Zacks Analyst Blog Highlights: Cox Radio, Lloyds Banking Group Plc, Acergy SA, Tech Data Corp and Town Sports International Holdings Inc.

Business Wire, March 06, 2009

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: Cox Radio (NYSE: CXR), Lloyds Banking Group Plc (NYSE: LYG), Acergy SA (NASDAQ: ACGY), Tech Data Corp (NASDAQ: TECD) and Town Sports International Holdings Inc (NASDAQ: CLUB).

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Here are highlights from Thursday’s Analyst Blog:

Investors Tune Out Cox Radio

Cox Radio (NYSE: CXR) reported 4Q08 earnings that, as expected, showed ad revenue continuing to tumble -- down 13% -- as the economy sinks. Station operating income plummeted 36% to $29.6 million, and free cash flow fell 40% during the quarter.

Fundamentals are set to get even weaker after 18 consecutive months of ad revenue declines, as CXR’s revenue and EBITDA growth are eviscerated by the recession. Exacerbating the decline are secular industry pressures, as listeners migrate to recorded music (iPods), satellite radio and the Internet. Longer term, the industry is facing the challenge of reinventing itself to develop new revenue streams and offset ad share losses to the Internet.

Lloyds Up on Results, Still a Hold

As preannounced on February 13, Lloyds Banking Group Plc (NYSE: LYG) posted statutory pretax earnings of £1.2 billion for full-year 2008, while HBOS, which was acquired by Lloyds in January 2009, had a £10.8 billion statutory pretax loss, reflecting £12.1 in impairment losses from loans and investment securities.

Positively, Lloyds enjoyed solid loan growth and strong cost controls in 2008, but impairment charges jumped 68%. We expect retail and corporate impairment charges to continue to rise as the recession takes hold, which will offset lower investment and asset portfolio writedowns and any near-term synergies of the HBOS acquisition. Accordingly, we have reduced our 2009 EPADS estimate to a loss of $1.50 per share from earnings of $0.47 per share.

Acergy Has Strong Leverage

London-based Acergy SA (NASDAQ: ACGY), 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.

Acergy's year-end earnings came in better than expected, though backlog slipped, reflecting the tentative operating environment due to commodity price and credit market overhang. With a healthy backlog, significant cash balances and no near-term refinancing requirements, Acergy remains in a comfortable position to weather the challenging and volatile business environment.

Tech Data Not Worth Chasing

Tech Data Corp (NASDAQ: TECD) is one of the leading providers of information technology (IT) products, logistics management and other value-added services. The company is the second-largest distributor of IT products worldwide. It has more than 90,000 customers in over countries.

Tech Data's 4th quarter earnings topped our estimate by a whopping $0.48. The upside was due to a much better-than-expected gross margin. The company sacrificed top-line growth in an effort to improve its gross margin. Fourth quarter sales declined 11.9% year-over-year.

CLUB Worth Joining at These Prices

Town Sports International Holdings Inc (NASDAQ: CLUB) owns and operates fitness clubs in the Northeast and Mid-Atlantic regions of the United States. The company is the fourth-largest fitness club operator in the country, measured by the number of clubs. The company currently owns and operates 164 clubs, and is a partial owner of two additional clubs. Combined, these 166 clubs serve approximately 510,000 members.

Although we acknowledge the headwinds created by the current economic recession, we consider the shares of CLUB to be undervalued at current levels. Shares of CLUB are trading at approximately 4.0x our 2009 EBITDA estimate, a multiple which we consider to be excessively low.

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