For Immediate Release
Chicago, IL - December 12, 2011 - Zacks Equity Research
highlights
PS Business Parks
(
PSB
) as the Bull of the Day and
Linear Technology
(
LLTC
) as the Bear of the Day. In addition, Zacks Equity Research
provides analysis on
Timken Co.
(
TKR
),
Caterpillar Inc.
(
CAT
) and
Wal-Mart Stores Inc.
(
WMT
).
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
:
PS Business Parks
(
PSB
) reported strong third quarter 2011 results with healthy
year-over-year increase in revenue and earnings. PS Business Parks
owns and operates commercial real estate properties in diversified
markets, which can be easily configured to suit a variety of uses
to minimize downside risk and generate a steady source of
revenue.
The company also has a strong balance sheet with adequate
liquidity and minimal debt maturities. Over the last five years, PS
Business Parks shares have traded in a range of 6.3X to 20.5X
trailing 12-month FFO. The stock is also trading at a discount to
the peer group, based on forward FFO estimates.
Our long-term Outperform recommendation on the stock indicates
that it would perform well above the broader market. Our target
price of $66.00, 14.1X 2011 FFO/share, factors in this view.
Bear of the Day
:
Linear Technology
(
LLTC
) is a leading OEM of analog and mixed signal semiconductors.
September quarter results missed the Zacks Consensus, as weak
demand, unfavorable mix and a higher tax rate impacted results.
Extreme caution regarding customers also led to a weak
guidance.
Therefore, despite the strong business model, excellent products
and ability to generate strong operating cash flows, we advise
investors to avoid the shares, since we believe there is
uncertainty in near-term demand. The high debt burden also
increases risks.
We think the loss of the iPad business will continue to tell on
sentiments. We are therefore reiterating our Underperform
recommendation on the shares, as indicated by our $26 target price
(14.9X P/E).
Latest Posts on the Zacks
Analyst Blog
:
The Taming of Inflation in China
China's National Bureau of Statistics recently stated that the
country's inflation rate has fallen from a 3-year high of 6.5% last
July to 4.2% year-over-year in November, which represents its
slowest rate of growth in over a year. Producer prices inched up
just 2.7% year on year, the lowest in nearly 2 years. Food
inflation, a politically sensitive topic, moderated on a sequential
basis to 8.8% in November from 11.9% in October.
Clearly, the Chinese economy is cooling down as the outlook of
its major trading partners remains grim. Curbs on real estate
speculation, stringent bank lending and a slowdown in exports have
deflated the hyper-growth that China historically enjoyed. The
victory over inflation could not have come at a better time as
there are clear indications of a slowdown.
The economy grew at only 9.1% year over year during the June to
September period, which represents the slowest growth rate in the
past couple of years. Then, in November, the Purchasing Managers'
Index ("PMI", a gauge for manufacturing sentiment) touched 49, its
nadir since 2009. In fact, it was the first time in nearly three
years that this measure breached the critical 50 level downward.
Latest statistics indicate that exports to the EU slipped 9% year
over year while U.S.-bound exports dropped 5%, last October.
Just earlier this month, the government provided a clear signal
of a shift to a more accommodating monetary policy when it cut the
cash reserve ratio to infuse liquidity. We believe that having
curbed inflation, the authorities will now be in a position to
further ease monetary policy and proactively pursue growth. The
challenge before policy-setters is to boost domestic demand and
free up credit controls without unleashing inflation again.
Despite enjoying high growth, China has at times been a
difficult proposition for Western business interests. Two U.S.
construction or engineering companies who have done booming
business in building China are
Timken Co.
(
TKR
) and
Caterpillar Inc.
(
CAT
). On the retail side,
Wal-Mart Stores Inc.
(
WMT
) is a formidable competitor in China where foreign retailers have
often complained about the lack of level playing field.
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
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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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CATERPILLAR INC (
CAT
): Free Stock Analysis Report
LINEAR TEC CORP (
LLTC
): Free Stock Analysis Report
PS BUSINESS PKS (
PSB
): Free Stock Analysis Report
TIMKEN CO (
TKR
): Free Stock Analysis Report
WAL-MART STORES (
WMT
): Free Stock Analysis Report
Zacks Investment
Research