Zacks Analyst Blog Highlights: SGX Pharmaceuticals, Inc., Eli Lilly & Co., Petrobras, Sonic Innovations, Inc. and Amerigroup Corp.

CHICAGO--(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: SGX Pharmaceuticals, Inc. (Nasdaq: SGXP), Eli Lilly & Co. (NYSE: LLY), Petrobras (NYSE: PBR), Sonic Innovations, Inc. (Nasdaq: SNCI) and Amerigroup Corp. (NYSE: AGP).

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Here are highlights from Thursday’s Analyst Blog:

Lilly Buyout Price for SGXP Stays

After the discontinuation of its only candidate Troxatyl for third-line acute myelogenous leukemia in 2006, SGX Pharmaceuticals, Inc. (Nasdaq: SGXP) shifted its focus to the FAST programs. While the FAST technology may provide long-term growth, SGX Pharma remains several years away from getting a product on the market.

On July 9, Eli Lilly (NYSE: LLY) announced the decision to acquire all outstanding shares of SGX Pharma at $3 per share. We are impressed with the definitive merger agreement and believe the price is fair to the company.

Petrobras Pushes the Gas Pedal

We are keeping our Buy recommendation on Petrobras (NYSE: PBR) ADRs. We like Petrobras for its positive production-growth profile, and the improving outlook for its downstream business. Moreover, the discovery of the giant Tupi field opens up a new range of possibilities for the company in the long run.

The company’s large inventories of development projects are also positive. It is also important to mention that Brazil was recently upgraded to investment grade by Standard & Poor’s. Finally, second quarter 2008 results were better than expected, and the outlook for the following quarters remains quite encouraging, even though lower oil prices. Petrobras is expected to grow annual volumes by approximately 6% over the next few years.

Sonic Innovations Progressing

Sonic Innovations, Inc. (Nasdaq: SNCI) finally gave up on its auditory testing equipment unit Tympany and the referral concept and instead has expanded its distribution relationships. The sale of Tympany has helped the company clear a path to meaningful earnings growth. It is also acquiring and opening new clinics to help drive meaningful sales growth from new product launches.

The improvements made to the distribution, management and sales structure have been helping to drive meaningful sales growth. The company’s emphasis on research and development has resulted in new product launches that continue drive sales growth in the high double digits.

Amerigroup with Regulators Ahead

Amerigroup Corp. (NYSE: AGP) is the largest and most diversified publicly traded Medicaid managed-care provider in the U.S. Excluding a one-time charge of $234.2 million associated with the settlement of the outstanding qui tam civil litigation, the company reported better-than-expected adjusted net income in the second quarter. However, we believe as a result of the qui tam litigation, Amerigroup will face greater regulatory scrutiny in future contracting activities.

Growth via acquisition remains a key element in the management’s corporate strategy. We believe Amerigroup’s established relationships with state government payors, substantial regulatory expertise and solid cash position augur well for entry to new markets and bolt-on acquisitions to existing operations. Furthermore, the company is well diversified geographically and across several Medicaid populations, which reduces the potential impact of reimbursement rate changes by any single state.

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