The Zacks Analyst Blog Highlights: Advanced Micro Devices, Intel, NVIDIA, Equity One and Regency Centers

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Oct 23, 2012, 09:30 ET

CHICAGO, Oct. 23, 2012 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Advanced Micro Devices Inc. (NYSE:AMD), Intel Corp. (Nasdaq:INTC), NVIDIA Corp. (Nasdaq:NVDA), Equity One Inc. (NYSE:EQY) and Regency Centers Corporation (NYSE:REG).

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Here are highlights from Monday's Analyst Blog:

AMD to Trim Workforce by 15%

Advanced Micro Devices Inc. (NYSE:AMD) plans to eliminate 15% of its workforce or about 1,800 jobs in order to reduce operational costs. This layoff is an attempt by AMD to optimize its cost structure and thereby improve its competitiveness.

The workforce reduction is expected to be over by the end of the year 2012. Along with other unspecified operational changes, the layoffs are expected to reduce the cost base by 25% and generate total annualized cost savings of around $190 million in 2013. The new structure will enable the company to break even in the third quarter of 2013 at a quarterly revenue level of $1.3 billion.

Management is looking to reinvest some of the savings into newer business areas, such as tablet-style computers in emerging markets, site consolidations and Internet-related opportunities (mainly cloud computing).

Advanced Micro has been suffering from the slowdown in the global PC market along with the delay in launching new chips due to manufacturing hiccups this year. We believe that the weak computer market and the company's failure to penetrate the new mobile device market have forced it to refine its cost structure.

The announcement came as part of AMD's third-quarter 2012 earnings release. The company reported a very poor quarter, with a significant net loss that was the combined effect of weak demand, inventory write-down and productivity issues. The company's third-quarter sales of $1.27 billion was down 10.2% sequentially and also below the consensus estimate of $1.28 billion.

Worldwide PC sales have been stagnant, while smartphones, tablets, and other mobile devices experienced strong growth. In order to stay ahead of its rivals like Intel Corp. (Nasdaq:INTC) and NVIDIA Corp. (Nasdaq:NVDA), we believe Advanced Micro needs to enter emerging markets.

Advanced Micro shares currently carry a Zacks #5 Rank, implying a Strong Sell rating in the short term (1–3 months).

Equity One Buys Assets

Equity One Inc. (NYSE:EQY), a real estate investment trust (REIT) that owns, manages, and develops neighborhood and community shopping centers in the U.S., has recently acquired three properties in the New York Metropolitan Region and one in Bethesda, Maryland. The properties were acquired for an aggregate investment of $260 million.

The acquisitions are in sync with the long-term objectives of the company to own retail properties in urban markets with visible growth opportunities through contractual rent increases, below market rents and redevelopment options.

Equity One acquired Clocktower Plaza – a 78,820 square foot shopping center in Queens, New York, for $56 million. The 100% leased property was anchored by a leading grocery store in the region.

In addition, the company purchased Darinor Plaza, a 152,025 square foot shopping center in Norwalk, Connecticut for $36 million; and 1225 Second Avenue, an 18,474 square foot retail condominium in New York City for $27.5 million. With the acquisition, Darinor Plaza would be the seventh shopping center owned by Equity One in the state of Connecticut. On the other hand, 1225 Second Avenue along with Clocktower Plaza would mark the sixth acquisition by the company in New York City.

At the same time, Equity One decided to acquire Westwood Complex, a 22-acre property in Bethesda, Maryland for approximately $140 million. The property offers significant opportunities for redevelopment and expansion with 214,767 square feet of retail space, a 211,020 square foot apartment building, and a 62-unit assisted living healthcare facility. The property is strategically situated in a dense, highly affluent market with 142,000 people living within a 3-mile range and with an average household income of $163,000.

As of June 30, 2012, Equity One owned 165 properties spanning 16.8 million square feet of space. These included 142 shopping centers, 11 development/redevelopment properties, seven land parcels, and five non-retail properties.

The majority of the shopping centers owned by Equity One are anchored by leading supermarkets, pharmacies and large retail stores. The company has a diverse tenant mix – a hedge against tenant concentration risk, thereby ensuring a steady source of income.

In addition, the bulk of the company's portfolio is located in some of the most densely populated and highest growth areas of the country with high barriers to entry. These include the metropolitan areas around Miami, Fort Lauderdale, West Palm Beach, Jacksonville, Orlando, Atlanta, Georgia, Boston and New York. Consequently, the shopping centers generate relatively strong sales with solid trade area demographics.

We have a Neutral rating on Equity One. We also have a Neutral recommendation for Regency Centers Corporation (NYSE:REG), one of the competitors of Equity One.

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