CHICAGO, Dec. 31, 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 Red Hat Inc. (NYSE:RHT-Free Report), LSI Corp. (Nasdaq:LSI-Free Report), Avago Technologies (Nasdaq:AVGO-Free Report), Stratasys Ltd. (Nasdaq:SSYS-Free Report) and Marvell Technology Group (Nasdaq:MRVL-Free Report).

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Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

Here are highlights from Monday's Analyst Blog:

Strong Buy on Red Hat

On Dec 28, 2013, Zacks Investment Research upgraded Red Hat Inc. (NYSE:RHT-Free Report)to a Zacks Rank #1 (Strong Buy). Long-term expected earnings growth rate of 19.1%, impressive third-quarter results and a positive estimate revision trend makes Red Hat an attractive investment opportunity.

Why the Upgrade?

Red Hat reported strong third-quarter results, beating the Zacks Consensus Estimate on both lines. Earnings jumped 44.8% from the year-ago quarter to 42 cents per share. Revenues increased 15.4% year over year to $396.5 million and were ahead of management's guided range of $381.0 million to $384.0 million.

For the fourth quarter of fiscal 2014, Red Hat expects revenues in the range of $397.0 million to $400.0 million. Management expects operating margin to be around 24.5%. Non-GAAP earnings are expected to be in the range of 36 cents to 38 cents per share for the upcoming quarter.

We believe that strong billings growth (up 19.0% year over year), solid product pipeline, continuing investments to expand product portfolio and partnerships will drive growth. Moreover, Red Hat continues to gain market share. We believe that the company has significant growth potential in the public cloud segment over the long term.

Estimate Revision

The Zacks Consensus Estimate for fiscal 2014 increased 5.2% (5 cents) to $1.01 per share as most of the estimates were revised higher over the last 30 days. For fiscal 2015, the Zacks Consensus Estimate increased 1.2% (2 cents) to $1.15 per share over the same time frame.

Is the LSI Acquisition in Jeopardy?

Since the news of the proposed acquisition of LSI Corp. (Nasdaq:LSI-Free Report) by Avago Technologies (Nasdaq:AVGO-Free Report) hit the market, a number of law firms have initiated investigations on the legitimacy of the deal.

They are investigating any breach of fiduciary duty and violation of state rules and regulations and the primary target has been the board of directors of LSI.

The latest entrant into the group of law firms is Kirby McInerney LLP. Earlier, law firms such as Ryan & Maniskas, LLP, Levi & Korsinsky and Harwood Feffer LLP started similar investigations to determine whether the LSI board has sufficiently discharged its duties related to the sale and to verify if Avago Technologies has adequately paid for the LSI shares.

Avago Technologies entered into a definitive agreement to acquire LSI for $6.6 billion in cash. Per the agreement, LSI shareholders will receive a cash payment of $11.15 for each share. The transaction is expected to be completed within the first half of 2014, subject to regulatory approvals and fulfillment of customary closing conditions.

It is worth noting that LSI shares jumped 38.6% to close at $10.96 on Dec 16 post the announcement of the acquisition deal. This substantial jump in the share prices has resulted in a year-to-date return of 45.8% on the LSI shares.

We believe that LSI was a potent acquisition target as the company has a broad range of products that enables it to serve a diverse clientele in the hard disk drive (HDD), server and networking end markets.

Moreover, LSI Corp. is gaining rapid traction in the growing PCIe flash adapter market segment which is a big positive for the company. However, the current investigations may prove to be a roadblock to the successful completion of the deal.     

Currently, LSI has a Zacks Rank #3 (Hold). Other better-ranked stocks in the technology sector that investors may consider are Stratasys Ltd. (Nasdaq:SSYS-Free Report) and Marvell Technology Group (Nasdaq:MRVL-Free Report). While Stratasys holds a Zacks Rank #1 (Strong Buy), Marvell has a Zacks Rank #2 (Buy).

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

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