Science & Technology
Science and Technology
Science and Technology
Wed, September 29, 2010
Tue, September 28, 2010
Atmel, Beckman Coulter, Prudential Financial, American International Group and MetLife
CHICAGO--([ BUSINESS WIRE ])--[ Zacks Equity Research ] highlights: Atmel Corporation (Nasdaq: [ ATML ]) as the Bull of the Day and Beckman Coulter (NYSE: [ BEC ]) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Prudential Financial Inc. (NYSE: [ PRU ]), American International Group Inc. (NYSE: [ AIG ]) and MetLife (NYSE: [ MET ]).
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 ]:
Atmel Corporation's (Nasdaq: [ ATML ]) top-line growth continues to accelerate, driven by solid growth in 8-bit and 32-bit micron rollers and touch-sensing products.
There are a number of positives associated with Atmel's ongoing restructuring. The program includes selling four noncore wafer fabrication operations, consolidating or eliminating fourteen product lines and reducing the workforce by nearly 35%. We expect meaningful results from these actions later this year.
Atmel has a growing microcontrollers business that should contribute to the company's top-line growth going forward. In anticipation of strong results in 2010, we raise our estimates and reiterate our Outperform rating on the stock.
[ Bear of the Day ]:
Currently, the most important issue facing Beckman Coulter (NYSE: [ BEC ]) is the warning letter related to its troponin test kits. This overhang has cut revenues in addition to impacting client additions based on which the outlook has been lowered.
Although Beckman is working with the FDA to conduct the required trial, clearance is not expected before mid-2011. Additional factors affecting the company are lower demand for life science products and delay in cellular product launch.
Given these inhibiting factors, we prefer to avoid this stock until issues are resolved. Accordingly, we initiate coverage on Beckman with an Underperform rating.
Latest Posts on the Zacks [ Analyst Blog ]:
Prudential Touted to Buy AIG Units
Sources from Wall Street Journal have reported that Prudential Financial Inc. (NYSE: [ PRU ]) has resumed talks for the purchase of two of the Japanese life operations of American International Group Inc. (NYSE: [ AIG ]).
The deal value is expected to lie between $4 billion and $5 billion, based on 7xa'8x combined earnings of $600 million, after-tax, generated by the units.
Talks between Prudential and AIG over the sale of its operations -- AIG Star Life Insurance Co. and AIG Edison Life Insurance Co. -- had started last year but broke off after the lattera™s chief executive commented that they would retain the companies and would operate and expand them.
Potential Impact on Prudential
Japan is the largest business base of Prudential outside the U.S., contributing approximately 40% to its revenues. The company has been operating in the country for over a couple of decades and has made three acquisitions -- Orico Life Insurance and Kyoei Life Insurance Co., Ltd. in 2001 and Yamato Life Insurance Co in 2009. Japan, which has a high rate of both longevity and savings, is an attractive region for retirement products.
The purchase of AIGa™s Japanese units will consolidate the already strong footprint of Prudential in the country, providing it a significant competitive advantage in the Asian region. Moreover, with excess capital of $2.5 billion on hand, the company is uniquely poised for organic business growth and acquisition opportunities.
Also, management commented during the second quarter conference call that it expects to utilize surplus cash on long-term investments as market opportunities arise. We also expect an equity issue of 1.5-2.0 billion from Prudential which will be required to finance the rest of the transaction.
However, if the acquisition takes place, we expect Prudential to scale back its share buyback activity.
Potential Impact on AIG
The proceeds generated from the sale of its twin life insurance business in Japan will help AIG repay a part of the more than $90 billion of government bailout money still left. Since September 2008, AIG has marketed its assets to pay off government loans of $182.5 billion it had received as a lifeline.
Back in March 2010, AIG sold its American Life Insurance Co. (ALICO) to MetLife (NYSE: [ MET ]) for $15.5 billion. Also during March 2010, AIG completed the $500 million sale of a portion of its asset management business, branded PineBridge Investments, to the Asia-based Pacific Century Group.
AIG and Prudential are yet to come out in the open about the deal, and any last minute differences may once again hamper the transaction.
Prudential has been in the insurance and financial services business since 1848. The company operates throughout the U.K., U.S. and Asia, offering international health insurance and retirement planning services, supported by 27,000 employees worldwide.
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.
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