatively impacting staffing companies like Robert Half. The operating margin is contracting, primarily due to weak operations at Protiviti [risk consulting and internal audit services], which embarked on an aggressive global staff expansion program at the same time revenues came under pressure from reduced client demand for compliance-related employees.

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.