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: Xoma Ltd. (Nasdaq: XOMA),
Goldman Sachs (NYSE: GS),
Priceline.com (Nasdaq: PCLN),
ON Semiconductor (Nasdaq: ONNN)
and LSI Logic (NYSE: LSI).
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Here are highlights from Tuesday’s Analyst
Blog:
XOMA Making the Right Moves
Advancement of XOMA-052 in the current phase I trials remains the chief
focus of the management of Xoma Ltd. (Nasdaq: XOMA).
Data on these two trials are expected in the third quarter 2008. We
expect an initiation of a phase I trial on XOMA-629 also in the third
quarter 2008.
Management will look to bring in one additional collaboration partner on
board at some point this year. All the above milestones should get the
stock moving higher in the second half of the year.
We believe Xoma's antibody discovery platform is starting to show signs
of paying off, as both -052 and -629 could prove to be significant
products in the not-so-distant future. The name remains significantly
under-valued in our view.
Royalty revenue continues to provide meaningful growth to Xoma. Sales of
Raptiva totaled $61 million in the first quarter 2008. Sales of Lucentis
totaled $393 million in the first quarter. Both products are growing at
double-digits rates. In May 2008 Xoma used this growing royalty line to
secure a $55 million loan with Goldman Sachs (NYSE: GS).
But with the shares trading at $2.15, Xoma is a very volatile stock.
Don’t Chase Priceline Shares Here
Priceline.com's (Nasdaq: PCLN)
first quarter results easily blew past consensus estimates, and
management's guidance for 2008 was equally bullish. The strength in
Priceline.com's international business and operating expense controls
continue to drive the company's impressive results.
What's more, we think the company is well-positioned to weather a
slowdown in consumer spending due to the value proposition it offers
customers. Still, we wouldn't chase the shares here, as they trade at
over 25x our 2008 EPS estimate. That is a pricey multiple in the current
market.
We have been bullish on PCLN shares since we upgraded the stock in
January of 2006, when it was trading around $22 per share. However, we
think the stock, which is now trading around $140, is fairly valued. We
think it is appropriate to go with a neutral stance.
ON Semi On the Right Path
ON Semiconductor Corporation (Nasdaq: ONNN)
is an original equipment manufacturer (OEM) of primarily analog
semiconductors used within a diverse set of end markets. March quarter
results beat consensus estimates on the top and bottom-line.
Next quarter's revenue guidance is for 3%-6% growth. Management
anticipates that total revenues will be approximately $545 to $560
million in the second quarter of 2008. Further, they expect that average
selling prices for the second quarter of 2008 will be down approximately
two per cent sequentially. Backlog represents over 85% of next quarter's
revenue projection.
The company has also begun to get significant revenue from its recent
major purchase of LSI Logic's (NYSE: LSI)
Gresham, Oregon wafer facility, which has the potential to be a solid
revenue driver. The products produced at the Gresham facility are of the
high-margin variety. We feel the stock is under valued at these levels,
and recommend investors Buy the shares.
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