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: Maxim Integrated Products, Inc. (NASDAQ: MXIM), American International Group, Inc. (NYSE: AIG), Lions Gate Entertainment (NYSE: LGF), Aventine Renewable Energy Holdings, Inc. (NYSE: AVR) and Cirrus Logic, Inc. (NASDAQ: CRUS).
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Here are highlights from Monday’s Analyst Blog:
Maxim Won't Chase Growth
Maxim Integrated Products, Inc. (NASDAQ: MXIM) has had one of the most efficient business models in the technology sector, offering 65-70% gross margins in 4 consecutive fiscal years.
A few quarters ago, management decided to revise the corporate strategy, which had been focused on pursuing high-margin business, thus limiting expansion into high-growth markets. The company has now entered several high-volume markets such as the digital camera and display markets. Since these markets allow less attractive gross margins, management has reduced its targeted gross margin to the 63-65% range.
Another Take on the Bonus Tax
Yesterday, in response to the furor over the American International Group, Inc. (NYSE: AIG) bonus situation, the House passed a 90% tax on all bonus payments from firms getting more than $5.0 billion in TARP funds.
There are 2 arguments that have been made against this tax, one serious and the other the height of hypocrisy.
Lions Gate an Entertainment Buy
Founded in 1997, Lions Gate Entertainment (NYSE: LGF) is a film studio, which produces and distributes motion pictures for theatrical and straight-to-video release, and television programming for the cable and broadcast networks. Lions Gate's crown jewel is its film library of roughly 8,000 film titles and 4,000 T.V. episodes.
We are maintaining our Buy rating on Lions Gate. With a strong track record of producing critically acclaimed small and mid-budget specialty films, we think Lions Gate is well positioned to increase market share as the big studios continue to shrink production of specialty films. Further, Lions Gate's large film library should, in our view, spur renewed growth in home entertainment revenue in 2H FY10 as consumer adoption of the Blu Ray format accelerates.
Aventine Renewable Losing Juice
Aventine Renewable Energy Holdings, Inc. (NYSE: AVR) reported its operating and financial results for the 4th quarter and full-year ended December 31, 2008. Net loss for the reported quarter was $36.9 million, or -$0.86 per diluted share, as compared to net income of $3.3 million, or $0.08 per diluted share, in the year-ago quarter.
Reported quarter results were affected primarily as a result of significantly higher corn costs, higher conversion costs, losses incurred on the sale of auction rate securities, valuation allowances established or increased for deferred tax assets, charges incurred from suspending construction at expansion sites, the impairment of plant development costs and a loss recognized on marketing alliance investments.
Cirrus Logic Still Makes Sense
Cirrus Logic, Inc. (NASDAQ: CRUS) is a fabless OEM (original equipment manufacturer) of analog, mixed-signal and digital processing integrated circuits (ICs).
Although the company's Q3 2009 results were in line with the pre-announcement, we expect further weakness in top-line growth.
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