CHICAGO, Aug. 25, 2011 /PRNewswire/ -- Zacks Equity
Research highlights Silicom Ltd. (NYSE: SILC) as the Bull of
the Day and GOL Linhas Aereas (NYSE: GOL) as the Bear of the
Day. In addition, Zacks Equity Research provides analysis
Motorola Solutions Inc. (NYSE: MSI), Nokia Corp.
(NYSE: NOK) and Siemens AG (NYSE: SI).
(Logo: http://photos.prnewswire.com/prnh/20101027/ZIRLOGO)
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:
Silicom Ltd. (Nasdaq: SILC) engages in the design,
manufacture, marketing, and support of connectivity solutions for a
range of servers and server-based systems. The firm has several
growth engines including Information Technology's return to growth,
the march to 10GB per second technology, a large and growing base
of OEM customers includes most of the market-leading players,
staged launch of new products, and a strong OEM business model
which limits operating expenses.
SETAC, the firm's new Server to Appliance Converter, which
combines the best of standard servers with hardware appliances,
should allow the firm to push its revenues to the 100 million run
rate level in coming years. We see value in the shares of
Silicom.
We believe Silicom should be valued by its cash plus business
operations. With the cash and liquid assets of $6.79 per share plus the company's business
operations value based on 14.8x our 2011 estimate gives us a
$25.00 company value.
Bear of the Day:
We downgrade our recommendation on GOL Linhas Aereas
(NYSE: GOL) from Neutral to Underperform based on the competitive
Brazilian aviation market, wherein the airport infrastructural
crisis is leading to lower efficiency and higher operational cost
for the airline companies, including GOL. Moreover, the risk of a
dwindling customer demand across GOL's operating route network
along with its dependence on a few clients may put pressure on the
stock.
The company reported a loss per share of R$1.33 (US$0.84 per
ADS) in the quarter compared with the Zacks Consensus Estimate of a
loss of US$0.15 per ADS. The recent
rise in fuel prices and appreciation of the Real against the U.S.
dollar due to currency fluctuation may also impact its
profitability going forward.
Over the last five years, GOL Linhas ADS's have traded in the
range of 5.7x to 91.9x trailing 12-month earnings. Our $6.25 target price is based on 15.2x 2011 EPS.
The stock currently carried a Zacks #5 Rank, indicating a Strong
Sell rating.
Latest Posts on the Zacks Analyst Blog:
Motorola Solutions Downsizing
Motorola Solutions Inc. (NYSE: MSI) is further downsizing
its wireless broadband infrastructure solutions businesses.
Yesterday, the company announced that it has reached an agreement
with private equity firm Vector Capital to sale its Point-to-Point
(Orthogon) and Point-to-Multipoint (Canopy) wireless infrastructure
assets. The financial terms of this deal is undisclosed. However,
the divestment is expected to be closed by the end of September 2011, subject to customary regulatory
approval.
Earlier in April 2011, Motorola
Solutions was able to sell most of its wireless broadband
infrastructure assets to Nokia Siemens Networks for $975 million after fighting a prolonged legal
battle with Huawei Technologies in China regarding intellectual property rights.
Nokia Siemens Networks is a 50-50 joint venture between Nokia
Corp. (NYSE: NOK) and Siemens AG (NYSE: SI). However,
Motorola solutions kept its iDEN business and other selected assets
and almost all the patents related to the wireless network
infrastructure business.
We believe further disinvestment of wireless broadband assets is
a move on the part of Motorola Solutions to concentrate more on its
core public safety businesses. Motorola Solutions is the largest
developer of the public safety products commanding nearly half of
the total market in the U.S. The company is also the largest
manufacturer of barcode readers and small rugged mobile computers.
Motorola Solutions' business strategy to focus only on stable
government enterprises will help the company to continue its solid
performance in the near future.
Vector will operate these businesses as a single standalone
company called Cambium Networks. Motorola Solutions will now
purchase broadband products from Cambium, which will be required to
install its major public safety networks. Undoubtedly, at present,
the most significant catalyst for Motorola Solutions is the
proposed installation of 4G LTE networks for public safety. The
U.S. government's approval to prioritize the 700 MHz D-Block
spectrum for public safety purposes will enhance this business.
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.
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