Just like you never want to hear a doctor say "oops" in the operating room, you never want to see a going-concern statement in a financial report about a company you own. Accountants throw these in when they've been over the books, talked to customers, and checked the horoscopes and have concluded there is "substantial doubt" about a company's ability to remain in business. In short, don't blame the accountants if the company files for bankruptcy protection.

You¿d reckon that a going-concern statement would be enough to send investors running to the exits, but it's not. True, many large institutions automatically bail when an existing company gets slapped with one of these, but many individuals (often wrongly) take a chance they know more than the bean counters.

During the tech boom of the late 1990s, many companies actually went public even though they had been hit with going-concern statements. Many of those companies subsequently disappeared. Enough said.

Home / Markets / Industries / Energy

Wednesday, July 09, 2008

Zacks Analyst Blog Highlights: El Paso Corp., Akzo Nobel N.V., Schering-Plough Corp., Moneygram International, Inc. and PMC-Sierra, Inc.

Email this Story | Respond to Editor | Print

Comtex

CHICAGO, Jul 09, 2008 (BUSINESS WIRE) ----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: El Paso Corp. (NYSE: EP), Akzo Nobel N.V. (OTC: AKZOY), Schering-Plough Corp. (NYSE: SGP), Moneygram International, Inc. (NYSE: MGI) and PMC-Sierra, Inc. (Nasdaq: PMCS).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=4579

Here are highlights from Tuesday's Analyst Blog:

Growth Potential Big for El Paso

We are upgrading premier pipeline operator El Paso Corp. (NYSE: EP) from a Hold to a Buy based on the quality and growth potential of its two core business segments. EP boasts an industry-leading project backlog with exposure to major consuming markets and an impressive growth profile relative to its peers.

Its exploration and production (E&P) business has taken large strides to solidify its position as a low-risk, high-growth operator onshore the U.S. We are raising our price target from $16.00 per share to $27.00 per share.

Europe Issues Affect Akzo Nobel

Akzo Nobel N.V. (OTC: AKZOY) is enhancing its global position in coatings through acquisitions and internal growth. Recently, the company underwent a major transformation with the sale of its Organon pharma business to Germany-based pharmaceutical company Schering-Plough Corp. (NYSE: SGP) and acquisition of UK-based largest chemical producer Imperial Chemical Industries PLC.

However, rising commodity costs are negatively affecting margins. The company is also facing a difficult environment in Europe. This leads us to rate the stock a Hold with a six-month target price of $73.00.

Mixed Blessings for Moneygram

Moneygram International, Inc.'s (NYSE: MGI) 1Q08 loss of $4.40 per share was substantially worse than the estimates. Financial results from continuing operations included net securities loss of $307.3 million resulting from the realignment of the company's investment portfolio. MGI's strong top-line growth during 1Q08 was totally overshadowed by the investment portfolio losses.

MGI recently received capital and debt infusion from an investment group. Due to our concerns for additional losses in the coming quarters, as well as the possibility of further downgrades, we have further lowered our FY08 estimate. However, we think that the bad news has been priced in the current share price to a great extent and thus, we rate MGI a Hold at present.

PMC-Sierra Tied to Telco Spending

PMC-Sierra, Inc. (Nasdaq: PMCS) designs and develops high-performance integrated circuits for the telecommunications and data networking industries. March quarter top- and bottom-lines beat the consensus estimate. The sequential increase in Q1 revenue was the result of stronger demand in Fiber to The Home (FTTH) and printer chips. The management expects Q2 revenues to be between $135 million to $140 million, or 8 to 12% revenue growth. We maintain our Hold rating and target price of $8.

The intense level of competition is pushing original equipment manufacturers (OEMs) to outsource development, which plays into PMC-Sierra's strength. Another important trend is the growing need for broadband connectivity for wireless and wireline applications and the requirements of service providers to offer higher levels of quality of service.

Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=2649.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=2677

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=4580.

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

SOURCE: Zacks.com

Zacks.com
   Mark Vickery Web Content Editor 312-265-9380 Visit: www.zacks.com

Copyright Business Wire 2008 **********************************************************************
   As of Saturday, 07-05-2008 23:59, the latest Comtex SmarTrend� Alert, an automated pattern recognition system, indicated an
   UPTREND on 04-03-2008 for EP @ $16.98. As of Saturday, 07-05-2008 23:59, the latest Comtex SmarTrend Alert, an automated pattern
   recognition system, indicated a DOWNTREND on 06-24-2008 for MGI @ $1.12. As of Saturday, 07-05-2008 23:59, the latest Comtex
   SmarTrend Alert, an automated pattern recognition system, indicated an UPTREND on 05-30-2008 for SGP @ $20.22. For more information
   on SmarTrend, contact your market data provider or go to www.mysmartrend.com SmarTrend is a registered trademark of Comtex
   News Network, Inc. Copyright � 2004-2008 Comtex News Network, Inc. All rights reserved.