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Zacks Equity Research highlights Saks, Inc. (NYSE: SKS) as the Bull of the Day and Palm, Inc. (Nasdaq: PALM) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Chalco (NYSE: ACH) and Montpelier Re (NYSE: MRH). Full analysis of all four stocks is available at http://at.zacks.com/?id=2676. Here is a synopsis of all four stocks: Bull of the Day: Our Bull of the Day recommendation is for Saks, Inc. (NYSE: SKS). Saks reported strong second quarter results, easily beating our top-line and bottom-line estimates. The company’s business momentum remains intact, but management cautioned investors to not expect further profit margin gains in the second half of the year. This caused its shares to sell-off about 6%. We view this decline as a buying opportunity. We continue to believe that Saks will be able to deliver solid sales growth and profit margin improvements over the next several quarters. We reiterate our Buy rating and our target price of $25, which is based on P/E-to-growth ratio of 1.5x or about 37 times our fiscal year 2008 EPS estimate. Bear of the Day: Our Bear of the Day recommendation is for Palm, Inc. (Nasdaq: PALM). Palm reported revenue below expectations with EPS slightly better than our estimates due to lower than expected stock compensation for the fourth quarter of fiscal 2007. Moreover, revenue guidance for Q1 was below consensus, and margins are falling due to the release of its Foleo. Without a major new product since the Treo 600 was released in 2003 and without a meaningful upgrade since the Treo 650 was released in 2004, we believe the company will struggle to keep pace with competing products. We therefore downgrade PALM shares to Sell with a $10.00 price target. Analyst Blog: Chalco (NYSE: ACH) announced strong revenue growth for the first half of 2007 mainly due to production increases of primary aluminum products. However, its net profit fell 5% due to a slip in aluminum and alumina prices. The company should continue to benefit from strong alumina and aluminum demand in China, as the company has the best-balanced value chain of aluminum industry in China. Moreover, it plans to continue to increase its production capacity aggressively. Given its overall positive prospects, we are maintaining our Buy recommendation on Chalco shares. 2Q07 operating results for Montpelier Re (NYSE: MRH) came in at $0.56 per share, which missed our expectations, as a result of lower levels of net premiums earned and higher general and administrative expenses during the quarter. With property coverage making up more than 75% of MRH's premium base, we think the current share price reflects specific concerns for the current hurricane season, in addition to generic investor concerns for the credit quality of MRH's investment portfolio. However, following the losses for the 2005 hurricanes, MRH significantly adjusted its risk profile to reduce its exposure to extremely large losses per dollar of capital. Revenue benefits should come from additional acquisitions and office expansions over the coming years. Our new six-month price target of $20.50 price target incorporates peer price-to-book multiple 1.16x. Get the full analysis of all four stocks by going to http://at.zacks.com/?id=2649. 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. About the Analyst Blog Updated throughout every trading day, the Analyst Blog provides analysis from Zacks Equity Research about the latest news and events impacting stocks and the financial markets. About Zacks Equity Research Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term. Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons. Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today by visiting http://at.zacks.com/?id=2677. About Zacks Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time!
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