Zacks Analyst Blog Highlights: Jabil Circuit, Inc., Inc., Dean Foods Co., 3Com Corp., Genta Inc. and Aracruz Celulose S.A

Business Wire, Sept 30, 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: Jabil Circuit, Inc. (NYSE: JBL), Dean Foods Co. (NYSE: DF), 3Com Corp. (Nasdaq: COMS), Genta Inc. (Nasdaq: GNTA) and Aracruz Celulose S.A. (NYSE: ARA).

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Here are highlights from Monday's Analyst Blog:

Jabil Circuit to Trade In-Line

Headquartered in St. Petersburg, Florida, Jabil Circuit, Inc. (NYSE: JBL) is one of the largest global suppliers of electronic manufacturing services (EMS) used in communication products, computer peripherals and automobile industries. Revenue for the most recent quarter was $3,264.9 million, an increase of 4.3% from $3,129.8 million reported in the year-ago quarter. This was in line with the company's guidance of $3.2 billion to $3.3 billion range. GAAP EPS in the quarter was $0.28 versus $0.06 in the comparable quarter last year.

For the first quarter of fiscal 2009, Jabil expects revenue in the range of $3.40 billion to $3.60 billion, with an estimated core operating margin range of 3.0% to 3.4%. Core EPS is anticipated to be in a range of $0.30 to $0.38 range. Selling, general and administrative expenses are estimated to be approximately $121 million, research and development costs are expected to be approximately $9 million, and amortization of intangibles to be approximately $9 million.

Dean Foods Buying Opportunity

Management at Dean Foods (NYSE: DF) has taken definitive actions to improve shareholder value from the spin-off of TreeHouse Foods in 2005 to a $15 per share special dividend in 2007. Management has focused on the branded products business, reduced SKUs [stock-keeping units], and integrated strategic acquisitions in the Dairy Group.

However, 2007 and 2008 have been challenging due to increased dairy costs. Though costs are expected to remain volatile in 2008, the decline in the stock's price has provided a buying opportunity, since any relief from high dairy costs will dramatically accelerate earnings growth. The Buy rating is maintained.

3Com Will Keep at Lower Levels

3Com Corporation (Nasdaq: COMS) 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.

Genta to Stay Trading Below $1

Genta Incorporated (Nasdaq: GNTA) is a biopharmaceutical company focused on developing and commercializing drugs for the treatment of cancer. The company's leading candidate, Genasense, got a 'non-approvable' notice from the FDA on December 15, 2006. The company filed an appeal with the FDA in April 2007 and got a positive response from the FDA in March 2008.

Additionally, positive results from the AGENDA trial will support the worldwide filing of Genasense as a treatment for melanoma. However, results from the phase III trial are not expected before mid-2009. Therefore, we rate the shares Hold with a target price of $0.70 on a market cap of $26 million.

Aracruz Pulp Markets Tight

Brazil-based Aracruz Celulose S.A. (NYSE: ARA) is the world's largest producer of bleached eucalyptus pulp, as well as one of the low-cost producers of this product. The company is responsible for 31% of the global supply of the product, which. is used in the production of a wide range of paper products, including premium tissue, printing and writing papers, liquid packaging board, and specialty papers.

We are keeping our Hold recommendation on Aracruz. We believe the company's expansion plans are solid, and that expansion should enhance the stock's value over the long term. However, the international pulp and paper markets remain tight, and the short-term outlook for pulp prices is positive. Recent results were disappointing.

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