Zacks Equity Research highlights EnCana Corporation (NYSE: ECA) as the Bull of the Day and UST Inc. (NYSE: UST) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Investors Real Estate Trust (Nasdaq: IRET), Sepracor, Inc. (Nasdaq: SEPR) and Moody’s Corporation (NYSE: MCO).
Full analysis of all these stocks is available at http://at.zacks.com/?id=2676.
Here is a synopsis of all five stocks:
Bull of the Day: EnCana Corporation (NYSE: ECA)
EnCana Corp., based in Calgary, Alberta, is a major oil and gas exploration and production (E&P) company. EnCana is the largest independent natural gas producer of North America, with volumes of 3.57 billion cubic feet per day (Bcf/d) in 2007.
EnCana remains better positioned to navigate the current market turbulence than many of its peers. The company remains focused on capital discipline and free cash flows. With about two-thirds of its volumes next year hedged at very attractive price points, the company is expected to generate around $1.5 billion in free cash flows.
The company's strong portfolio of resource plays provides for cost-effective and sustainable volume growth and reserve additions. EnCana's plan to split itself into two separate entities, while delayed at present, is expected to unlock shareholder value.
Bear of the Day: UST Inc. (NYSE: UST)
UST Inc. is the leading producer of moist smokeless tobacco products and dominates the premium sector of the domestic market. However, over the last 15 years, UST has been steadily losing market share to discounters in the sub-premium categories.
With the announced acquisition by Altria Group of UST Inc. for $69.50 per share in cash, the potential price appreciation for UST stockholders is now limited.
Hence, the rating is a Sell. The acquisition is expected to close by the first week of January 2009.
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Investors Real Estate Trust (Nasdaq: IRET)
Investors Real Estate Trust has been the best performing REIT in our coverage universe in 2008. The company has manageable near-term debt maturities, a stable dividend, and relatively conservative investment strategy.
As such, in the midst of a REIT meltdown, shares of IRET have actually increased in 2008. Although, the company is not immune to macroeconomic problems; operations in the company's commercial portfolio will get worse over the next few quarters. The company will have a more difficult time leasing commercial space, and we expect rental rate growth and occupancy to suffer.
Sepracor, Inc. (Nasdaq: SEPR)
Sepracor engages in the discovery, development, and commercialization of products primarily for the treatment of respiratory and central nervous system disorders.
Lunesta sales remain weak, post growth negative 4% in the third quarter. We see little that can be done to re-accelerate trends in the U.S. Thankfully, we are pleased to see management looking to move beyond Lunesta and expanding its respiratory franchise with the recent additions or two new products and several technology licensing deals.
Moody’s Corporation (NYSE: MCO)
Moody's has a solid franchise in the rating of debt instruments and has diversified with credit research and international growth.
Moody's third quarter results were affected as revenues from assessing bond issuances declined more than 40% due to the freezing up of the credit markets. Moody's slashed its 2008 profit and revenue forecasts amid difficult credit market conditions.
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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