The Zacks Analyst Blog Highlights: Dell, Intel, Hewlett-Packard, Advanced Micro Devices and Sara Lee

Aug 16, 2011, 09:30 ET from Zacks Investment Research, Inc.

CHICAGO, Aug. 16, 2011 /PRNewswire/ -- 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: Dell Inc. (Nasdaq: DELL), Intel Corp. (Nasdaq: INTC) Hewlett-Packard Co. (NYSE: HPQ) Advanced Micro Devices Inc. (NYSE: AMD) and Sara Lee Corp. (NYSE: SLE).


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Here are highlights from Monday's Analyst Blog:

Twin Inspiron Z Launches by Dell

Dell Inc. (Nasdaq: DELL) recently unveiled two new models of its flagship Inspiron Z series. The company aims to lure customers and drum up business with the look and service of these newbies.

Inspiron is Dell's most popular laptop brand. Inspiron 13z and 14z are the new kids on the block, sporting slimmer designs along with aluminum lids and palm rests that have replaced plastic cases prone to scratches. The models sport Intel Corp.'s (Nasdaq: INTC) Sandy Bridge Core i3 and i5 processors, with up to 8GB of RAM, a choice of both hard and solid state drives, optical drive and many ports, including USB 3.0 and HDMI jacks.

Both models are priced at $599.99 and above. The 14z has already hit the stores, while the 13z will be available only in overseas markets as of now.

Dell's efforts to manufacture new and improved laptops at affordable prices should help it build a stronger position in the consumer market. Of course, the consumer market is a double-edged sword, with strong growth coming hand in hand with pricing and margin pressure, seasonality and heightened uncertainty.

The notebook market is also very competitive with key players launching new gadgets intermittently. Hewlett-Packard Co. (NYSE: HPQ) has also come out with a new 15.6-inch notebook, the 2000z. The HP 2000z is available now starting at $349.99 and featuring an Advanced Micro Devices Inc. (NYSE: AMD) Fusion processor 2GB-4GB of RAM, up to a 500GB hard drive and a six-cell battery that lasts for up to a claimed 5.5 hours.

A recent statistic provided by the research firm Gartner shows that worldwide shipments of portable PCs will increase 6.7% in 2011, 14.7% in 2012 and will reach 15.5% in 2015. The data also shows that shipments will be more in emerging markets rather than mature markets.

With a strong product portfolio in its kitty, Dell is expected to be one of the share takers in the market opportunity.

Apart from Dell's PC exposure, we are encouraged with its recent focus on the higher-end data storage market or cloud computing vertical, which is a booming market.

Dell Inc. has a Zacks #2 Rank, implying a short-term Buy recommendation.

Sara Lee Continues Slimming

Sara Lee Corp. (NYSE: SLE), one of the world's leaders in manufacturing and marketing of a range of branded packaged meat, bakery, and beverage products, registered decent fourth quarter 2011 earnings of 20 cents per share that shot up by 186% from 7 cents posted in the year-ago period. Earnings were in line with the Zacks Consensus Estimate.

The upswing came on the back of new products like Jimmy D's that were introduced and expanded successful brands like L'OR EspressO and Senseo into new geographies.

Sara Lee expects fiscal 2012 earnings to be in the range of 89 cents to 95 cents per share. The current Zacks Consensus Estimate is 22 cents for the first quarter of 2012. The estimate for full year 2012 is $1.06.

Slimming Down

The company's policy of streamlining the portfolios to provide the best foundation for a strong and focused business continued in the quarter, with more plans for the future. On August 9th, the company agreed to sell its North American refrigerated dough business to Ralcorp for $545 million.

Moreover, the divestment of North American Fresh Bakery to Grupo Bimbo is expected to close before the end of September. It has also decided to shed off the Spanish bakery and French refrigerated dough businesses.

Our Take

We are encouraged by Sara Lee's focus on leveraging its consumer brands to generate sales growth. The company intends to bring in changes in the organizational structure and product portfolio thereby, improving operational efficiency.

However, commodity-price inflation, competition in the branded food industry along with the presence of stiff competitors are matters of concern.

Currently SLE holds a Zacks #3 Rank. On a long-term basis, we maintain a Neutral rating on the stock with a short-term Hold rating.

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