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: W.R. Berkley (NYSE: BER) and AngioDynamics (Nasdaq: ANGO).
See the latest posts to the Analyst Blog by visiting: http://at.zacks.com/?id=2673
Here are highlights from Friday’s Analyst Blog:
W.R. Berkley Premium Deserved
Results for 1Q07 were ahead of expectations. W.R. Berkley (NYSE: BER) continues to enjoy a broadening of premiums, underwriting profits, and investment income. Consequently, the company is positioned to continue generating an above 20% ROE [return on equity].
While the shares trade at a significant premium valuation to its peer group, we think this premium is warranted and reflects Berkley's substantially superior historical and projected ROE. In turn, we think the stock has the potential to outperform the group without excessive downside risk.
At current valuations, we believe there is room for market out-performance with less downside risk than the group. Our new six-month target price of $38.00 per share, down from $41.00 per share, calculated as follows: (1.9x our estimated book value of $20.00 per share as of September 30, 2007) and represents a 16.3% total return (15.7% annualized price appreciation + 0.6% dividend yield).
A Hold on AngioDynamics
AngioDynamics (Nasdaq: ANGO) preliminarily reported that fourth quarter sales are expected at $40.5-$40.8 million, at the low end of guidance, but slightly ahead of our expectations. We believe VenaCure sales, in the wake of litigation, remain weak. The company continues to appeal the verdict.
We are revising our 2008 estimates downward slightly to reflect expected continued VenaCure weakness. Our target remains at $18.00, 27x calendar 2008 EPS [earnings per share] and 2.3x calendar 2008 revenues.
We are also concerned over the lack of product line transparency that ANGO is now offering. At the current price, ANGO trades at 2.2x calendar 2008 estimated revenues of $195 million (2.5x fiscal 2008 revenues), that is in-line with comparables. On our current calendar 2008 EPS estimate of $0.66, the stock trades at a 1.3x P/E/G [price-to-earnings growth], a slight premium to the industry mean. Our target remains at $18.00, 27x calendar 2008 EPS and 2.3x calendar 2008 revenues.
See the latest posts to the Analyst Blog by visiting http://at.zacks.com/?id=2645
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Continuous 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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