Zacks Bull and Bear of the Day Highlights: NTT DoCoMo, Altria Group, United Health Care, Aetna and Humana
Friday, Jul 31,2009, 10:41:03 AM Click:
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:
We maintain our Buy recommendation and the same valuation target for NTT DoCoMo (NYSE: DCM), the largest mobile service provider in Japan, ahead of first quarter of fiscal 2010 financial results. The company currently maintains a leading 50% share of the Japanese wireless market.
DCM upgraded 98% of its total coverage area with 3G HSDPA technologies and emerging 4G LTE networks are planned for deployment through 2010. DCM's decisions to focus on mobile content along with a renewed geographic expansion drive outside Japan are positive indicators.
Furthermore, the company is launching an innovative on-line money transfer service. We consider DCM as an attractive long-term investment opportunity.
Bear of the Day:
Altria Group (NYSE: MO) is the leading domestic tobacco company, which generates significant cash flow and the stock has a high dividend yield. In an effort to expand into adjacent categories, Altria acquired UST, the world's leading moist smokeless tobacco manufacturer.
However, the company is engaged in numerous tobacco liability suits. Several large punitive damage awards have been upheld, most recently the $79.5 million judgment in the Williams case in 2009.
In addition, the 150+% federal excise tax increase should dramatically reduce cigarette volume. A Sell rating is recommended.
Latest Posts on the Zacks Analyst Blog:
"Blue-Dogging" Health Care
Probably the most important tool on the table for controlling health care costs is the public option. Essentially, it will let individuals buy into Medicare early. Medicare is a FAR more efficient system than the private health insurance system. For each dollar that is spent on Medicare, more than 98 cents goes to paying for actual medical costs.
At the major health insurance companies like United Health Care (NYSE: UNH), Aetna (NYSE: AET) and Humana (NYSE: HUM), less than 80% goes to pay for doctors and hospitals. The rest of the money goes to overhead -- principally trying to get lots of people to apply for health care coverage and then to weed out the ones that are more likely to get sick. These companies also spend a lot of money on trying to figure out if someone had an undisclosed pre-existing condition, so they can deny coverage to people who thought they were insured when they actually get sick and file a claim.
The health insurance industry is rightly afraid of the public option, because it is a much better mousetrap and will eventually lead to the industry having a much smaller, supplemental role (equivalent to the current medigap policies offered to supplement Medicare) rather than being a huge industry.
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.
About the Analyst Blog
Updated throughout every trading day, the Analyst Blog provides analysis from Zacks Equity Research about the latest news and events impacting stocks and the financial markets.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
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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Zacks.com
Mark Vickery
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Visit: www.zacks.com
Source: Zacks.com
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