Zacks Equity Research highlights AK Steel Holding (NYSE: AKS) as the Bull of the Day and Align Technologies (Nasdaq: ALGN) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on CV Therapeutics (Nasdaq: CVTX) and Avon Products (NYSE: AVP). 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 AK Steel Holding (NYSE: AKS). We expect the company’s cost reduction efforts and renegotiated higher-priced contracts will prevent excessive margin deterioration in light of higher commodity costs. The company is seeking headcount reductions. In the last three years, AKS has lowered its headcount by 26% to 6,600 from 9,000. We believe the company will do so gain, owing to higher contract prices and workforce reduction. Hence, we reiterate the Buy rating with a six-month target price of $43.00.
Bear of the Day:
Our Bear of the Day recommendation is for Align Technologies (Nasdaq: ALGN). Competition risk has increased slightly as Ormco continues to market its low-end products that mostly compete with Invisalign Express. Nonetheless, it remains unclear how much of the market ALGN can continue to grow consistently, especially given increased reliance on GP utilization.
Headquartered in Palo Alto, CA, CV Therapeutics (Nasdaq: CVTX) is a biopharmaceutical company focused on applying molecular cardiology to the discovery, development and commercialization of novel, small molecule drugs for the treatment of cardiovascular diseases. The company announced in early March 2007 that the MERLIN-TIMI-36 trial failed to achieve its primary endpoint in acute coronary syndrome (ACS). The potential still exists to expand the label from second-line to first-line angina, but sales will probably never reach blockbuster levels. In the meantime, CVT must aggressively reduce cash burn in order to ever achieve profitability.
CEO Andrea Jung has transformed Avon Products (NYSE: AVP) over the last seven years. The company has grown aggressively in the Beauty products category, especially overseas in developing markets. Management instilled financial discipline in the company through the multi-year supply chain cost reduction program along with the Product Line Simplification (PLS) and Strategic Sourcing Initiatives (SSI) announced in the second half of 2006. With the costs of PLS and SSI being well above expectations in the second quarter and resulting in considerable margin compression, the rating on the stock was reduced to a Hold.
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.
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