Word of the Day

Commodity

Even if you don't think you do, you already know plenty about commodities. Want us to prove it? No problem.

What makes oil produced in Saudi Arabia different from oil exported from Nigeria? It's the same thing that makes the corn you ate at last summer¿s barbecue different from the corn used to produce ethanol. Stumped? Well, don't feel bad, it's a trick question. The answer? Absolutely nothing. Corn is corn no matter where it comes from -- just as wheat is wheat and natural gas is -- right! -- natural gas. (Though the quality may differ, the make-up is uniform.)

So, in less elaborate terms, corn and oil (and all other commodities) are homogenous goods that can be processed, resold and more often than not, used as an input to the production of other goods or services. These goods are traded on a commodity exchange, thus setting the price-per-barrel (or other metric unit) used to value them.

Now pay attention, here's a question that indeed does have an answer: What is the difference between a commodity and a stock? While a stock can tank and become worthless, a commodity cannot have its value be wiped to zero. One other difference: Most commodities are traded in futures, meaning traders buy and sell where they think the price of a product will be at a certain point in the future. Stocks trade based on the value of the underlying company at that point in time.

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Wednesday, June 18, 2008

Zacks Bull and Bear of the Day Highlights: EOG Resources, PMI Group, Group 1 Automotive, Advanced Analogic Technologies and School Specialty

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CHICAGO, Jun 18, 2008 (BUSINESS WIRE) ----Zacks Equity Research highlights EOG Resources (NYSE: EOG) as the Bull of the Day and PMI Group (NYSE: PMI) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Group 1 Automotive (NYSE: GPI), Advanced Analogic Technologies (Nasdaq: AATI) and School Specialty, Inc. (Nasdaq: SCHS). Full analysis of all these stocks is available at http://at.zacks.com/?id=2676.

Here is a synopsis of all five stocks:

Bull of the Day: EOG Resources (NYSE: EOG)

We continue to see EOG shares as a core holding in the large-cap E&P space for the company's demonstrated ability to achieve consistent production growth, primarily through organic means. EOG's strong positions in Texas Barnett Shale and North Dakota's Bakken plays provide it with a multi-year inventory of development drilling opportunities.

Production is expected to grow around 15% this year and approximately 14% over the following two years. We have raised our earnings estimates (08: $8.49 vs. $7.80; 09: $9.35 vs. $8.47) to account for the continued commodity-price strength.

Bear of the Day: PMI Group (NYSE: PMI)

PMI's combined ratio worsened significantly while the claim rates and average claim sizes increased considerably. We suspect the company may need to raise capital in the coming months in order to satisfy the requirements of the rating agencies. Based on the results, we have further reduced our estimates for FY08 and FY09. Our Sell rating on the shares remains unchanged.

Latest Posts on the Zacks Analyst Blog:

Group 1 Automotive (NYSE: GPI)

Group 1 Automotive, Inc. has generated most of its recent growth through acquisitions. The recently reduced interest rates will provide further growth for the company. GPI aggressively manages its costs and has dealerships with above-average profitability. Further, the company has a strong geographical presence.

However, a difficult car sales environment is affecting revenues. The company anticipates a modest 1-2% growth in revenues for 2008. Thus, we rate the stock a Hold with a six-month target price of $24.50.

Advanced Analogic Technologies (Nasdaq: AATI)

We reiterate our Hold recommendation on the shares of Advanced Analogic Technologies, which is a supplier of power management semiconductors for mobile consumer electronic devices, such as wireless handsets, notebook and tablet computers, smartphones, digital cameras and personal media players.

Despite a top-line miss for the first quarter, the company sees more traction into the Asian handset market after several new products have recently been introduced. These products are of the high margin variety and have the potential to ramp up company margins.

School Specialty, Inc. (Nasdaq: SCHS)

We maintain our Hold rating on School Specialty, Inc. The company's industry-leading market position and cost-cutting efforts are offset by growing competitive pressures and limited organic growth prospects. We are reducing our earnings estimate to $2.30 from $2.38 per share for 2009 and issuing our fiscal 2010 EPS estimate of $2.45.

School Specialty owns the largest share of the highly fragmented $7 billion supplemental educational resources market. Several of the company's brands are leaders in their respective markets. However, reduced government spending, increasing competition, and risks to the company's restructuring plan offset the positives.

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

About the Bull and Bear of the Day

Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.

About the Analyst Blog

Updated throughout every trading day, the Analyst Blog provides analysis from Zacks Equity Research about the latest news and events impacting stocks and the financial markets.

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 by visiting 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.

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
   312-265-9380 Visit: www.zacks.com

Copyright Business Wire 2008 **********************************************************************
   As of Saturday, 06-14-2008 23:59, the latest Comtex SmarTrend� Alert, an automated pattern recognition system, indicated an
   UPTREND on 06-06-2008 for EOG @ $133.43. As of Saturday, 06-14-2008 23:59, the latest Comtex SmarTrend Alert, an automated
   pattern recognition system, indicated a DOWNTREND on 05-30-2008 for GPI @ $26.11. As of Saturday, 06-14-2008 23:59, the latest
   Comtex SmarTrend Alert, an automated pattern recognition system, indicated a DOWNTREND on 02-14-2008 for PMI @ $7.52. 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.