Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Hilltop Holdings Inc. (NYSE: HTH), Cabot Oil & Gas Corp. (NYSE: COG), Eastman Chemical Co. (NYSE: EMN), Microsemi Corp. (Nasdaq: MSCC) and BT Group Plc. (NYSE: BT).
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Here are highlights from Monday’s Analyst Blog:
Hilltop Holdings Sees Incline
Hilltop Holdings Inc. (NYSE: HTH), formerly known as Affordable Residential Communities (ARC), operates as a property and casualty insurance company providing fire and homeowners insurance through its subsidiary, NLASCO for low-value dwellings and manufactured homes.
ARC was engaged in manufactured housing and related activities, but sold off all its businesses except NLASCO in July 2007. The company incurred a net loss of $0.17 per share in 1Q08, primarily due to investment losses. We will look for further color on the outlook for this company as it invests the proceeds from the sale of earlier business in further acquisitions and expands its operations. We reiterate our Hold rating on the shares.
Positives Priced Into Cabot Oil
Cabot Oil & Gas Corporation (NYSE: COG) has made a $600 million acquisition of producing East Texas properties in the vicinity of its existing operations. The transaction increases the company’s exposure to the highly prospective Haynesville Shale play, and is in line with the management’s asset repositioning program that has transformed Cabot into a relatively low risk onshore player with longer-lived reserves.
We, however, maintain our Hold recommendation as we continue to believe that the stock’s premium valuation relative to peer group already reflects these positives. We see better opportunities in the exploration and production (E&P) space.
Upping Eastman Chemical Target
Eastman Chemical Co. (NYSE: EMN) has a strong fibers business and solid financials. The company had an impressive first quarter, marked by increasing prices, volume gains and strength in several end markets. The company is likely to benefit from its recent focus on the industrial gasification business. Thus, we rates EMN shares a Buy. Accordingly, we have set a new price target of $80.00.
Eastman is benefiting from an improved product mix. The company is seeing strong demand in several end-markets including PCI, Specialty Plastics, and Fibers. Eastman is hiking prices of major products, a policy which is likely to offset higher operating costs and help earnings.
Cautious on High-Growth MSCC
Microsemi Corporation (Nasdaq: MSCC) is an OEM of semiconductor analog and mixed signal ICs, with substantial presence in the high reliability space. The company is strongly positioned in high-growth markets such as commercial aerospace, implantable medical devices (expected to grow 15-20% annually over the next four years) and LCD TVs.
March quarter results were in line with consensus estimates, both on the top and bottom lines. Bookings outpaced revenue for the twenty-second consecutive quarter. With strength in its served end markets and restructuring benefits kicking in, we expect both revenue and margins to improve in 2008.
Staying Lukewarm on BT Group
BT Group Plc (NYSE: BT) reported 4Q08 with revenues and earnings, helped by a lower effective tax rate, in line. The company is moving ahead with the expansion of its 21CN network. The company rolled out its wholesale broadband services on 21CN network recently.
BT Global continues to execute well, winning deals valued at £8.0 billion in the trailing-twelve- month period. The cost-cutting measures, capital expenditures in new wave initiatives, the progress of launch of BT Vision and large deal wins give us confidence that the company is moving in the right direction. The company has been able to expand EBITDA margins due to its restructuring efforts, although pricing pressure is causing traditional revenues to decline.
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