For Immediate Release
Chicago, IL - May 10, 2012 -
) as the Bull of the Day and
AGL Resources, Inc.
) as the Bear of the Day. In addition, Zacks Equity Research
provides analysis on
Prudential Financial Inc.
Full analysis of all these stocks is available at
Here is a synopsis of all five stocks:
Bull of the Day
) is the parent company of U-Haul International, the world's
largest consumer truck rental company. It is also the second
largest self-storage company in North America.
The impact of the decline in housing and a decrease in apartment
occupancy rates appears to have ended. We expect continued
improvements in operating parameters. Our recommendation continues
as Outperform, with a price target of $110 a share.
Based on our estimates for the next four quarters' EBITDAL of
$40 a share, we would expect a price range of $95 to $125. The
stock has reached our low end target price and we continue to rank
the stock Outperform.
Bear of the Day
We are maintaining our Underperform recommendation on
AGL Resources, Inc.
) with a target price of $35. We expect shareholder sentiment
toward the company to remain lukewarm, considering its investment
in higher-risk unregulated operations, ongoing regulatory
uncertainties and the challenging economic environment.
AGL's earnings are likely to suffer in 2012 due to a
less-than-favorable outlook at its wholesale segment. Additionally,
the inclusion of the shipping operations (post Nicor acquisition)
has left AGL with a weak business, thereby heightening its risk
profile. Partially offsetting these negatives are the company's
large and stable customer profile, consistent dividend growth and
strong liquidity position.
Considering these factors, we see little reason for investors to
own the stock and therefore maintain our Underperform
recommendation. Our $35 price objective reflects a 2012 P/E
multiple of 12.7x.
Latest Posts on the Zacks
Morgan Stanley in New Mortgage Mess
) over the sale of mortgage-backed securities are far from over.
Recently, one of the top U.S. life insurers,
Prudential Financial Inc.
), has brought up charges against Morgan Stanley for the sale of $1
billion in residential mortgage-backed securities that the former
had bought, according to a Bloomberg report.
The company has been accused of making false statements as well
as omitting material facts prior to Prudential's purchase of the
residential mortgage-backed securities which were issued with 41
mortgage-loan securitizations between July 2004 and August
Prudential alleged that Morgan Stanley had wrongfully asserted
that underwriting standards for the mortgages were met and home
loans were lawfully assessed. However, a significant part of the
mortgage loans, which backed those securities defaulted, were
foreclosed or became delinquent.
As a result, the value of these securities plummeted and
Prudential incurred significant losses on its investments in such
securities which exceeded $350 million. Prudential is claiming for
both compensatory as well as punitive damages.
Morgan Stanley has encountered similar allegations in the recent
past. The company has faced lawsuits from companies such as Asset
Management Fund and
) which accused Morgan Stanley of fraudulent activities including
misrepresentation of facts over the sale of securities.
Asset Management Fund has sued the company over its $122.4
million purchase of residential mortgage backed securities. On the
other hand, MetLife has brought forth charges against Morgan
Stanley over its acquisition of $757 million in residential
mortgage-backed securities in 2006 and 2007.
Moreover, in April, Morgan Stanley has been asked by the Federal
Reserve to review the foreclosures made by Saxon mortgage servicer
prior to the unit's sale and subsequently reimburse the affected
The role of residential mortgage backed securities behind the
recent financial crisis and the fraudulent activities related to
the sale of such instruments have been severely criticized. In
fact, several of the Wall Street biggies are stuck with similar
allegations. Their code of conduct with respect to the sale of such
instruments has been questioned.
We believe that these lawsuits further increase the company's
litigation risk and also represent a threat to scathe the company's
financials to some extent. However, if proved or settled, the
investors can breathe some relief.
Currently, the shares of Morgan Stanley have a Zacks #3 Rank,
which translates into a short-term Hold rating. Additionally,
considering the fundamentals we maintain our long-term Neutral
recommendation on the stock.
Get the full analysis of all these stocks by going to
About the Bull and Bear of the Day
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the markets over the next 3-6 months.
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AGL RESOURCES (GAS): Free Stock Analysis Report
METLIFE INC (MET): Free Stock Analysis Report
MORGAN STANLEY (MS): Free Stock Analysis Report
PRUDENTIAL FINL (PRU): Free Stock Analysis
AMERCO INC (UHAL): Free Stock Analysis Report
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