N@N

Zacks Bull & Bear of the Day Highlights: AmBev, Canon, Bookham, Avanex and Oplink

  //house-home.news-articles.net/content/2009/01/3 .. ights-ambev-canon-bookham-avanex-and-oplink.html
  Published in House and Home on Friday, January 30th 2009 at 3:12 GMT, Last Modified on 2009-01-30 03:14:01 by Market Wire

CHICAGO--([ BUSINESS WIRE ])--Zacks Equity Research picks AmBev (NYSE: [ ABV ]) as Bull of the Day and Canon, Inc. (NYSE: CAJ) as Bear of the Day. In addition, the analysts at Zacks Equity Research discuss the latest on Bookham (Nasdaq: [ BKHM ]), Avanex (Nasdaq: [ AVNX ]) and Oplink (Nasdaq: [ OPLK ]).

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

Bull of the Day

We are maintaining our Buy recommendation on Companhia de Bebidas das Americas, otherwise known as AmBev (NYSE: [ ABV ]). The company posted positive results for the third quarter of 2008 with excellent results in Brazil and in Argentina.

InBev's desire to acquire Anheuser-Busch appears to be positive for the company (at the beginning of 2004, AmBev announced a billion dollar merger with the Belgian beer maker, Interbrew, creating InBev). Despite the difficult economic environment throughout the world due to the global [ credit ] crunch, the company, which is focusing on low-cost, daily-use products, is not tied directly to the international economic cycle.

Moreover, a more relaxed monetary policy in Brazil is very positive for the company. we consider that the current discount over the industry mean is excessive, mainly considering that Brazil, which is the company's key market, has a huge room for [ interest rate ] cuts and will be less affected by the crisis.

Bear of the Day

Based in Japan, Canon, Inc. (NYSE: CAJ) is one of the leading designers, manufacturers, and marketers of office equipment, cameras, and optical products in the world. Canon is a high-technology-oriented company with strategies to develop innovative, value-added products that incorporate advanced technologies.

We believe the sharp appreciation of the yen is eroding Canon's revenue and profits. Canon's results for fiscal 2008 were hurt by weak consumer spending and falling demand amid a global economic slowdown. The company's Q4 of 2008 results were disappointing and CAJ cut its forecast for the full year 2009.

We believe the company will struggle to meet expectations with its Q1 being extremely tough with a probable increase in losses. We therefore downgrade CAJ shares to Sell with a six-month target price of $25.00.

Recent Analysis from the Analyst Blog

Avanex & Bookham Merger: Long Time Coming

Bookham (Nasdaq: [ BKHM ]) announced its fiscal Q4 results recently. Although there was nothing encouraging in the release per se, the bigger news was the prospective combination of it and Avanex (Nasdaq: [ AVNX ]).

Note that Avanex attempted a merger with Oplink (Nasdaq: [ OPLK ]) back in 2002, which didn't go through because the Boards of the companies couldn't come to terms. This time around, the Boards of Directors of both BKHM and AVNX have agreed to a merger.

Question is: Is it going to be synergistically incremental to the merged entity in terms of potential shareholder benefits, or is it a result of dire times?

The answer probably is: Both. Undoubtedly, the combination will create a larger optical component company with higher revenues and better margins and a line of product that will have significant breadth to make it more competitive. Given that both companies have already undergone significant restructuring in the past few years and have achieved relatively leaner cost structures, the emphasis for further restructuring should be minimal.

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: [ 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! Register for your free subscription to Profit from the Pros at [ http://at.zacks.com/?id=4582 ].

Visit [ http://www.zacks.com/performance ] for information about the performance numbers displayed in this press release.

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.