Zacks Analyst Blog Highlights: deCODE genetics, Monogram, United States Cellular, Telephone and Data Systems and Canon

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: deCODE genetics, Inc. (Nasdaq: DCGN), Monogram (Nasdaq: MGRM), United States Cellular Corp. (NYSE: USM), Telephone and Data Systems Inc. (NYSE: TDS) and Canon, Inc. (NYSE: CAJ).

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Here are highlights from Tuesday’s Analyst Blog:

deCODE to Trade Sideways

We believe deCODE genetics, Inc. (Nasdaq: DCGN) will trend sideways over the next few months as investors await a partnership announcement for one or more of its clinical candidates. The company has launched as many as six diagnostics tests in the recent past; however, we maintain our Hold rating on the stock pending positive impact from the financial performance of these tests.

Incremental revenues from diagnostic tests coupled with cost savings from the reduction in staff will result in a lower cash burn in the coming quarters. We believe the shares offer substantial upside potential, but do not expect significant upward movement in the near term due to risks associated with the company's drug development program. We believe that the risk/reward profile is balanced for investors in deCODE at the current level.

We are optimistic that clinical results will demonstrate the viability of DG-031 for reducing cardiovascular events. The company has successfully reformulated the drug with the potential for use in prevention of myocardial infarction and is looking to partner the drug before moving it into phase III trials. We would like to see if deCODE can replicate the success which Monogram (Nasdaq: MGRM) has enjoyed with the launch of its Trofile assay for HIV patients.

Modest & Steady for U.S. Cellular

United States Cellular Corp. (NYSE: USM) is the sixth largest wireless telecom operator in the U.S. and the largest subsidiary of Telephone and Data Systems Inc. (NYSE: TDS). Although competition has intensified following recent consolidation in the wireless industry, U.S. Cellular's high service standards have helped maintain steady growth of subscribers and low churn (customer switching) rates (less than 2% for over ten years).

The company continues to improve customer retention while increasing operating return per subscriber. The management also issued a positive outlook for 2008 and continues its focus on improving profitability through network technology upgrades and strengthening its brand image. We maintain our Hold rating while providing a premium to its current valuation as we assess subscriber retention trends and the sustainability of average revenue per unit (ARPU) levels moving forward.

Strong Yen Not Helping Canon

Canon, Inc. (NYSE: CAJ) is one of the world’s leading designers, manufacturers, and marketers of office equipment, cameras, and optical products. The company’s investment in digital cameras has given it an industry leadership position and has been a significant contributor to growth.

Canon’s goal is to achieve the number one position in all of its current core businesses and establish new production systems to sustain competitiveness. Within the long-term management plan, Canon aims to achieve ¥1,100 billion in consolidated net sales and a consolidated ordinary income margin of at least 5.2% in 2010, as well as sales of ¥300 billion for its IT solutions operations. In order to achieve these targets, the company plans to increase its R&D spending to 10% of revenue by 2010 versus 8.2% in 2007.

Increasing price competition and slowing consumer demand for some of its optical products are causes for concern, as are decreasing profit margins. However, strong Yen appreciation has caused the company to lower its outlook for 2008 and pressures in developed nations pose further risks to sales. We therefore maintain a Hold rating on the shares.

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