Zacks Analyst Blog Highlights: Wells Fargo, Fifth Third, Comerica, China Telecom and China Unicom

Business Wire, June 22, 2009

http://www.profit.zacks.com/

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: Wells Fargo (NYSE: WFC), Fifth Third (Nasdaq: FITB), Comerica (NYSE: CMA), China Telecom (NYSE: CHA) and China Unicom (NYSE: CHU).

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Here are highlights from Friday’s Analyst Blog:

States of Unemployment

There are now 14 with double-digit unemployment (27.4%) vs. none a year ago. Eight states have seen their unemployment rates increase by 5.0 points or more, and nine more have seen increases of at least four points.

While all states have seen unemployment go up, four states have had increases of less than two points, and three of them were low unemployment states to begin with. Only two states, Nebraska and North Dakota, have unemployment rates that are under 5%, while a year ago 25 of states did.

The states with double digit unemployment include many of the nation's most populated states (CA, FL, IL, IN, MI, NC, OH). High rates of unemployment will mean more loan defaults and foreclosures. Thus banks with high exposure to high unemployment states are particularly vulnerable:

Wells Fargo (NYSE: WFC) has lots of exposure to California and to the Carolinas (thanks to its purchase of Wachovia). Fifth Third (Nasdaq: FITB) is highly exposed to Ohio, Michigan and Florida. Comerica (NYSE: CMA) has a big exposure to Michigan.

China Telecom Leads Fixed-Lines

We reiterate our Hold rating for China Telecom (NYSE: CHA), the largest fixed-line service provider in China. The company entered the Chinese mobile telephony market through the acquisition of CDMA business and network assets from China Unicom (NYSE: CHU) for RMB 110 billion (US$16 billion).

The company remains the market leader in fixed-line phone service and is well positioned to benefit from the rapidly growing Chinese wireless market. In our opinion, CHA's attractive long-term opportunities arise from its dominant position in broadband, the emerging need for wireless and business from value-added services.

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