Zacks Bull and Bear of the Day Highlights: Bristol-Myers Squibb, Cadence Design Systems, Amphenol, Cumulus Media and Wright Medical Group

Business Wire, Oct 24, 2008

CHICAGO -- Zacks Equity Research highlights Bristol-Myers Squibb (NYSE: BMY) as the Bull of the Day and Cadence Design Systems (Nasdaq: CDNS) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Amphenol Corp. (NYSE: APH), Cumulus Media Inc. (Nasdaq: CMLS) and Wright Medical Group (Nasdaq: WGMI).

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: Bristol-Myers Squibb (NYSE: BMY)

Growth of mega-blockbuster Plavix is helping Bristol drive EPS growth up near 16% in 2008. Patent expirations loom very large in Bristol's future starting in 2011 when the Plavix patent expires.

That being said, the company does have an attractive mid-to-late-stage pipeline, and the company has been dramatically working to reduce costs and shed less profitable and non-core businesses.

We believe the company is an attractive take-over candiate at this level for a larger pharma name such as Sanofi or Pfizer. EPS growth at rates near the top of big pharma and a very attractive valuation prompted our recent upgrade from Hold to Buy. We expect the shares to trade up near $26.

Bear of the Day: Cadence Design Systems (Nasdaq: CDNS)

Cadence appears to be in big trouble as the company's CEO resigned unexpectedly amid mounting financial problems and disappointing results. Adding to the upheaval, the company delayed its Q308 earnings results, expected to be released on October 22nd, on improper accounting issues related to contract revenues signed during Q1.

Cadence has been losing share to Synopsys and is struggling through a downturn in the semiconductor cycle. Cadence also withdrew its bid for Mentor Graphics, further dimming its growth prospects.

We maintain a Sell rating on the shares and cut our six month price target to $2.50.

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Amphenol Corp. (NYSE: APH)

Amphenol Corp. recently reported record revenues of $863.7 million in the company's 3rd quarter, exceeding the Street's consensus of $835 million, on the back of strong growth in the global communications, military and aerospace markets. Currency translations contributed $16 million. Gross margin of 32.6% was roughly flat year-over-year but slightly down from 32.7% in Q2, while operating margin improved to 19.8% from 19.5% a year ago and was flat quarter over quarter. EPS of $0.63 easily beat the consensus of $0.60.

Going forward, management has narrowed the guidance range and reiterated the high end of the fiscal year guidance. Revenues are now expected to come around $3.2-$3.3 billion. EPS is now anticipated to come around $2.36-$2.38. Guidance for the 4th quarter was raised, as well.

Cumulus Media Inc. (Nasdaq: CMLS)

Cumulus Media Inc., based in Atlanta, Georgia, is the second largest radio broadcasting company based on the number of stations and the third largest based on revenue. We expect the company to miss revenue guidance when it reports quarterly results on November 6, as the decline in ad revenues accelerates industry-wide.

More concerning, however, is near industry-high leverage, which presents the risk of violating bank covenants if cash flow shrinks faster than we expect. Management increased leverage and returned free cash flow to shareholders in a massive buyback as the stock price continued to fall a tactic that in hindsight was ill-timed.

Wright Medical Group (Nasdaq: WGMI)

Wright Medical Group has about a 5% market share in the core portion of the $17 billion global orthopedic implant market. The company has typically gained share by its focus on niche technologies like metal-on-metal and ceramic-on-ceramic implants. As such, hip and knee implants currently comprise approximately 60% of the company's total sales.

We expect these end-markets to experience a slow down during the next 12-18 months related to the current economic climate. We expect continued difficult overall implant growth for Wright Medical Group relative to peers. The company has seen somewhat flattish pricing, partly due to price discounting in larger accounts, somewhat limited product offerings, and international price cuts.

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