Zacks Analyst Blog Highlights: St. Jude Medical, Inc., Carmike Cinemas, Inc., The Washington Post Co., Avis Budget Group Inc. and Robert Half International Inc

Business Wire, Oct 13, 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: St. Jude Medical, Inc. (NYSE: STJ), Carmike Cinemas, Inc. (Nasdaq: CKEC), The Washington Post Co. (NYSE: WPO), Avis Budget Group Inc. (NYSE: CAR) and Robert Half International Inc. (NYSE: RHI).

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Here are highlights from Friday's Analyst Blog:

St. Jude Medical Upped to Buy

St. Jude Medical (NYSE: STJ) 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.

Carmike Cinema Screened a Sell

Carmike Cinemas, Inc. (Nasdaq: CKEC) faces a difficult operating environment, along with its own financial challenges. Although the company has had success with recent ticket price increases, the gains have not been sufficient to offset declining attendance. We do not expect material share price appreciation from current levels and are initiating coverage

on shares with a Sell rating.

The Columbus, Georgia-based company's current balance sheet leaves it with little financial flexibility. The overwhelming majority of the company enterprise value is comprised of debt, and the management recently suspended the quarterly dividend to focus on reducing leverage. While we believe that this was a wise strategic move, the management must be diligent in ensuring that the company does not violate any existing debt covenants going forward.

Washington Post Feels the Times

More than one-third of The Washington Post's (NYSE: WPO) revenue comes from businesses in secular decline -- newspapers and broadcasting. As readers migrate to the Internet and TV viewers seek other forms of entertainment (e.g. cable, DVDs, video games and Internet), ad dollars for WPO shrink.

The battered economy and consequent weak ad spending are exacerbating the deterioration with no visibility to improvement. WPO's education division (products and services provided through the company's wholly owned subsidiary Kaplan, Inc.) and cable divisions (through its subsidiary Cable One) -- 49% and 15% of revenue, respectively -- are two bright spots, well positioned to continue generating double-digit operating income.

Avis Budget (CAR) Stop and Go

The near-term outlook for the Avis Budget Group (NYSE: CAR) is difficult to ascertain. The truck rental business is experiencing pricing pressure and the economy is weakening. Revenue enhancement and cost-cutting initiatives have been implemented that should fuel significant financial improvements.

However, earnings visibility is limited, especially with a deteriorating economy. Also, historical valuation data is unavailable for Avis Budget Group. Management has lowered guidance for 2008 in view of rising fuel costs, weaker-than-expected enplanements, and lower commercial travel volumes.

Robert Half Hold Rec Maintained

Robert Half International (NYSE: RHI) 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.

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