Zacks Analyst Blog Highlights: Dow Chemical, Rohm and Haas, Sierra Wireless, Agrium Inc. and Strayer Education Inc

Business Wire, Feb 17, 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: Dow Chemical (NYSE: DOW), Rohm and Haas (NYSE: ROH), Sierra Wireless (NASDAQ: SWIR), Agrium Inc. (NYSE: AGU) and Strayer Education Inc. (NASDAQ: STRA).

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Here are highlights from Friday's Analyst Blog:

DOW Cuts Dividend 1st Time Ever

Dow Chemical (NYSE: DOW) today cut its dividend by 64%. This is the first cut in 97 years and the first cut in the company's history. This was signaled by the CEO on January 27, so it is not a surprise. With a dividend yield over 17%, compared to the Fed Funds near zero, this was not a surprise to the market (the yield is still over 6% after the cut).

In fact, this is part of a cash saving move involving a reduction of 5,000 employees and the closure of 20 plants. There is a need to preserve the company's credit rating, should funds be needed to close the Rohm and Haas (NYSE: ROH) acquisition, which is currently on hold and costing the company $90 million per month. This issue is still pending in the courts.

Sierra Wireless Upped to Buy

We upgrade our rating to Buy for Sierra Wireless (NASDAQ: SWIR), a leading developer of OEM wireless modem cards and access solutions, following the company s recent financial results, achieving strong free cash flow generation and effective cost reduction initiatives.

Sierra's 4th quarter 2008 financial results were mixed with revenue challenged by intensifying competition in the PC OEM [original equipment manufacturing] market, coupled with unfavorable economic conditions. Net income, however, was significantly above our estimates due to reduction in operating expenses.

Agrium Can Weather the Storm

Agrium Inc. (NYSE: AGU), based in Alberta, Canada, is a major retailer of agricultural products and services in North and South America, a leading global wholesale producer and marketer of all three major agricultural macronutrients such as nitrogen, potash and phosphate, and a premier supplier of micronutrients and specialty fertilizers.

Agrium is growing through acquisition and organic expansion. The acquisition of United Agri-Products (UAP) is driving revenues and profits supported by an expanded product line in the major business segment. However, the company is affected by the global credit crunch resulting in postponement of fertilizer purchases by farmers.

Strayer at a Good Entry Point

Strayer Education Inc. (NASDAQ: STRA), which offers undergraduate and graduate degree programs through Strayer University and Strayer University Online, reported financial results for the 4th quarter ending December 31, 2008. Quarterly earnings were $1.71. Though earnings were a penny above expectations, the Strayer's stock is down over 14% due to management's guidance of 1.96 to $1.98 per diluted share compared to our prior estimate of $2.01.

We reiterate our Buy rating on Strayer Education. Revenue growth continues to be robust at 28% in the 4th quarter, and new student enrollment was above expectations, increasing 20% from the prior year to 45,697 students. Management intends to open 11 new campuses and a second Global Online Operations Center in 2009. The first 5 campuses (in Augusta, GA; Huntsville, AL; Allentown, PA; Charleston, WV and Salt Lake City, UT) are already in operation. The second Global Online Operations Center (located in Salt Lake City, Utah) will open for the 2009 summer term.

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