The Zacks Analyst Blog Highlights:Arris Enterprises, Google, Cisco Systems, Comcast and Total System Services

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Sep 17, 2013, 09:30 ET

CHICAGO, Sept. 17, 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 Arris Enterprises Inc. (Nasdaq:ARRS-Free Report), Google Inc. (Nasdaq:GOOG-Free Report), Cisco Systems Inc. (Nasdaq:CSCO-Free Report), Comcast Corp. (Nasdaq:CMCSA-Free Report) and Total System Services Inc. (NYSE:TSS-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:

Arris Upgraded to Outperform

We upgrade our recommendation on Arris Enterprises Inc. (Nasdaq:ARRS-Free Report) to Outperform. Both the top and the bottom lines comfortably outpaced the Zacks Consensus Estimate. Arris currently has a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

Arris completed the acquisition of the cable set-top box business of Motorola Mobility, a division of Google Inc. (Nasdaq:GOOG-Free Report). This acquisition gave Arris a strong foothold in the high-speed video offerings and Internet delivery markets. The merged entity has a global presence with more than 500 customers in 70 countries. Further, this deal will strengthen Arris' patent portfolio and provide license to access several patents of Motorola Mobility.

With Motorola Mobility's Cable Home business in its kitty, Arris is likely to become a formidable player in the video infrastructure and customer premises equipment for the cable TV industry currently dominated by Cisco Systems Inc. (Nasdaq:CSCO-Free Report).

The demand for Arris' newly-launched products is expected to rise from the second half of 2013. We believe that home gateway, Wi-Fi enabled modem, edged router and multi-screen software will be the primary growth drivers.

From Jun 2012, Comcast Corp. (Nasdaq:CMCSA-Free Report), the largest customer of Arris, started commercially deploying the company's E6000 Converged Edged Router. E6000 router will act as a powerful C4 cable modem termination system of the company while it can be converted into a Converged Cable Access Platform.

Comcast will also launch Arris' XG1 gateway for its innovative X1 TV service from the third quarter of 2013. The XG1 gateway was developed after conducting Reference Design Kit (RDK) Gateway trial runs with Comcast.

Total System a Total Strong Buy

On Sep 14, 2013, Zacks Investment Research upgraded electronic payment service providerTotal System Services Inc. (NYSE:TSS-Free Report) to a Zacks Rank #1 (Strong Buy) from Zacks Rank #2 (Buy).

Why the Upgrade?

Total System has been experiencing rising earnings estimates on the back of improved second-quarter 2013 results. Moreover, growth in transaction volumes and new accounts as well as diversification through NetSpend acquisition have been impressive.

Additionally, this electronic payment processing and merchant acquiring services provider outperformed the year-to-date S&P 500 index, which posed a 20.4% increase against the company's return of 37.1%. Total System is expected to grow by about 11.8% in the long run, which appears sustainable.

On Jul 23, Total System reported second-quarter 2013 operating earnings per share of 34 cents, which beat the Zacks Consensus Estimate by a penny but also fell short of the year-ago number by a cent.

Total System is witnessing healthy growth from its merchant acquiring business owing to technological upgrades and the attainment of spectacular processing contracts. This is reflected by higher number of accounts on file, along with the recent strategic alliances with ProPay and PayPal.

Moreover, the acquisition of NetSpend in Jul 2013 is expected to amplify the company's core synergies and operating leverage, while also diversify Total System's product portfolio into prepaid card services. The accretion from the acquisition is also reflected by the raised guidance.

Accordingly, management upped its top-line growth projections within mid-to-high teens range in 2013 from prior 5−7% growth estimate. Excluding acquisition-related expenses, earnings and EBITDA are also predicted to grow in high-teens range, up from prior single-digit estimates. Management also expects to reduce its debt, borrowed to fund the acquisition, as soon as possible and sustain a debt-to-EBITDA of 2.0x in future, along with consistent capital deployment.

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

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