Zacks Bull and Bear of the Day Highlights: Macy's, Genworth Financial, McGraw-Hill Companies, Broadcom and NetLogic Microsystem

Sep 13, 2011, 09:30 ET from Zacks Investment Research, Inc.

CHICAGO, Sept. 13, 2011 /PRNewswire/ -- Zacks Equity Research highlights Macy's, Inc. (NYSE: M) as the Bull of the Day and Genworth Financial (NYSE: GNW) as the Bear of the Day. In addition, Zacks Equity Research provides analysis McGraw-Hill Companies (NYSE: MHP), Broadcom (Nasdaq: BRCM) and NetLogic Microsystem (NASDAQ: NETL).

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Full analysis of all these stocks is available at http://at.zacks.com/?id=2678.

Here is a synopsis of all five stocks:

Bull of the Day:

Macy's, Inc. (NYSE: M) has been taking prudent steps to increase sales, profitability and cash flows, which include integration of operations, consolidation of divisions and customer-centric localization initiatives. To help drive traffic, Macy's continues to focus on price optimization, inventory management and merchandise planning.

These helped the company to deliver better-than-expected second-quarter 2011 results. The quarterly earnings of $0.55 per share beat the Zacks Consensus Estimate of $0.47, and jumped 57.1% from the prior-year quarter.

Following this management raised its outlook. Macy's now expects fiscal 2011 earnings between $2.60 and $2.65 per share. The company hinted that it is also seeking to expand both the Macy's and Bloomingdale's brands.

Bear of the Day:

Genworth Financial's (NYSE: GNW) second quarter operating loss wider than the Zacks Consensus Estimate loss. A substantially higher year-over-year loss at the U.S. Mortgage Insurance segment, partially offset by better results at Retirement & Protection and at International, resulted in the company's soft performance. We expect mortgage insurance business to remain pressured.

Additionally, improvements in its other business lines are expected to be slow, given the economy's sluggish recovery. Our six-month target price of $5.25 equates to 10.5x our earnings estimate for 2011, implies a negative return of about 9.8% over that period. This is consistent with our Underperform recommendation on the shares.

Additionally, the quantitative Zacks Rank for Genworth is currently #5 (Strong Sell), indicating downward pressure on the shares over the near term. Short interest is currently 1.2 days.

Latest Posts on the Zacks Analyst Blog:

Greek Default Fears All Over Again

What is new on the Greece front? For starters, they are running out of cash to pay their bills. And they may not be able to get the next tranche of funds from the European bailout fund given their inability to put in place previously agreed-to measures. It is unclear at this stage whether it is a high-stakes poker game between the Greeks and Europeans (read: Germans) or something real. But it has nevertheless renewed default fears. And those fears are putting a spotlight on a number of French and other European banks that have exposure to Greek debt.

The resignation of a senior European Central Bank official on Friday and the lack of direction from the G-7 meeting over the weekend add to the feeling of policy paralysis over the Greek situation. All of this is pushing up the yields on Italian and Spanish government bonds and pressuring down the exchange value of the common currency. Given this uncertain backdrop, it is no surprise that the yield on the 10-year U.S. Treasury bond and the price of gold are in record territory.

In corporate news, McGraw-Hill Companies (NYSE: MHP) announced its decision to split itself into two separate public companies focused on the education and markets businesses. The company is also accelerating its $2 billion stock buyback program and is committing to repurchase $1 billion by the end of 2011. In major M&A news, Broadcom (Nasdaq: BRCM) is acquiring NetLogic Microsystem (Nasdaq: NETL) for $3.7 billion that will strengthen the company's position in offering integrated communications and processing platforms.

 Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.

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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