Zacks Bull and Bear of the Day Highlights: The Medicines Company, SanDisk, AK Steel, JAKKS Pacific and Apple

Business Wire, Oct 23, 2008

CHICAGO -- Zacks Equity Research highlights The Medicines Company (Nasdaq: MDCO) as the Bull of the Day and SanDisk (Nasdaq: SNDK) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on AK Steel (NYSE: AKS), JAKKS Pacific Inc. (Nasdaq: JAKK) and Apple Inc. (Nasdaq: AAPL).

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: The Medicines Company (Nasdaq: MDCO)

The Medicines Company specializes in acute care hospital cardiology products. It acquires and develops products that are either in the later stages of clinical development or are already on the market.

Its lead product is Angiomax, an anticoagulant approved in the U.S. and other countries for use in patients undergoing coronary angioplasty procedures. Recent positive data from two trials, ACUITY and HORIZON, has helped boost Angiomax sales in the past few quarters.

We think this trend will continue. We are also looking forward to the Cleviprex ramp and an interim analysis on phase III candidate, Cangrelor, in the fourth quarter. We are optimistic on the future of the company and see $30 as a near-term target.

Bear of the Day: SanDisk (Nasdaq: SNDK)

SanDisk is the largest supplier of flash storage card products based on NAND technology used in digital cameras, multimedia cellular phones, USB flash drives, and a growing variety of other digital consumer devices. SanDisk reported disappointing Q3 earnings results due to negative product gross margin and excess inventory.

We expect the company's earnings losses will be followed through the first half of 2009 even with substantial cost-cutting and restructuring efforts. We believe pricing is likely to remain weak until demand improves, which is not likely until the consumer spending picture strengthens.

We believe there is risk of further downside. SanDisk does not expect any meaningful improvement through the first half of 2009. We therefore maintain our Sell rating on SNDK shares with a six month price target of $10.00.

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AK Steel (NYSE: AKS)

Ohio-based AK Steel is a leading producer of flat-rolled carbon, stainless, electrical steel and tubular products. In the third quarter, AK Steel reported a robust 70% increase in profits. Earnings from continuing operations were $1.67 per diluted share of common stock, compared to $0.97 per diluted share in the third quarter of 2007. The rise in earnings was primarily driven by higher selling prices. Net sales were $2,157.6 million on shipments of 1.48 million tons, compared to the previous year's sales of $1,721.7 million on shipments of 1.61 million tons.

We expect that AK Steel's cost-reduction efforts and renegotiated higher-priced contracts will prevent excessive margin deterioration in light of higher commodity costs. The company has greater product diversification compared to its peers and is focusing on markets and products which have the greatest long-term potential to succeed.

JAKKS Pacific Inc. (Nasdaq: JAKK)

JAKKS Pacific is a leading manufacturer of toys and leisure products. The company's primary product lines include Hannah Montana, WWE, Cabbage Patch, EyeClops, Pokemon, and others. The company also holds multiple licensing agreements for its TV Games and TeleStory products.

We maintain our Hold rating on shares of JAKKS Pacific following the release of third-quarter results. Although we are encouraged by the company's product lineup, concerns related to continued margin pressures cause us to believe that a discounted valuation is appropriate for shares of JAKK. Additionally, we expect the upcoming holiday shopping season to prove challenging.

Apple Inc. (Nasdaq: AAPL)

Apple Inc.'s lower price point on the 3G iPhone has taken market share from its competitor Research in Motion, producer of the Blackberry. Moreover, Macintosh continues to take share from traditional PCs.

Apple reported strong Q4 results; however the company provided a cautious outlook for Q109. Apple has a history of beating its own expectations. Thus we remain positive on the stock. However, we do have concerns over the potential for slowing iPod sales as the category matures, and don't believe recent launches will be enough to drive a meaningful upgrade cycle.

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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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