Zacks Bull and Bear of the Day Highlights: Humana, Gentiva Health Services, ConAgra Foods, HJ Heinz and Kraft Foods

Sep 21, 2011, 09:30 ET from Zacks Investment Research, Inc.

CHICAGO, Sept. 21, 2011 /PRNewswire/ -- Zacks Equity Research highlights Humana, Inc. (NYSE: HUM) as the Bull of the Day and Gentiva Health Services (Nasdaq: GTIV) as the Bear of the Day. In addition, Zacks Equity Research provides analysis ConAgra Foods Inc. (NYSE: CAG), HJ Heinz Co. (NYSE: HNZ) and Kraft Foods Inc. (NYSE: KFT).

(Logo: http://photos.prnewswire.com/prnh/20101027/ZIRLOGO)

Full analysis of all these stocks is available at http://at.zacks.com/?id=2678.

Here is a synopsis of all five stocks:

Bull of the Day:

Humana, Inc.'s (NYSE: HUM) second-quarter earnings modestly beat the Zacks Consensus Estimate, owing to improved consolidated premiums and ASO fees that also drove the benefit ratio along with improvement in medical and specialty memberships. Humana benefits from the new rule in health care reform, which led to an efficient deployment of capital.

The upcoming AMS acquisition is further expected to enhance the company's Medicare coverage. Overall, we expect an upside to Humana shares on the basis of higher membership, surplus cash flows generation, favorable prior-period claims development, and higher projected segment earnings.

Our six-month target price of $89.00 equates to 11.6x our earnings estimate for 2011. Combined with the $1.00 per share annual dividend, this target price implies an expected total return of 20.7% over that period. This is consistent with our Outperform recommendation on the shares.

Bear of the Day:

We have downgraded our recommendation on Gentiva Health Services (Nasdaq: GTIV) to Underperform, prompted by poor operating performance coupled with weakening financial position. The company's second-quarter earnings lagged the Zacks Consensus Estimate, on the back of high interest payments as well as increased expenses, resulting in a deteriorated cash position.

However, the strong growth in Hospice segment, driven by the Odyssey acquisition, led to a huge surge in revenue, which was offset by the rising costs. The company needs to engage in effective cost control, while continuing its current acquisition strategy.

Overall, the future outlook for Gentiva does not look very promising. Our six-month target price of $6.25 equates to 3.0x our earnings estimate for 2011. This price target implies an expected total negative return of 8.4% over that period.

Latest Posts on the Zacks Analyst Blog:

ConAgra Misses but Reaffirms

ConAgra Foods Inc. (NYSE: CAG) has reported first quarter of fiscal 2012 results, with diluted EPS (from continuing operations) of $0.20 compared with $0.32 in the year-ago quarter.

This decline of 38% reflects negative impact of short-term changes in the wheat market affecting the company's Commercial Foods segment and the inflationary pressures in the Consumer Foods segment. The results missed the Zacks Consensus Estimate of $0.31 per share.

Guidance

ConAgra reaffirms expectation of fiscal 2012 full-year diluted EPS to grow at a low- to mid-single-digit rate, based on high inflation and increased marketing investments, over the comparable EPS of $1.75 during fiscal 2011. The company revised its full-year inflation expectations to 9-10% for the Consumer Foods segment from original estimate of 7-8%.

ConAgra Foods Inc. is one of North America's leading food makers operating in the Consumer Foods and Commercial Foods segments. The company, over time, has given tough competition to its peers such as HJ Heinz Co. (NYSE: HNZ) and Kraft Foods Inc. (NYSE: KFT), based on its cost-control measures on the backdrop of rising raw material prices as well as its product-line expansion program in a highly-competitive food industry.

We maintain a Neutral recommendation on the stock backed by a Zacks #4 Rank, which translates into a short-term Sell rating.

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 analyst 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=7158.

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD from MIT 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 at http://at.zacks.com/?id=4582.

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Follow us on Twitter:  http://twitter.com/zacksresearch

Join us on Facebook:  http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

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.

Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
support@zacks.com
http://www.zacks.com

SOURCE Zacks Investment Research, Inc.



RELATED LINKS

http://www.zacks.com