Zacks Bull and Bear of the Day Highlights: VistaPrint, PMI Group, Dr. Reddy's, Apple and Stoneridge

Business Wire, Sept 15, 2008

CHICAGO -- Zacks Equity Research highlights VistaPrint, Ltd. (Nasdaq: VPRT) as the Bull of the Day and PMI Group, Inc. (NYSE: PMI) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Dr. Reddy's Labs (NYSE: RDY), Apple, Inc. (Nasdaq: AAPL) and Stoneridge, Inc. (NYSE: SRI).

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: VistaPrint, Ltd. (Nasdaq: VPRT)

We are initiating coverage on shares of VistaPrint with a Buy rating and a price target of $40 per share. VistaPrint is a leading online supplier of high-quality graphic design services and customized printed products to small businesses and consumers.

VPRT has generated significant organic growth over the last several years, and we project that this growth will continue. The company's primary targeted market of small businesses with fewer than 10 employees is substantial, providing VistaPrint with significant growth potential.

The company has several competitive advantages that we expect will enable it to outperform its peers. VistaPrint's operating fundamentals are strong, and the company is in very solid financial position. We consider the current valuation to be attractive.

Bear of the Day: PMI Group, Inc. (NYSE: PMI)

PMI Group's second quarter net operating loss of $3.03 per diluted share was substantially worse than the estimates. The results suffered from increased losses in the U.S. Mortgage Insurance Operations, partially offset by strong results from International Operations.

The company also wrote off the carrying value of its investment in FGIC. The company recently sold its Australia and Asia operations, in order to support its capital and liquidity position but we do not rule out additional capital raises in the near-to-medium term. We have further increased our FY08 and FY09 loss estimates to $10.80 per share and $2.30 per share respectively, based on the company's 2Q08 results and further deterioration in the housing environment.

Our adjusted EPS targets reflect higher losses, slightly offset by increased revenues. At current levels, shares of PMI trade at 0.13x PMI's 2Q08 book value of $24.72 per share, which is significantly below its historical 2.2x high. The rise in delinquencies and defaults on loan payments may continue for a longer time than expected earlier, leading to increased losses for the mortgage insurers. We do not expect any correction to the multiple in the near future.

Latest Posts on the Zacks Analyst Blog:

Dr. Reddy's Labs (NYSE: RDY)

While fiscal 2007 was a very strong year for Dr. Reddy's Laboratories, the lack of significant generic product launches, intense pricing pressure in the generics market, and declining revenue from the Mexico CPS and betapharm businesses took a toll on the company's performance in fiscal 2008.

The company swung back to positive earnings in the fourth quarter of fiscal 2008, net income for fiscal 2008 declined almost 50% y-o-y. The company reported earnings of $0.69 per ADS in fiscal 2008. Although topline growth increased 25% y-o-y in the first quarter of fiscal 2009, earnings declined 26% due to higher costs.

Going forward, Dr Reddy's is guiding towards topline growth of 25% in fiscal 2009. Contributions from newly acquired businesses and new product launches should help the company achieve this target.

Apple, Inc. (Nasdaq: AAPL)

We maintain a Hold rating on the shares of Apple, Inc. The company has established a strong track record of earnings growth, which went from a loss of $0.07 per share in 2001, to an expected profit of $5.18 per share in the current fiscal year.

We believe Apple will continue to post solid results due to continued resurgence of its Mac computer line including MacBook Air, Mac Pro, as well as its increased sale of iPhone 3G, iTunes Movie Rentals, and major software upgrade and developer platform for iPhone 3G. We believe the stock deserves a premium valuation to its peer group.

Stoneridge, Inc. (NYSE: SRI)

Stoneridge is aggressively cutting costs and benefiting from the growth of the commercial vehicle market. Increased use of electronics in vehicles is also benefiting the company. We rate the shares a Buy with a target of $15.

Currently, shares of Stoneridge, Inc. are trading at 15.8x our 2008 EPS estimate of $0.82. Stoneridge is aggressively cutting costs and benefiting from the growth of the commercial vehicle market.

As part of its cost-control program, the company has relocated its manufacturing facilities to low-cost regions such as Mexico, China, and Estonia. Currently, the company is pursuing its plan to cease manufacturing at its facilities in Sarasota, Florida, Mitcheldean and U.K. locations and consolidating production at its Lexington, Ohio; Suzhou, China; and Tallinn, Estonia facilities.

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: 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.