Zacks Bull and Bear of the Day Highlights: MEMC Electronic Materials, MGIC, Tenneco, Dow Chemical and Radio One

CHICAGO--(BUSINESS WIRE)--Zacks Equity Research highlights MEMC Electronic Materials, Inc. (NYSE: WFR) as the Bull of the Day and MGIC Investment Corporation (NYSE: MTG) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Tenneco, Inc. (NYSE: TEN), The Dow Chemical Company (NYSE: DOW) and Radio One, Inc. (Nasdaq: ROIAK).

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: MEMC Electronic Materials, Inc. (NYSE: WFR)

MEMC Electronic Materials produces the raw material wafers used by semiconductor manufacturers in the production of integrated circuits (ICs).

The decision to supply wafers to the solar industry is paying huge rewards as demand for polysilicon has raced ahead of supply. The Solar business and the 300mm business are both high-margin products. The price of polysilicon has been cut in half over the past quarter, yet the firm can still earn $3.50 per share in 2009.

The stock is significantly undervalued. We are reiterating our Buy rating on the shares of WFR.

Bear of the Day: MGIC Investment Corporation (NYSE: MTG)

MGIC is the largest private mortgage insurer in the U.S., offering private mortgage insurance across the country, the District of Columbia, and in Puerto Rico through its subsidiary, Mortgage Guaranty Insurance Corporation [MGIC].

MTG's core 3Q08 results were slightly worse than we anticipated. The results continued to be impacted by increases in both the number of delinquent loans and foreclosures due to a further decline of home prices and slowing of economy.

In addition, higher loss severities, especially in California and Florida, also negatively affected the results. The company has taken several combative actions to bolster its capital. We expect significant overhangs for the industry in general and for MTG in particular, for at least the next several quarters. Our Sell rating is maintained on the shares.

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Tenneco, Inc. (NYSE: TEN)

Tenneco, headquartered in Lake Forest, Illinois, sells its products under brands including Monroe, Rancho, Clevite Elastomers, and Fric Rot ride control products and Walker, Fonos and Gillet emission control products. The company operates 80 manufacturing plants and 15 engineering facilities worldwide.

Tenneco is witnessing revenue improvements and has been successful in its cost reduction efforts and restructuring activities. The company holds a leading position in nearly every product category it offers. Moreover, diversification has proved to be a major positive for the company. The company projects that it will achieve an average compounded annual original equipment (OE) revenue growth rate of 11%-13% between 2008 and 2012.

The Dow Chemical Company (NYSE: DOW)

Dow Chemical is the largest producer of plastics and second-leading chemical company in the world. Vertical integration keeps cost low. Stronger demand in Europe, Asia Pacific, Latin America, India, Middle East and Africa has more than offset the continued economic slowdown in North America. Moreover, price gains have largely offset significant increases in costs of feedstock and energy.

The company's recently completed joint venture agreement with Petrochemical Industries Company of Kuwait is expected to reduce cyclicality in the chemical business. Further, its merger with Rohm and Haas will consolidate higher margin and higher growth specialty businesses and reduce the volatility in earnings and cash flow.

Radio One, Inc. (Nasdaq: ROIAK)

We maintain our Sell rating on Radio One. In our view, the company's high leverage (6.6x) will hinder its acquisition activities in the near future, and thus its attempts to diversify into higher-growth areas.

Moreover, in a period of declining earnings and cash flow, Radio One is nearing its covenant limits. The company is precariously close to its bank covenant limits, at a time when EBITDA is falling at an accelerating rate (down 25% in 3Q08).

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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.

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