Zacks Bull and Bear of the Day Highlights: Shutterfly, Tessera Technologies, Automatic Data Processing, Kelly Services and Manpower - Press Releases
For Immediate Release
Chicago, IL – January 7, 2010 – Zacks Equity Research highlights Shutterfly (SFLY) as the Bull of the Day and Tessera Technologies (TSRA) the Bear of the Day. In addition, Zacks Equity Research provides analysis on Automatic Data Processing (ADP), Kelly Services (KELYA) and Manpower (MAN).
Full analysis of all these stocks is available at http://at.zacks.com/?id=5506
Here is a synopsis of all five stocks:
We are upgrading our recommendation on the shares of Shutterfly (SFLY) to Outperform. Increased usage of digital cameras combined with accessibility of high-speed internet provides significant expansion potential for the company.
Product innovation, strategic partnerships with retailers and opportunistic acquisitions also augur well. We believe Shutterfly's focus on developing a successful commercial printing business aided by strategic partnerships will significantly contribute to its earnings.
On the downside, we see a continuation of pricing pressure in its printing business. Also, a weak economy and rising unemployment will negatively impact the company's profitability as the consumers' discretionary spending is expected to be restricted in the near term.
Tessera Technologies (TSRA) is a provider of back-end technology for semiconductor manufacturing. The company's technology enables miniaturization of electronic goods, which is a driver of IC sales in the market today.
Consequently, the host of patents, new technologies, customer wins, volume production at customers, ongoing strength in the DRAM market and the licensing model that supports attractive margins are positives. However, protection of intellectual property (IP) for a company this small is a challenge, as are the inherent pricing pressures in the DRAM market.
We have lowered our estimates for the fourth quarter, considering the weak outlook. Additionally, we expect only slight sequential growth in each quarter of 2010, indicating another weak year. Consequently, we are downgrading TSRA shares from Neutral to Underperform.
Latest Posts on the Zacks Analyst Blog:
ADP Sees 84,000 Jobs Lost
This morning, Automatic Data Processing (ADP), the largest processor of private sector payrolls, reported that the economy lost 84,000 more private sector jobs in December. This was somewhat worse than the consensus expectations of 75,000 lost jobs.
It was, however, a substantial improvement from their estimate that the economy lost 145,000 jobs in November, which was actually revised down from an initial estimate of 169,000 lost jobs. It was also the smallest job loss by ADP’s calculations since March 2008.
All in all, it was a slightly disappointing report, but the focus is still going to be on the Big Kahuna that comes out on Friday morning -- the BLS numbers. There, the consensus is for total jobs to be unchanged; that sure would be a nice improvement over December 2008, when the economy dropped 681,000 jobs.
However, even if the economy does start to add jobs, it is going to take awhile before it brings the unemployment rate down. Discouraged workers who feel that it is not even worth their while to look for work since the employment situation is so bad are not even currently considered to be in the labor force. They are neither employed nor unemployed, according to the official figures. As the economy starts to create some new jobs, they will come flooding back into the workforce, and the first step on their journey will be to be unemployed.
Thus, there will be far more to consider on Friday than just the unemployment rate (U-3) and the total number of jobs gained or lost. Pay attention to the civilian participation rate, and the percentage of the population that is employed (what I like to call the "employment rate"). That is never going to be just 100 minus the unemployment rate (unless we seriously get rid of child labor laws and put all those lazy 2-year-olds to work). However, it has been in a pretty steep downtrend since 2000, with only a minor rise from 2004 to 2007.
Another thing to look for on Friday is the average workweek. When business picks up, the first thing they are going to do is bring the people they had on part time status back to full time. Next, look at the number of temp jobs, since the second thing a business will do is call Kelly Services (KELYA) or Manpower (MAN). Only when they are convinced that the upturn in the economy is for real will they want to hire new full-time employees, especially if they also provide benefits.
The final thing to be on the lookout for is the duration of unemployment numbers. This recession has been by far the worst in history when it comes to the length of time people stay out of work once they get laid off. Long-term unemployment is a very different experience than just being laid off for a few weeks, both financially and emotionally.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=5507.
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