Zacks Bull and Bear of the Day Highlights: Weatherford International, Hudson City Bancorp, Broadcom, Xilinx and Vodafone

Business Wire, Sept 30, 2008

CHICAGO -- Zacks Equity Research highlights Weatherford International, Ltd. (NYSE: WFT) as the Bull of the Day and Hudson City Bancorp (Nasdaq: HCBK) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Broadcom (Nasdaq: BRCM), Xilinx (Nasdaq: XLNX) and Vodafone (NYSE: VOD).

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: Weatherford International, Ltd. (NYSE: WFT)

Houston, Texas-based Weatherford International, Ltd. is a leading manufacturer and provider of equipment and services used in drilling, completion, and production of oil and natural gas wells.

We are upgrading Weatherford shares to Buy from Hold following the recent commodity-price induced weakness in the stock, which has made valuation very compelling for this quality oilfield name. The stock is down roughly 35% in the last 12 weeks, compared to the peer group's average of a 26% pullback and the roughly 4% decline in the broader S&P 500.

Concerns about the company's over-exposure to North American onshore drilling in a tentative natural gas price environment are overdone, in our view. The company has a growing international footprint, where the outlook for its integrated project management expertise remains very favorable. Our unchanged $37 price objective reflects 2009 P/E and EV/EBITDA multiples of 12.8x and 7.5x, respectively, well within historical trading ranges.

Bear of the Day: Hudson City Bancorp (Nasdaq: HCBK)

Hudson City now operates over 100 branches throughout New Jersey, eastern New York, and Fairfield County, Connecticut. HCBK operates in a traditional thrift model; it is a community and customer-oriented retail savings bank offering traditional deposit products, residential real estate mortgage loans, and consumer loans.

Consumer lending, the bread-and-butter of many regional and local institutions, will continue to face significant headwinds to revenue growth, as the mortgage banking remains under pressure in 2008. Home equity lending should not be expected to offset this compression, as residential values are expected to moderate over the near term.

The negatives with respect to credit quality for the banking industry has yet to fully been realized and should continue to weigh on the industry as home sale continue to wane at this time. We will maintain our rating recommendation, until sustainable data points have emerged.

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Broadcom (Nasdaq: BRCM)

Broadcom is a fabless company, designing and marketing semiconductor components that network voice, video, and data traffic for applications in digital cable and satellite set-top boxes, cable and digital subscriber line (DSL) modems, high-speed local area networks (LANs), metropolitan area networks (MANs), long-haul networks, wireless communications, server solutions, and many more areas. The system-on-chip solutions provided by Broadcom inexpensively integrate analog, digital, and mixed signal circuitries that address the requirements of a broad clientele.

Broadcom's growth can slow down if the global economy weakens. The state of the housing market could dampen corporate and consumer spending.

Xilinx (Nasdaq: XLNX)

We believe Xilinx is a play on the secular trend of PLDs [programmable logic devices] replacing ASICs [application-specific integrated circuits]. PLDs do not have high development costs. The hallmark of a PLD is its flexibility. When designs have to be altered, they can be re-programmed and brought to market faster. Changes can be made even when the devices are in the field.

For Q2 of fiscal 2009, management expects revenues to be up 1% to down 3% sequentially. September is a seasonally weak quarter for the company. Gross margin is expected to be in the range of 63%-64%. We have adjusted our FY2009 estimates accordingly. We continue to rate Xilinx a Buy.

Vodafone (NYSE: VOD)

We maintain our Buy recommendation for Vodafone, the largest revenue generating international wireless carrier. The company's recent operating results are highlighted by healthy increases in mobile data usage and growth in subscribers across consolidated segments (notably in the emerging markets), offset by contraction of organic service revenue in core European markets.

Meanwhile, momentum is also building with deployment of Vodafone's 3G wireless services and the company's expansion initiative in emerging markets across Asia, Eastern Europe and Africa, primarily through acquisitions. Additionally, an attractive dividend payout and share repurchases emphasize the desire for improved shareholder return and support our valuation forecasts.

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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.

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