The Zacks Analyst Blog Highlights: Nasdaq OMX Group, Netflix, DTS, AVG Technologies and BioMarin Pharmaceutical

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Jun 03, 2013, 09:30 ET

CHICAGO, June 3, 2013 /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 Nasdaq OMX Group Inc. (Nasdaq:NDAQ), Netflix Inc. (Nasdaq:NFLX), DTS Inc. (Nasdaq:DTSI), AVG Technologies NV (NYSE:AVG) and BioMarin Pharmaceutical Inc. (Nasdaq:BMRN).

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Here are highlights from Friday's Analyst Blog:

Netflix to Join Nasdaq 100

Nasdaq OMX Group Inc. (Nasdaq:NDAQ) announced the inclusion of a leading Internet television network – Netflix Inc. (Nasdaq:NFLX) to its Global Index group. Effective Jun 6, this non-financial stock will be part of the Nasdaq-100 index, which is a premium global index including non-financial securities based on the market capitalization.

Nasdaq-100 index comprises the companies of the core trade sector such as computer hardware & software, telecommunications, retail & wholesale trade and biotechnology. These companies are based out of the US and other international countries. Likewise, Netflix will also be a part of the Nasdaq-100 Equal Weighted index (NDXE) and the Nasdaq-100 Ex-Technology Sector index (NDXX).

Netflix a Worthy Pick for Nasdaq-100

Based out of the US, Netflix enjoys a dominant position in the Internet television space with a market capitalization of $12.5 billion. The company is a leading provider of television shows and movies on televisions, computer or other mobile devices both in the US and internationally. Netflix' strong margins growth over the past several quarters complements its robust outlook, going forward.

Even the shares of Netflix are maintaining a rising trend. Yesterday's closing price represents a strong one-year return of about 217.1% and a year-to-date return of about 149.3%. The Nasdaq index jumped 23.0% and 17.9%, respectively during the same period.

Apart from a history of outperforming estimates and strong financial results, Netflix's strong growth momentum is also depicted by the positive estimate revisions that the company has been experiencing thus far.

Following the release of the first-quarter results, the Zacks Consensus Estimate for 2013 surged 34.5% to $1.60 per share in the last 60 days. Moreover, the Zacks Consensus Estimate for 2014 rose 13.7% to $3.08 a share during the same period. Given the healthy upward estimate revisions for both 2013 and 2014, Netflix warrants a Zacks #2 (Buy).

Nasdaq Growing Through Diversification

On the other hand, Nasdaq's consistent focus on growing its non-transaction base revenues elucidates the company's strategy of diversification to ease the competitive pressure in the global market. As such, Nasdaq's organic growth is being helped by the steady market data and technologyas well as issuer and access services revenues primarily due to the increased deliveries of contracts and greater demand for co-location services.

The Nasdaq-100 index is also a part of the company's Global Market index, which is a primary contributor to the issuer services. Early this week, Nasdaq also received an approval to launch its new interest rate derivative trading platform – Nasdaq NLX. This further underscores the company's strategic move to attain a competitive edge in Europe.

While Nasdaq carries a Zacks Rank #3 (hold), we maintain a positive stance on Netflix in the near term. Meanwhile, other stocks in the non-financial sector that are outperforming include DTS Inc. (Nasdaq:DTSI) and AVG Technologies NV (NYSE:AVG), both of which carry a Zacks Rank #1 (Strong Buy).

BioMarin's Vimizim Under Review

BioMarin Pharmaceutical Inc. (Nasdaq:BMRN) recently received positive news when the company's Biologics License Application (BLA) for its pipeline candidate Vimizim (BMN-110, elosulfase alfa) was accepted for review by the US Food and Drug Administration (FDA).

The BLA was submitted to the FDA earlier in the year. We note that BioMarin Pharma is seeking US approval of Vimizim (previously known as GALNS), for the treatment of patients suffering from mucopolysaccharidosis type IVA (MPS IVA) or morquio A syndrome.

The FDA will review the BLA for Vimizim on a priority basis. The FDA had requested for additional Chemistry, Manufacturing and Controls (CMC) information from the company while conducting an initial review. Upon receiving the required information from BioMarin Pharma, the FDA designated it as a major amendment to the application. Consequently, the Prescription Drug User Fee Act (PDUFA) date was pushed back by three months to Feb 2014.

BioMarin Pharma is also seeking approval for Vimizim in the European Union (EU) for the same indication. The European Medicines Agency (EMA) recently validated BioMarin Pharma's Marketing Authorization Application (MAA) for Vimizim, submitted earlier in the year.

The EMA had earlier accepted BioMarin Pharma's request for accelerated assessment for this MAA and the validation now allows EMA to start its formal review process.

BioMarin Pharma expects an opinion from the EMA's Committee for Medicinal Products for Human Use (CHMP) on Vimizim in Dec 2013. The company expects a decision from the European Commission in the first quarter of 2014, provided the CHMP renders a positive opinion on Vimizim.

We expect investor focus to stay on the regulatory updates on Vimizim. We believe that an approval for Vimizin in both the US and EU and subsequent successful commercialization will augment BioMarin Pharma's portfolio.

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