Zacks Bull and Bear of the Day Highlights: Acergy S.A., CRA International, Somaxon Pharmaceuticals, 3Com Corp. and Taubman Centers

Business Wire, Sept 29, 2008

CHICAGO -- Zacks Equity Research highlights Acergy S.A. (Nasdaq: ACGY) as the Bull of the Day and CRA International (Nasdaq: CRAI) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Somaxon Pharmaceuticals (Nasdaq: SOMX), 3Com Corporation (Nasdaq: COMS) and Taubman Centers, Inc. (NYSE: TCO).

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: Acergy S.A. (Nasdaq: ACGY)

London-based Acergy, previously known as Stolt Offshore S.A. (SOSA), is a leading oilfield contractor engaged in the designing, procurement, building, installation, and servicing of a range of offshore surface and sub-surface equipment for the oil and gas industry. We are upgrading Acergy S.A. ADRs to Buy from Hold following the stock's roughly 50% pullback since July.

We believe that the recent weakness has made valuation very compelling for this leading oilfield contractor. Acergy has been successfully pursing a strategic shift towards the deepwater markets, enjoying a leading market position with strong growth prospects across all of its regions. Acergy's growing backlog, which now stands at $3.6 billion, offers strong long-term earnings and cash flow visibility.

Last year's successful completion of the challenging and technically complex Greater Plutonio project (the company's single-largest project to date) offshore Angola demonstrated the company's capabilities in deepwater engineering and construction. Acergy remains well positioned to capitalize on the positive outlook for subsea engineering and construction services demand over the coming years.

Bear of the Day: CRA International (Nasdaq: CRAI)

CRA International, formerly Charles River Associates, is a global provider of legal, regulatory, business consulting, and other expert services through its more than 680 consultants. CRA International's consultants combine economic and financial analysis with expertise in litigation and regulatory support, business strategy and planning, market and demand forecasting, policy analysis, engineering, and technology strategy.

We are downgrading our rating on shares of CRAI from Hold to Sell. The company reported third-quarter financial results that fell significantly short of Street expectations. The company's utilization rate fell to 71% in the third quarter of 2008, down from 74% in the second quarter of this year, and from 76% in the year-ago period.

Given that this is the second significant earnings miss within the last three quarters, we believe that a discounted multiple, relative to the peer group average, should be applied to shares of CRAI until management is able to provide sufficient evidence that it has a strong handle on the company's operations.

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Somaxon Pharmaceuticals (Nasdaq: SOMX)

Somaxon Pharmaceuticals is a specialty pharmaceutical company focused on the development and in-licensing of product candidates in the fields of psychiatry and neurology. The company is focused on advancing the clinical development of existing product candidates, with a long-term strategy designed to build a portfolio suite by sourcing and in-licensing products where Somaxon believes they can expand upon significant untapped demand.

The company filed the new drug application (NDA) for insomnia drug Silenor in late January 2008. The FDA accepted the application in April 2008. The PDUFA [Prescription Drug User Fee Act] is now set for December 1, 2008. Somaxon is currently in discussion with several interested parties for commercialization of the drug in early 2009. Management is looking for a co-promotion agreement in the U.S. However, we do not believe a deal will be reached until after the FDA's decision.

3Com Corporation (Nasdaq: COMS)

3Com Corporation has become a leader in the Chinese enterprise networking market.

We are concerned about the future of COMS business in China as it reduces its dependence on Huawei as a reseller, which contributes close to a quarter of revenue. However, Huawei revenue is slowing at a slower rate than expected. With improved results in 2008 and in the first quarter of 2009, we believe current holders of COMS shares would be better served by holding the shares for a more attractive exit point. We therefore maintain a Hold rating on the shares of 3Com.

Taubman Centers, Inc. (NYSE: TCO)

Taubman is a real estate investment trust (REIT) engaged in owning, developing, acquiring, and operating regional shopping centers throughout the U.S. A large number of these shopping centers are strategically located in major metropolitan areas. The company's five largest non-anchor tenants are: The Gap (3.5% of mall GLA as of June 30, 2008), Forever 21 (3.3%), Limited Brands (2.6%), Abercrombie & Fitch (2.5%), and Foot Locker (1.9%).

We are concerned about retail stocks in a very uncertain economic environment. Consumer spending patterns are sluggish, and we expect 2008 to be one of the worst holiday shopping seasons in years. TCO missed our 2Q FFO estimates by $0.08 per share due to lower than expected fee income and higher expenses.