Zacks Bull and Bear of the Day Highlights: Qualcomm, Navigant Consulting, Chalco, Celgene and Smith International

Business Wire, Oct 29, 2008

CHICAGO -- Zacks Equity Research highlights Qualcomm Inc. (Nasdaq: QCOM) as the Bull of the Day and Navigant Consulting (NYSE: NCI) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Aluminum Corporation of China, Ltd., or Chalco (NYSE: ACH), Celgene Corp. (Nasdaq: CELG) and Smith International (NYSE: SII).

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: Qualcomm Inc. (Nasdaq: QCOM)

We maintain our Buy rating for Qualcomm, the largest developer of digital mobile chipsets based on CDMA technology, ahead of fourth quarter fiscal 2008 financial results (ending September 30). The company's fundamentals remain compelling as it has several industry-leading innovative products for a variety of wireless applications.

Qualcomm's legal settlement with Nokia for royalty related issues and a new 15-year licensing agreement significantly strengthens business planning. It is our view that demands for mobile broadband services and adoption of 3G cellular technologies will continue to grow throughout the world.

However, over the near-term, an extremely challenging global economy is likely to generate lumpy chipset sales and associated average selling prices. Based on current valuation levels and general economic concerns, we reduce our six-month valuation target for Qualcomm.

Bear of the Day: Navigant Consulting (NYSE: NCI)

Shares of Navigant Consulting are trading at 14.9x and 13.0x our 2008 and 2009 EPS estimates, respectively, and at a 7% premium to the 2009 peer group average. On the second-quarter earnings call, management effectively lowered its full-year outlook for operations in the core business.

Until we see further evidence that the NCI's business has fully recovered from the issues that plagued the company throughout much of 2007, we do not believe that a premium valuation, relative to the peer group, is warranted.

Our price target reflects of multiple of 13x our 2008 EPS estimate. NCI will report Q3 results on October 30, 2008.

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Aluminum Corporation of China, Ltd., or Chalco (NYSE: ACH)

Chalco is the third-largest alumina producer in the world by output. The company expects to benefit from the long-term growth of the Chinese economy as well as through capacity expansion, acquisitions, and joint ventures.

Chalco is investing in its own mine production and is also diversifying its production base by expanding overseas. However, higher raw material and power costs forced the company to reduce its aluminum capacity by 1 million tons in 2008.

Celgene Corp. (Nasdaq: CELG)

Celgene is a fully integrated biotechnology company focused on discovery, development and commercialization of drugs in the area of cancer and immune/inflammatory diseases. The acquisition of Pharmion brings three medically meaningful products -- Thalomid, Revlimid and Vidaza -- into market, which will drive growth in 2008 and beyond.

Celgene has all the makings of a Buy-rated stock such as solid new product story, decent pipeline and incredible 84% four-year earnings growth. However, we are concerned about the tough competition from Velcade and other products for myelodysplastic syndrome and multiple myeloma. Label expansion on Revlimid and Vidaza into other hematological cancers should offer upside for Celgene. We believe all this is currently reflected in the stock.

Smith International (NYSE: SII)

Smith International reported inline third-quarter 2008 results. Net income rose 27% year-over-year to $211.9 million, driven by seasonal drilling recovery in Canada, higher U.S. distribution sales volumes and contributions from its W-H Energy acquisition, while revenue increased 27% to $2.85 billion.

The company also raised its fourth-quarter 2008 earnings outlook, aided by demand acceleration, price increases, cost discipline, and successful acquisition integration. The recent sell-off has made valuation even more compelling for this quality oilfield service name.

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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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Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.