The Zacks Analyst Blog Highlights: Pep Boys - Manny, Moe & Jack, BMC Software, International Machines Corp, CA Technologies and Salesforce.com

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Sep 11, 2013, 09:30 ET

CHICAGO, Sept. 11, 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 the Pep Boys - Manny, Moe & Jack (NYSE:PBY-Free Report), BMC Software (Nasdaq:BMC-Free Report), International Machines Corp (NYSE:IBM-Free Report), CA Technologies (Nasdaq:CA-Free Report) and Salesforce.com (NYSE:CRM-Free Report).

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Here are highlights from Tuesday's Analyst Blog:

Pep Boys Acquires 17 Stores in Southern Cal

Last week, Pep Boys - Manny, Moe & Jack (NYSE:PBY-Free Report) purchased 17 Discount Tire Centers from AKH Company Inc. All the centers are in the greater Los Angeles market.

The stores will be opened under the Pep Boys brand name on Sep 12, 2013. They will provide all kinds of maintenance and repair services and sell branded tires.

The acquisition takes the total tally of Pep Boys stores in California to 150 and in the U.S. to 750. As a result, at least one Pep Boys location will now be within a 3-mile radius of almost three-fourth of Los Angeles' population.

The easy access to stores should help boost Pep Boys' revenues. The company generated revenues of $527.6 million in the thirteen weeks ended Aug 3, 2013, up 0.4% from $525.7 million for the thirteen weeks ended Jul 28, 2012. Pep Boys has been striving to improve customer satisfaction and convenience since its inception in California in 1933.

Based in Philadelphia, PA, Pep Boys supplies tires, batteries, new and remanufactured parts for vehicles, chemicals and maintenance items, fashion, electronic, and performance accessories. It also provides non-automotive merchandise such as generators, power tools and personal transportation products.

Currently, Pep Boys carries a Zacks Rank #3 (Hold).

BMC Optimizes Mainframe Costs

BMC Software (Nasdaq:BMC-Free Report) has introduced an analytical tool – BMC Cost Analyzer – that reduces mainframe software expenses by approximately 5% to 20%. Most importantly, the new tool lowers the costs of International Machines Corp's (NYSE:IBM-Free Report) mainframe software by more than 20.0%.

The BMC Cost Analyzer for zEnterprise strategizes cost reduction techniques by identifying peak workloads, work load placement and workload management. This innovation from BMC is particularly important as IBM mainframe licensing charges are increasing by more than 7.0% annually, according to BMC. Swiss Re Group, an insurance provider, has adopted the BMC Cost Analyzer.

Thus, BMC's analytical tool is expected to gain traction in the mainframe market due to its cost saving capabilities and ability to provide management with detailed insights into the cost drivers. For these purposes, BMC has launched six mainframe products that aim at efficient workload management and cost optimization.

However, there are other companies such as CA Technologies (Nasdaq:CA-Free Report) that provide similar tools. Thus, gaining market share might prove to be difficult for the company. Moreover, competition from companies such as Salesforce.com (NYSE:CRM-Free Report) and Oracle Corp. remains a headwind for the company, going forward.

BMC's decision to privatize will help to revamp and restructure its business model while capitalizing on its core competency.

The company reported a tepid first quarter wherein the top and bottom line missed the Zacks Consensus Estimate. Going forward, we remain concerned due to weaker expenditure from different governments, continuing macro-economic sluggishness and constrained IT spending projections.

Currently, BMC has a Zacks Rank #5 (Strong Sell).

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