Zacks Bull and Bear of the Day Highlights: Williams Companies, Huntington Bancshares, Durect Corp., Fred's, Inc. and Dell, Inc

Business Wire, Sept 2, 2008

CHICAGO -- Zacks Equity Research highlights Williams Companies (NYSE:WMB) as the Bull of the Day and Huntington Bancshares (Nasdaq:HBAN) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Durect Corp. (Nasdaq:DRRX), Fred's, Inc. (Nasdaq:FRED) and Dell, Inc. (Nasdaq:DELL).

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: Williams Companies (NYSE: WMB)

The company remains well positioned to capitalize on attractive growth opportunities in its low-risk E&P business, besides enjoying strong leverage to continued strength in natural gas liquids margins in its Midstream business. We believe that Williams Rockies development drilling program focused on the Piceance Basin is the key to its upstream growth going forward. Additionally, the company raised its earnings outlook for the rest of 2008 and 2009, citing production growth.

Bear of the Day: Huntington Bancshares (Nasdaq: HBAN)

Continued economic weakness across the Midwest markets supports the need for increased loan loss provisions. We expect this weakness in the housing and credit environments to continue to affect the company, creating the potential for negative overhangs over the next several quarters. Hence, we have reduced our 2008E and 2009E EPS and reiterate our Sell recommendation on the shares.

Latest Posts on the Zacks Analyst Blog:

Durect Corp. (Nasdaq: DRRX)

Durect Corp. currently has three products in phase II development. We are optimistic about the developing pipeline, and are pleased to see that the company filed a new drug application (NDA) for its first candidate, pain drug Remoxy, on schedule. The Food and Drug Administration (FDA) granted priority review which means a response should be out by December 10.

We also expect the company to enter into a partnership deal for Eladur shortly. This year should be catalyst-filled for Durect. In our opinion, the current share price represents an attractive entry point. We thus rate the shares a Buy with a price target of $7 and revenue forecast of $26 million.

Fred's, Inc. (Nasdaq: FRED)

Fred's, Inc. reported solid second quarter results. Sales were up 5% year-over-year to $447 million with comp-store sales growth of 4.9%, and earnings per share of $0.10. The company previously announced its sales, and its EPS matched the consensus estimate. In addition, the management reiterated its guidance for fiscal 2008. The company expects to earn $0.72-$0.76 per share for fiscal year 2008 and $0.16-$0.18 per share in the third quarter.

However, Fred's stores target lower-income customers, and those customers tend to be affected to a greater degree by higher energy and food costs. Gas prices remain high, and food prices continue to climb. Elevated food and energy prices are taking a large bite out of what low income households take home every week. Fred's results will most likely be negatively impacted by further pricing pressures.

Dell, Inc. (Nasdaq: DELL)

Dell, Inc. posted better-than-expected revenue for the second quarter of fiscal 2009 as aggressive pricing helped drive unit sales.

As a result of this pricing, gross margins fell and EPS of $0.31 were well below our expectations for $0.36. We are concerned that Dell is returning to a period of driving share gains over profits. On a positive note, it does appear that price cuts were successful in taking some share and operating expense reductions are ahead of expectations.

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