Zacks Equity Research highlights Kenexa Corporation (Nasdaq: KNXA) as the Bull of the Day and Affordable Residential (NYSE: ARC) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on China Life (NYSE: LFC) and Avon Products (NYSE: AVP). Full analysis of all four stocks is available at http://at.zacks.com/?id=2676.
Here is a synopsis of all four stocks:
Bull of the Day:
Our Bull of the Day recommendation is for Kenexa Corporation (Nasdaq: KNXA), a well-positioned in the growing talent acquisition and employee performance management market. The acquisition of Webhire and Knowledge Workers are paying off with increased customer signings in the Healthcare and Government verticals. Moreover, the November acquisition of BrassRing has already helped the company sign deals with global enterprises that would have otherwise been out of its reach. We therefore maintain our Buy recommendation on the stock, and raise our six-month target price to $45.00.
Bear of the Day:
Our Bear of the Day recommendation is for Affordable Residential (NYSE: ARC). 4th quarter results slightly improved as ARC has cut expenses and sold underperforming assets over the past year. The company is slightly cash flow positive, although on a P/E and P/FFO basis, ARC is valued well above better positioned peers. Portfolio occupancy continues to drop, as it appears that ARC’s cost-cutting efforts have negatively affected resident retention. Historically low interest rates over the past couple of years have cut into the company s core customer, who can more readily afford traditional housing. Although, the sub-prime fallout could help ARC and the entire manufactured housing industry in the next year.
It is clear that China Life (NYSE: LFC) is the market leader in China's life insurance industry, where opportunities are significant. China Life's market share of the life insurance industry in China was 45.3% in 2006, compared to 44.1% in 2005, according to the China Insurance Regulation Committee (CIRC). Among China's 31 provinces, autonomous regions, and municipalities nationwide, China Life is the market leader in 30 of them.
Avon Products (NYSE: AVP) is benefiting from both the expansion into the developing and emerging markets and the emphasis on Beauty product portfolio. Management aims to achieve high single-digit local currency revenue growth supported by margin expansion over the long term. Management has instilled financial discipline throughout the company. Over $200 million in costs savings have been achieved since 2002 by implementing the multi-year supply chain cost reduction program. Management expects to achieve cost savings an additional $300 million in savings as the company implements ERP [enterprise resource planning] in Europe and North America. During the third quarter of 2006, the company implemented two new restructuring initiatives, Product Line Simplification and a Strategic Sourcing initiative that will strengthen the company's brand competitiveness and aid in driving down the costs.
Get the full analysis of all four 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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