Zacks Bull and Bear of the Day Highlights: Oracle, Hudson City Bancorp, Caterpillar, Bucyrus International and Joy Global

CHICAGO, Jan. 7, 2011 /PRNewswire/ -- Zacks Equity Research highlights: Oracle Corp (Nasdaq: ORCL) as the Bull of the Day and Hudson City Bancorp (Nasdaq: HCBK) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Caterpillar Inc. (NYSE: CAT), Bucyrus International Inc. (Nasdaq: BUCY) and Joy Global Inc. (Nasdaq: JOYG).

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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:

Oracle Corp's (Nasdaq: ORCL) second quarter 2011 results outpaced Zacks Consensus Estimates, owing to strength in new software license sales. The company's robust third quarter 2011 outlook led to a substantial rise in earnings estimates for the third quarter, fiscal 2011 and fiscal 2012 that are up by 6.8%, 5.3% and 5.2%, respectively.

Oracle's acquisition of Sun Microsystems will provide an impetus for growth in fiscal 2011 and beyond with higher top and bottom-line growth along with increased accretive synergies strengthening its competitive position. However, integration issues, intense competition and slow growth in IT spending are areas of concern.

We are positive on Oracle's longer-term growth prospects, given its growing market share, focus on improving profitability, new product pipeline, cost saving initiatives and robust free cash flow. We therefore upgrade the stock to Outperform and raise our price target to $37.00 on our incrementally positive outlook on the stock.

Bear of the Day:

Hudson City Bancorp's (Nasdaq: HCBK) third-quarter earnings came a penny behind the Zacks Consensus Estimate, reflecting lower interest margin, increased noninterest expense and a higher provision for loan losses.

We expect pressure on earning assets and margin to continue with the low interest rate environment, which is anticipated to persist in the upcoming quarters, thereby dampening investors appetite for this stock. Along with this, the elevated levels of credit costs remain a concern for the company.

Continuing high levels of unemployment and deterioration of home prices still prevalent in some of its lending markets arouses our concern. Moreover, the recent regulatory moves are also expected to pull down the company's bottom line. As such, we reiterate our Underperform recommendation on the stock.

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CAT Suspends Mining Shovel Plan

Caterpillar Inc. (NYSE: CAT) has decided to shelve its earlier announced plan of producing a full range of mining shovels at its Aurora, Illinois facility. The decision is a an outcome of Caterpillar's pending purchase of Bucyrus International Inc. (Nasdaq: BUCY), a South Milwaukee-based manufacturer of mining equipment and mining shovels, in a transaction worth $8.6 billion.

The increasing demand for mining trucks has spurred the corresponding demand for loading tools such as mining shovels. Caterpillar, with the intent to position itself as the leading manufacturer of products and solutions for the global mining industry, had announced in June 2010 that it will produce a full range of mining shovels, ranging from a 125-ton model to an 800-ton model, at its Aurora, Illinois facility. The company had then provided early 2011 as the time frame for the facility to start production of the new 125-ton class shovel.

In November, 2010, Caterpillar announced that it will buy Bucyrus, touted to be the biggest deal ever in the company's history. The deal capitalizes on the rising demand for coal and minerals triggered by growth in the emerging nations.

In order to conserve resources and eliminate business risks associated with internal development, Caterpillar will suspend the Illinois mining shovel plan. Caterpillar intends to evaluate the Bucyrus shovel program in order to assess the proper allocation of its resources for additional or different products.

The mining shovel line at the Aurora plant would have created about 200 assembly worker jobs and 100 support and management jobs. This might have offset some of the job losses when Caterpillar shifts its excavator line to Texas in 2013. Aurora has been exclusively producing excavators since 1972.

The Aurora factory will continue to focus on the production of wheel loaders and excavators for the time being. The company, however, added that if the Bucyrus deal falls through, it would remobilize the shovel program and resume its development at the Aurora plant as originally planned.

The Bucyrus acquisition will position Caterpillar as the leading global mining original equipment manufacturer and the combined product portfolio will dwarf Joy Global Inc. (Nasdaq: JOYG), the only U.S based manufacturer of surface and underground mining equipment. We believe Caterpillar's strong brand name, pricing power and global dealer network place it in an advantageous position to exploit the growing need for infrastructure development worldwide.

Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.

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