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: Sanderson Farms (NASDAQ: SAFM), ViroPharma (NASDAQ: VPHM), Allion Healthcare Inc. (NASDAQ: ALLI), Nordstrom Inc. (NYSE: JWN) and Developers Diversified (NYSE: DDR).
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Here are highlights from Tuesday’s Analyst Blog:
Sanderson Farms Stays Plucky
Sanderson Farms (NASDAQ: SAFM) is the 4th largest poultry processing company in the U.S. The improved efficiencies at the company's poultry complexes in Georgia and Mississippi, along with the new facility in Waco, Texas, should improve unit operating costs and increase production levels in fiscal 2009.
However, grain costs increased substantially in fiscal 2008 resulting in a loss. Even though grain prices have declined, the Hold rating is maintained.
ViroPharma's Phase 3 Setback
This morning, ViroPharma (NASDAQ: VPHM) announced that its phase III trial evaluating maribavir as a prophylaxis in allogenic stem cell, or bone marrow, transplant (SCT) patients did not achieve its primary endpoint of a reduction in cytomegalovirus (CMV) disease within 6 months.
We are clearly disappointed in the outcome of the phase III maribavir SCT trial. Maribavir was key to our investment thesis given the expected launch of a generic Vancocin product potentially during the second half of 2009.
Buy Allion Healthcare Up to $6
Allion Healthcare Inc. (NASDAQ: ALLI) is a national provider of specialty pharmacy and disease management services focused on HIV/AIDS patients. We expect ALLI to report 4Q08 financial results on March 11, 2009.
Our current revenue and EPS estimates are $92M and $0.11 respectively, versus consensus estimates of $93M and $0.12. Our Buy recommendation remains intact at current levels pending the 4Q08 earnings release.
Nordstrom Upgraded Pre-Earnings
Seattle-based specialty retailer Nordstrom Inc. (NYSE: JWN) operates a chain of department and outlet stores. We are upgrading Nordstrom shares from Sell to Hold.
We think that the federal government's stimulus package could lead to an explosive rally in JWN shares. This is not to say that we have become more bullish on Nordstrom or retailers in general; we have not. We continue to believe that consumer discretionary spending will not return to the levels of the last several years.
DDR Continues to De-Lever
Developers Diversified (NYSE: DDR) announced more assets sales today. The company sold 5 Mervyn’s locations and one shopping center in Florida. Net proceeds from the shopping sale will be about $22 million to DDR. DDR has another $100 million of property under contract or LOI [letter of intent].
The company has now paid back all of its unsecured notes due in 2009. DDR only has $198 million of wholly owned and JV [joint-venture] property level mortgage debt maturing in 2009. 2010 debt maturities, excluding extension options, are over $1.2 billion and DDR still has too much debt, about $7 billion in total.
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