Zacks Bull and Bear of the Day Highlights: Dell, AXIS Capital, Polycom, Cisco System, and Logitech International SA

Mar 30, 2011, 09:30 ET from Zacks Investment Research, Inc.

CHICAGO, March 30, 2011 /PRNewswire/ -- Zacks Equity Research highlights: Dell Inc. (Nasdaq: DELL) as the Bull of the Day and AXIS Capital (NYSE: AXS) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Polycom Inc. (Nasdaq: PLCM), Cisco System Inc. (Nasdaq: CSCO) and Logitech International SA (Nasdaq: LOGI).


Full analysis of all these stocks is available at

Here is a synopsis of all five stocks:

Bull of the Day:

Dell Inc. (Nasdaq: DELL) reported decent fourth quarter numbers, with earnings per share (EPS) and revenues moving up from the year-ago quarter. New products, a stronger services business, opportunities in the Electronic Medical Record sector, along with the introduction of Dell Streak were the achievements of the year.

Dell also benefited from the expanded customer base that resulted from the Perot acquisition. The stock is trading at a 42.7% discount to the peer group based on forward earnings estimate for 2011. Dell is currently trading at a P/E multiple of 9.2x our fiscal 2011 EPS estimate of $1.60.

We have an Outperform rating on Dell with a target price of $18.00, which represents a multiple of 11.3x fiscal 2011 EPS estimate, below the industry average and S&P 500.

Bear of the Day:

We are downgrading AXIS Capital's (NYSE: AXS) to Underperform as we expect the company to suffer majorly from catastrophic losses. We also believe that near-term results will remain curtailed, given the current stress in the overall economy and the soft pricing environment.

Though rate increases and growth opportunities have resulted in increased premiums in the Reinsurance segment, significant growth in the Insurance segment remains elusive.

Our six-month target price of $31.00 equates to 27.0x our earnings estimate for 2011. This implies a total negative return of 6.3% for the period when combined with the annual dividend of $0.92. This is consistent with our long-term Underperform recommendation on the stock.

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Videoconferencing Market Thriving

 Videoconferencing and telepresence becomes utmost necessity for large enterprises to reduce costs when the economy has started to recover from recession. Business enterprises are restricting their travel budgets as cost control measures. This makes high-definition telepresence solutions a cost-induced alternative in an increasingly interactive world. This market stands to gain in the near future since enterprises, governments, and educational institutions are increasingly recognizing the productivity-enhancing benefits of video conferencing.

In a recent study, Infonetics estimated that the worldwide videoconferencing market size will reach $5 billion by 2015. According to Infonetics, the global videoconferencing market size was $2.2 billion in 2010, up 18% year over year. Earlier, Gartner predicted an even rosier picture that videoconferencing market size will reach $8.6 billion by 2015.

We believe, in the long-run, the videoconferencing solutions market will see healthy demand as a result of several positive industry trends, including globalization and the proliferation of branch offices; concerns about time demand and high cost of travel; homeland security and other government initiatives; as well as distance learning and healthcare applications.

The two major players in this market are Polycom Inc. (Nasdaq: PLCM) and Cisco System Inc. (Nasdaq: CSCO), which gains a major foothold after acquiring Tandberg TV. These two entities together commands more than 80% of the global videoconferencing market with almost equal share between them. However, as of now, Polycom remains the only pure play telepresence solutions provider, which is yet to collaborate with another company. Logitech International SA (Nasdaq: LOGI) also joins the fray through its acquisition of privately held LifeSize Communications Inc. Another major player is Avaya.

Get the full analysis of all these stocks by going to

About the Bull and Bear of the Day

Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.

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Mark Vickery

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