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Apple, Bayer A.G., Ford Motor, Frontline, Dominos Pizza and Brasil Telecom

^{Published on 2010-06-25 14:16:52 - Market Wire}
 

CHICAGO--([ BUSINESS WIRE ])--[ Zacks Equity Research ] highlights Apple Inc (Nasdaq: [ AAPL ]) as the Bull of the Day and Bayer A.G. (OTC: [ BAYRY ]) the Bear of the Day. In addition, Zacks Equity Research provides analysis on Ford Motor Co. (NYSE: [ F ]), Frontline Ltd. (NYSE: [ FRO ]), Dominos Pizza, Inc. (NYSE: [ DPZ ]) and Brasil Telecom S.A. (NYSE: [ BTM ]).

Full analysis of all these stocks is available at [ http://at.zacks.com/?id=2678 ].

Here is a synopsis of all five stocks:

[ Bull of the Day ]:

Apple Inc (Nasdaq: [ AAPL ]) has experienced tremendous growth, driven by the success of its iPhones and increased Mac shipments. In our opinion, the new iPhone 4 will be another milestone achievement for the company, helping it continue on its growth path.

Moreover, we are highly positive about the companya™s iPad launch, which is expected to revolutionize mobile computing and will provide a boost to the company's revenues and earnings in 2010. The second-quarter results beat the Zacks Consensus Expectation on the back of strong iPhone sales, increased Mac sales, new product launches, increased consumer spending and a rebound in computer shipments.

We expect the company to report stronger results going forward, thereby providing above market gains. Hence we upgrade the rating on the stock to Outperform.

[ Bear of the Day ]:

Although Bayer A.G.'s (OTC: [ BAYRY ]) first-quarter earnings per share of 1.20 Euros surpassed 0.91 Euros reported in the year-ago period, we are concerned about the disappointing performance of the CropScience segment in the most recent quarter. The delay in approval of Xarelto also concerns us.

Furthermore, the failure of Nexavar to prolong the overall survival in patients suffering from advanced non-squamous non-small cell lung cancer (NSCLC) in a late stage study is a setback for the company.

The competitive environment in which Bayer operates is a further challenge for the company. Given these factors, we downgrade the stock to Underperform from Neutral with a price target of $54.00.

Latest Posts on the Zacks [ Analyst Blog ]:

Zacks #1 Stocks at Bargain Prices

There are very few investment strategies that have stood up againt the test of time, with wave after wave of the hottest new fund managers crashing and burning when market conditions evolve.

But fortunately for the Zacks investment community, we have two realtively simple yet powerful tools at our disposal to help us find stocks with the best chance to outperform over the long haul.

The Zacks Rank

The first is the Zacks Rank, which uses fluctuations in earnings estimates to assign a ranking from 1 to 5 to a universe of more than 4000 stocks. Of this group, only 5%, or roughly 250 stocks, can be assigned a coveted #1 rank, designated as a "Strong Buy."

And as you can see, the numbers speak for themselves, with a portfolio of Zacks #1 rank stocks generating an average annual return of 28% since 1988. Clearly, this is a system that holds up against the test of time, producing outsized results in the most rambunctious bulls and sleepiest bears.

Let's Add a Valuation Filter

But in order to find the best of the best, I decided to slap another time-tested filter onto these #1 stocks, a key valuation metric. The P/E ratio is relatively simple in nature, and it's certainly no secret on the Street, but it does have a very strong correlation with stocks that tend to produce outsized gains over the long haul.

So when you put the two together, a Zacks #1 rank stock with a P/E multiple that is well below its peers, you have a very powerful one-two combination that focuses on the sweet-spot of the market; growth and value.

On that note, let's go ahead and take a look at some Zacks #1 Rank stocks that have P/E multiples well below their peers.

4 Zacks #1 Rank Stocks With Value

Ford Motor Co. (NYSE: [ F ]) has been on quite a roll lately, rebounding from less than $1 in march of 2009 to a recent high at $14.57. As you might guess, estimates have been advancing in tandem, with the current year up a sizeable 33 cents in the last three months to $1.33. The next-year estimate looks good too, pegged at $1.59, a bullish 19% growth projection. Finally, with a forward P/E of just 8X, this stock trades at a deep discount to its peers average of 26X.

Frontline Ltd. (NYSE: [ FRO ]) is a shipping company that has also seen some big gains over the last year. As a Zacks #1 rank stock, estimates have been very bullish here too, with the current year up $1.01 in the last three months to $3.11. The next-year estimate of $3.39 is up 72 cents in the same time, a solid 9% growth projection. Frontline's forward P/E of 11X is well below its peers 16X.

Dominos Pizza, Inc. (NYSE: [ DPZ ]) has been a big story over the last few months as its fresh, new pizza recipe continues to grab the attention of its customers and investors alike. The estimate picture has been pretty solid, with the current year up 11 cents in the last two months to $1.23. The next-year estimate is pegged at $1.33, another 9% growth projection to go along with a compelling P/E of 10X against its peers 16.5X.

Brasil Telecom S.A. (NYSE: [ BTM ]) is the only international stock on the list, providing telecom services in Brazil. This hasn't been much of a high flyer this year as the Brazilian stock market has pulled back on higher interest rates, but that has only made the valuation picture sweeter, as estimates have continued to rise. With a forward P/E of 5X, this stock trades at a steep discount to its peers avrage of 13X.

Get the full analysis of all these 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 analyst 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.

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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! Register for your free subscription to Profit from the Pros at [ http://at.zacks.com/?id=4582 ].

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