The Zacks Analyst Blog Highlights:C.H. Robinson Worldwide, Merrimack Pharmaceuticals, Eli Lilly, Sanofi and Gilead Sciences
CHICAGO, Aug. 26, 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 C.H. Robinson Worldwide, Inc. (Nasdaq:CHRW-Free Report), Merrimack Pharmaceuticals, Inc. (Nasdaq:MACK-Free Report), Eli Lilly and Company (NYSE:LLY-Free Report), Sanofi (NYSE:SNY-Free Report) and Gilead Sciences Inc. (Nasdaq:GILD-Free Report).
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Here are highlights from Friday's Analyst Blog:
C.H. Robinson Upgraded to Neutral
On Aug 23, 2013, we upgraded third-party logistics company, C.H. Robinson Worldwide, Inc. (Nasdaq:CHRW-Free Report), to Neutral from Underperform.
Why the Upgrade?
We believe that the company's diverse customer base, advanced technology and service levels, and brand value will help in winning market share over the long term. The company will gain through investments in complementary businesses like ocean, air and customs.
Detailed Analysis
C.H. Robinson is considered to be among the first-in-class third-party logistics (3PL) companies given its consistent growth rate in the past few years. The demand for 3PL services is rapidly growing as shippers seek cost-effective one-stop solutions for their freight forwarding requirements. Given the company's advanced technology and service capabilities, we believe it is poised to capture a significant share in the current freight transportation market.
The acquisition of Phoenix is expected to expand the company's global footprint in forwarding services in both ocean and air transportation categories along with custom brokerage. The company also acquired Poland-based freight forwarder – Apreo Logistics S.A – that mostly compliments its trucking business with dry van, temperature controlled as well as liquid and dry bulk capabilities. The acquisitions are expected to expose C.H. Robinson to higher growth markets.
C.H. Robinson continues to have a strong balance sheet with significant liquidity. The company also remains focused on increasing shareholders' wealth by regular payments of dividends and share repurchases. We believe that increased returns strengthen shareholders' confidence in the company.
Nevertheless, we prefer to stay on the sidelines as a competitive freight market, declining truckload market share and limited margin expansion opportunities pose as near-term headwinds.
Further, the higher personnel expenses given the rise in headcount and the increased integration cost associated with the Phoenix acquisition will hinder the company's growth. Hence, the company is expected to perform at par with the broader industry and we advise investors to hold on to the stock.
C. H. Robinson currently carries a Zacks Rank #4 (Sell).
Merrimack Study Data Published
Merrimack Pharmaceuticals, Inc.'s (Nasdaq:MACK-Free Report) recently announced the publication of a paper on its phase II study on its oncology candidate, MM-398, in the British Journal of Cancer.
MM-398 is currently in phase III development for the second-line treatment of pancreatic cancer patients, whose disease has progressed after being treated with Eli Lilly and Company's (NYSE:LLY-Free Report) Gemzar (gemcitabine). Merrimack expects to complete patient enrollment in the third quarter of 2013 and to report top-line results in fourth-quarter 2013 or first-quarter 2014 for this phase III study.
MM-398 was granted orphan drug designation by the European Medicines Agency (EMA) and the U.S. Food and Drug Administration (FDA) in 2011, for the treatment of pancreatic cancer. MM-398 is being studied in several phase I and phase II studies for cancer indications other than pancreatic cancer.
The company has an assignment, sublicense and collaboration agreement with PharmaEngine, Inc. Under the agreement, Merrimack reacquired the rights to MM-398 in Europe and certain other countries. Merrimack made an upfront payment of $10 million to PharmaEngine and will be making milestone payments.
Merrimack also has a license and collaboration agreement with Sanofi (NYSE:SNY-Free Report) for the development of another oncology candidate, MM-121. MM-121 is being evaluated for multiple cancer indications including breast cancer (phase II).
We note that Merrimack has another oncology candidate, MM-111, in its pipeline. Last month, the company advanced MM-111 into phase II development for the treatment of advanced gastric, esophageal and gastroesophageal junction (GEJ) cancer.
Merrimack currently carries a Zacks Rank #3 (Hold). At present, companies like Gilead Sciences Inc. (Nasdaq:GILD-Free Report) look well-positioned with a Zacks Rank #1 (Strong Buy).
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