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The Medicines, Companhia Paranaense de Energia, or COPEL, McDonalda?s, Abercrombie & Fitch and ExxonMobil Corporation

^{Published on 2010-10-11 07:12:44 - Market Wire}
 

CHICAGO--([ BUSINESS WIRE ])--[ Zacks Equity Research ] highlights: The Medicines Co. (Nasdaq: [ MDCO ]) as the Bull of the Day and Companhia Paranaense de Energia, or COPEL (NYSE: [ ELP ]) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on McDonalda™s (NYSE: [ MCD ]), Abercrombie & Fitch (NYSE: [ ANF ]) and ExxonMobil Corporation (NYSE: [ XOM ]).

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 ]:

The Medicines Co. (Nasdaq: [ MDCO ]) reported second-quarter EPS of $0.29, well above the Zacks Consensus Estimate and the year-ago EPS. Performance was boosted by higher revenues and lower operating expenses. Revenues increased 5.7%.

The company received a major boost in August regarding its Angiomax patent extension case. The US Patent and Trademark Office has extended the principal patent on Angiomax by a year to August 2011, and has been instructed to treat the patent extension application as having been filed on a timely basis.

We are also pleased to see that management is actively pursuing in-licensing deals and acquisitions to drive growth. Based on the improved outlook, we are upgrading the stock to Outperform.

[ Bear of the Day ]:

Based on higher productivity and lower cost of capital, ANEEL (Brazilian National Agency for Electric Utilities) proposed a tariff adjustment for Companhia Paranaense de Energia, or COPEL (NYSE: [ ELP ]) of 9.74% on average, effective June 2010. This rule is essentially designed to regulate a monopolistic environment.

We are concerned about the political influence on COPEL's affairs. The government of the State of Parana owns 58.6% of the company's outstanding voting shares, which gives it the power to control the election of the majority of the company's Board of Directors and appoint senior management.

Thus expecting any positive share driving catalysts, we downgrade our recommendation on the ADR to Underperform from Neutral. Our $22.00 target price is based on 11.1X 2010 earnings per ADR.

Latest Posts on the Zacks [ Analyst Blog ]:

Employment Report In Depth

In September, the unemployment rate for adult men remained at 9.8%, and up from 9.7% in July, but down from 10.3% a year ago. A bit of that is an illusion, though, as the participation rate for men ticked down from 74.3% in August to 74.2% in September, and a year ago it was 74.7%. The employment rate for men ticked down to 66.9% from 67.0% in August, and was also the 67.0% rate of a year ago.

For women, the unemployment rate was unchanged at 8.0% in September, up from 7.9% in July and a year ago. However, in the female case, both the participation rate and the employment rate rose by two ticks, to 60.3% and 55.5% respectively. A year ago they were at 60.5% and 55.7%, respectively. Thus while it looks like men and women fared equally in the last month, with the unemployment rate unchanged for both, women are doing better directionally, as has generally been the case in the Great Recession.

There are two possible reasons for men faring worse than women in this downturn. The first is that the industries that have been particularly hard-hit in this downturn tend to be far more male-dominated than the industries that have skated though this recession more or less unscathed. The most glaring example of this would be the construction industry versus the health care industry (more on the industry breakdowns below).

The second explanation is that on average, women tend to still be paid far less than men do, and employers might be more prone to let their relatively high-priced male employees go first before their cheaper female employees. The industry effect is probably the bigger one, but the two are not mutually exclusive and both might be playing a role.

Teens, regardless of gender have had a very hard time of it in this recession. Just go to a McDonald's(NYSE: [ MCD ]) and you will see this for yourself. Normally the blemishes you see on the cashier's face are from acne, not wrinkles and age spots as is the case now. In September, the teen unemployment rate fell to 26.0% from 26.3% in August and from 26.1% in July and a year ago. The drop, though, was all due to a big decline in the participation rate which fell to 35.2% from 35.0% in August, but well below the 36.8% rate of a year ago.

The percentage of teens that actually have a job was just 25.3%, down from 25.9% in August and down from 27.2% a year ago. While for the most part the earnings from teen jobs tend to go towards clothes from Abercrombie & Fitch (NYSE: [ ANF ]) and other teen clothing stores, for many it is a significant part of paying for college. Also, when teens work, they learn important job skills, such as the importance of actually showing up, and doing so on time. The extremely low levels of teens working is not a good sign for the future.

Exxon to Shed GoM Assets

ExxonMobil Corporation (NYSE: [ XOM ]) intends to sell a few of its oil and gas production assets in the shallow water of Gulf of Mexico (GoM), including some pipeline holdings, in order to manage its portfolio.

In the initial divestiture phase, the oil giant will shed pipeline assets and platforms situated along the central Gulf Coast that produce approximately 12,000 barrels of oil per day and 49 million cubic feet of natural gas per day, or about 14% of the company's oil and gas production in the area.

Last year, Exxon had reported average net production of about 85,000 barrels of liquids per day and 350 million cubic feet of gas per day from the area.

The company has already started the marketing procedure, but did not finalize any deal in the absence of a prospective buyer. The largest U.S. oil company also highlighted that it will initiate a deal only if it finds the proposal agreeable.

Divestiture plans are usually a part of big, integrated oil companiesa™ strategies to offload mature oil and gas properties. Such attempts are reflective of their intention to focus on large, capital- and technology-intensive projects, which are expected to provide significant increments to their production and reserves.

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

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