Zacks Analyst Blog Highlights: Forest Laboratories, Inc., CarMax, Applied Micro Circuits Corp., Cabot Oil & Gas Corp. and Osiris Therapeutics, Inc

Business Wire, Sept 25, 2008

CHICAGO -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Forest Laboratories, Inc. (NYSE: FRX), CarMax, Inc. (NYSE: KMX), Applied Micro Circuits Corp. (Nasdaq: AMCC), Cabot Oil & Gas Corp. (NYSE: COG) and Osiris Therapeutics, Inc. (Nasdaq: OSIR).

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Here are highlights from Wednesday's Analyst Blog:

Forest Labs Sees Generic Threat

Forest Laboratories, Inc. (NYSE: FRX) focuses on the therapeutic areas of the central nervous, cardiovascular and respiratory systems, as well as research and development programs that address a range of health conditions. Principal brands include Lexapro for depression, Namenda for Alzheimer's disease and Benicar for high blood pressure.

Forest has a number of other candidates in their pipeline that have the potential to be very big contributors but none likely to make a meaningful impact by the time Lexapro goes generic. Management's most recent goal is to double their current pipeline by 2012 a lofty goal in just three years time, although one that is necessary to fill the enormous hole that key drugs will leave beginning in 2012. We rate the shares Hold with a $32 price target.

CarMax in Struggling Market

CarMax (NYSE: KMX) is the nation's largest retailer of used vehicles. Headquartered in Richmond, Virginia, CarMax, Inc. operates as a specialty retailer of used vehicles (96% of sales) such as cars and light trucks as well as new vehicles (4% of sales).

The company's move into new markets and growth in existing markets are likely to strengthen volumes. Thus, we rate the stock a Hold. Currently, shares of CarMax are trading at 38.0x our fiscal 2009 EPS estimate of $0.40, which is at a significant premium to the industry median of 12.9x.

Applied Micro Outlook Neutral

Applied Micro Circuits Corporation (Nasdaq: AMCC), headquartered in San Diego, California, is a leading provider of high-bandwidth integrated circuits (ICs) for optical telecom networks. The company primarily focuses on designing chips for controlling voice and data transmission in high-speed local area networks (LANs) and wide area networks (WANs). It also caters to automated test equipment (ATE), computing and military applications.

Revenues should grow 3.0-3.5% sequentially in the second quarter of fiscal 2009 (ending September), which includes IP revenues of $3 million. We are maintaining our Hold rating with a target price of $8.

Cabot Oil Positives Priced In

Cabot Oil and Gas (NYSE: COG), based in Houston, Texas, is an independent oil and gas exploration company with producing properties in the U.S. and Canada. The company was founded over 100 years ago.

Cabot's recent results have benefited from high commodity prices and increased volumes. While commodity prices have eased, the company should continue to benefit from acquisitions-related volume gains in the coming quarters.

Osiris Thera a Stem-Cell Play

Osiris Therapeutics, Inc. (Nasdaq: OSIR) is a company founded to commercialize stem cell products from adult bone marrow, a readily available and non-controversial source.

We are highly encouraged by what data we've seen so far. Osiris could potentially be developing a blockbuster drug in Prochymal. We are reiterating our Buy rating and $22 price target.

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