CHICAGO, Aug. 17, 2011 /PRNewswire/ -- Zacks Equity
Research highlights Sunoco Logistics Partners, LP (NYSE:
SXL) as the Bull of the Day and Computer Sciences Corp.
(NYSE: CSC) as the Bear of the Day. In addition, Zacks Equity
Research provides analysis Interpublic Group of Companies,
Inc. (NYSE: IPG), Omnicom Group Inc. (NYSE: OMC) and
WPP plc (Nasdaq: WPPGY).
(Logo:
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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:
Buoyed by a robust operating performance and favorable growth
prospects, we are upgrading Sunoco Logistics Partners, LP
(NYSE: SXL) to Outperform from Neutral. Recent results for Sunoco
Logistics have been driven by strength in its crude pipeline system
and terminals facilities.
Importantly, the partnership has grown its cash distribution for
twenty-five consecutive quarters. With its stable fee-based
revenue, geographically-diverse assets and strong business
fundamentals, Sunoco Logistics offers investors an opportunity to
capture income growth through steadily-rising cash distributions
and capital appreciation.
Therefore, we are confident of the partnership's total return
potential. Its current quarterly distribution of $1.215 per unit ($4.86 per unit annualized) is up from
$0.45 per unit ($1.80 per unit annualized) at the time of its
2002 IPO.
Bear of the Day:
Computer Sciences Corp. (NYSE: CSC) is one of the leading
players in the information technology (IT) services industry. We
are apprehensive about the intense competition in the IT and cloud
computing space from both small and big players such as Accenture
and Hewlett-Packard.
Moreover, with government orders expected to dry up to a certain
extent and the National Health Services realization getting pushed
to future quarters, things look difficult for the company.
Moreover, the demand for the company's products in Europe is not encouraging for the upcoming
quarters.
While we are positive on the company we are a bit concerned
about the competition it faces from larger players and its high
outstanding debt. We maintain an Underperform rating on CSC and set
a price target of $27.00,
representing a P/E of 5.9x our 2012 EPS estimate.
Latest Posts on the Zacks Analyst Blog:
Interpublic Sells Half of Facebook Stake
Advertisement giant Interpublic Group of Companies, Inc.
(NYSE: IPG), which bought approximately 0.5% stake in Facebook (FB)
way back in 2006, has reached an agreement to sell approximately
half of its investment for $133
million to an undisclosed buyer.
The interest, amounting to about 0.5% of Facebook's total
shares, was bought for less than $5
million in 2006, which Facebook agreed to sell to
Interpublic in exchange for the company's agreement to spend
$10 million with Facebook for the
clients of its agencies.
Since then, the strategic value of Interpublic's initial
investment in the social network has moderated, while the financial
value of the stake appreciated significantly over time. This has
brought a fair prospect for Interpublic to divest a portion of
their position for net cash proceeds of $133
million in a private negotiation. Interpublic group expects
a pre-tax gain of $132 million, upon
closing of the sale.
The money will be utilized toward Interpublic's existing program
of repurchasing shares of its common stock. The board has
authorized an increase in the share repurchase program by
$150 million, a rise of $450 million from its initial $300 million; creating opportunity to further
enhance shareholder value, reflecting long-term prospects.
Interpublic acquired the stake in 2006 in an effort to signal
the current and potential clients, the company's presence in the
field of social marketing as well as its attempt in identifying
strategic partnerships while realizing financial gain.
Facebook, which was then valued in the range of $200 million to $300 million, has increased more
than fivefold in less than two years, with a value of $66.5 billion in a recent share sale, ahead of
its expected initial public offering next year.
On this backdrop, Interpublic's divestment of half of its stake
is being seen as an indication that the secondary market for the
social network's shares may be at an all time high level.
New Yorkbased, Interpublic Group of Companies Inc. together with
its subsidiaries, provides advertising and marketing services
worldwide. The company directly competes with its peers, such
as Omnicom Group Inc. (NYSE: OMC), Publicis Groupe SA and
WPP plc (Nasdaq: WPPGY).
We currently maintain a long-term Neutral recommendation on the
stock. Interpublic Group has a Zacks #4 Rank, which translates into
a short-term Sell rating (1-3 months).
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)
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