Zacks Bull and Bear of the Day Highlights: Public Storage, Pharmion Corp., 3Com and Avon Products

Zacks Equity Research highlights Public Storage (NYSE: PSA) as the Bull of the Day and Pharmion Corp. (Nasdaq: PHRM) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on 3Com Corporation (Nasdaq: COMS) 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 Public Storage (NYSE: PSA). Shares of PSA have traded down about 17% since mid-April. We attribute this to a correction in the sector as investors are taking profits after multi-year gains. We think the sell-off has been overblown and PSA is still operating in an excellent environment for self-storage. The company continues to have strong earnings momentum, and as the economy strengthens, the company should see even greater returns. With the acquisition of Shurgard, PSA removed a major competitor, and is by far the largest self storage operator in the U.S. We are also encouraged by a slowdown in new supply coming on line in major markets.

Bear of the Day:

Our Bear of the Day recommendation is for Pharmion Corp. (Nasdaq: PHRM), a global pharmaceutical company focused on acquiring, developing and commercializing products for treating hematology and oncology patients. The company has two main growth drivers, Thalidomide and Vidaza. Yet sales of both are stalling in the face of fierce competition. Visibility remains low, in our opinion. The company has taken a few steps to improve the pipeline, but none of them will kick in until the end of 2007. Without acceleration in Vidaza prescriptions, the shares price will remain under pressure. Therefore, we maintain a Sell rating on Pharmion shares with a target price of $23.

Analyst Blog:

Though 3Com Corporation (Nasdaq: COMS) has posted growth in its core networking business as well as in security products acquired from TippingPoint, we are cautious on the outlook of the company given the recent purchase of the H-3C joint venture. Following the transaction, 3Com's net cash position has fallen to $0.56 per share from $2.42 per share, which earlier supported the stock's valuation. Moreover, 3Com will likely compete head-to-head with Huawei after the non-compete agreement expires in 2008. We, therefore, reiterate our Sell recommendation on the shares of COMS with a target price of $3.50.

Avon Products (NYSE: AVP) stock has traded in a P/E range of 14 to 31 over the last five years. Avon is an above-average growth company among its peers, but there are inherent risks associated with the direct sales business model and the dependence on developing markets for growth. With China's outlook having improved, we find the stock attractive. The target price of $44.00 is derived from applying a 28 P/E on the depressed 2007 earnings estimate.

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.

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.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today by visiting http://at.zacks.com/?id=2677.

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros by going to http://at.zacks.com/?id=2650.

Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.

(a)The Zacks Performance Rank performance is the total return of equal weighted simulated portfolios consisting of those stocks with the indicated Zacks Rank net of fees. Results reflect the reinvestment of dividends and other earnings. Simulated results do not represent actual trading and may not reflect the impact that economic and market factors might have had on decision-making if an adviser were actually managing a client's money.

(b)The S&P 500 Index ("S&P 500") is a well-known, unmanaged index of the prices of 500 large-company common stocks selected by Standard & Poor's. The S&P 500 includes the reinvestment of all dividends, no transaction costs, and represents the gross returns before management fees.

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.