Zacks Bull and Bear of the Day Highlights: SIRIUS XM Radio, Lender Processing, EMC, Lockheed Martin and Sony
CHICAGO, June 2, 2011 /PRNewswire/ -- Zacks Equity Research highlights: SIRIUS XM Radio (Nasdaq: SIRI) as the Bull of the Day and Lender Processing Services (NYSE: LPS), as the Bear of the Day. In addition, Zacks Equity Research provides analysis EMC Corp. (NYSE: EMC), Lockheed Martin Corp. (NYSE: LMT) and Sony Corp. (NYSE: SNE).
Full analysis of all these stocks is available at http://at.zacks.com/?id=2678.
Here is a synopsis of all five stocks:
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We upgrade our recommendation on SIRIUS XM Radio (Nasdaq: SIRI) to Outperform based on better business visibility of the company. An improving U.S. auto sector and a rise in consumer spending will sustain SIRIUS XM's near-term growth.
Management maintained its full-year 2011 revenue target while raising its free cash flow estimate. We believe upcoming SIRIUS XM 2.0 product will help the company to increase its subscriber base. Moreover, the company will get pricing flexibility from the fourth quarter of 2011, after the completion of stipulated FCC regulatory period.
We believe improvements in several operational metrics as well as sufficient cash position are the main reasons for SIRIUS XM's valuation premium. We thus upgrade our rating to Outperform with a price target of $2.75, based on 55x our fiscal 2011 earnings estimate.
Lender Processing Services' (NYSE: LPS) first-quarter 2011 results were a mixed bag. We are concerned about the high debt on its balance sheet as well as challenging origination and default market. There is also a possibility of further foreclosure delays.
Moreover, the company is anticipating near-term challenges due to significant changes in the origination volumes. Hence, we downgrade our recommendation from Neutral to Underperform on the shares.
Our six-month target price of $24.00 equates to about 6.8x our estimate for 2011. The target price implies an expected total negative return of 8.44% over that period.
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EMC Faces Increased Scrutiny
A leading provider of data storage and security solutions, EMC Corp. (NYSE: EMC) is expected to face increased scrutiny from a U.S. Senate committee, which oversees Internet policy, as reported by the news agency, Reuters.
The scrutiny follows a recent security encroachment at the military contractor, Lockheed Martin Corp. (NYSE: LMT), which uses EMC's security products and services. Lockheed said that it detected the attack immediately and undertook effective countermeasures to prevent any significant data theft.
Earlier, in March 2011, EMC's security division RSA was also a victim to a sophisticated cyber attack that compromised a widely-used technology for preventing unauthorized access to key corporate/government data.
At that time, EMC had noted that the information could potentially be used to reduce the effectiveness of SecurID, although the company had declined to comment on the type or the quantity of information stolen.
Senators are questioning the reliability of EMC's widely used SecurID tokens for authenticating the identity of people using the Internet. SecurID helps organizations to exchange sensitive data with customers and third parties by offering an additional layer of protection to the private clouds and important computer networks.
The product prevents unauthorized breach even if a password is stolen. The RSA device, working in sync with back-end software, generates an additional password only known to the holder of the device. However, this mechanism becomes vulnerable once a hacker comes to know of the additional password.
Security advisors believe that there may be a link between the RSA security breach and Lockheed Martin incident, and hackers may have got sufficient data, which they can use to breach the SecurID systems. However, both EMC and Lockheed have declined to comment on the recent attack.
Rising Cyber Crimes - Cyber attacks have been on the rise in recent times. The sophisticated computer attack reflects the growing risk that companies and governments face from cyber crime. Countries are concerned about the growing number of attacks on information technology systems as hackers look to steal data, intellectual property, money and even sensitive government information.
Besides Lockheed Martin, broadcaster PBS was also a victim of a recent security compromise, when its website was breached by hackers. In recent months, email marketer Epsilon Data Management LLC, South Korea-based Hyundai Capital and PlayStation maker Sony Corp. (NYSE: SNE) also faced cyber attacks.
Sony suffered a massive security breach in April, which affected more than 100 million online accounts of PlayStation Network gaming service and other online services.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.
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