Zacks Analyst Blog Highlights: Valero Energy Corporation, St Joe Co., Martha Stewart Living Omnimedia, Wal-Mart and Photronics, Inc.

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: Valero Energy Corporation (NYSE: VLO), St Joe Co. (NYSE: JOE), Martha Stewart Living Omnimedia (NYSE: MSO), Wal-Mart (NYSE: WMT) and Photronics, Inc. (NASDAQ: PLAB).

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Here are highlights from Monday’s Analyst Blog:

Valero Still Looking Pumped

San Antonio, Texas-based Valero Energy Corporation (NYSE: VLO) is the largest independent refiner and marketer of petroleum products in the U.S., with 3.1 million barrels per day in refining capacity in its 16 refineries located throughout the U.S., Canada and the Caribbean.

Our continued favorable view for Valero shares reflects the company's strong financial health, balanced refining portfolio and leverage to the still-wide crude quality spreads. We believe that these attributes position Valero to navigate the current cyclical downturn much better than many of its independent refining peers.

St. Joe Needs a Prayer

St Joe Co. (NYSE: JOE) is currently focusing on increasing liquidity through the sale of non-core assets, reducing headcounts, and reducing cap-ex expenditures in response to a rapidly deteriorating residential Florida real estate market.

In addition, JOE has eliminated most of its long term debt and opened a new $100 million line of credit. There are no signs that the housing situation will get better in the next six months and we think the worst is yet to come. Near term, we would stay away from companies with exposure to the residential building business. While we think the company is a good long-term investment due to its extensive land holdings in one of the fastest growing states, we are maintaining our near-term Sell recommendation.

Martha Stewart Getting By

We are maintaining our Hold rating on shares of Martha Stewart Living Omnimedia (NYSE: MSO). Despite the likelihood of a protracted recession, we think MSO can meet our EPS estimates, driven by revenue growth and margin expansion in the Broadcasting and Merchandising segment.

The company continues to execute on its original strategy of leveraging its Martha Stewart brand across all business segments, signing a slew of high-margin merchandising deals since 2006 -- including a recent deal with Wal-Mart (NYSE: WMT), and repositioning its website away from on-line commerce to an interactive, ad-generating aggregator of content.

Photronics a Sell to $1.50

The manufacture of photomasks is increasingly turning to in-house facilities at more mature nodes. Consolidation within the industry continues, as semiconductor manufacturing companies acquire photomask production assets. Photronics, Inc. (NASDAQ: PLAB) is the last major independent merchant supplier.

The capital structure has considerable leverage with a debt-to-equity ratio of 41.7%, which will be lowered after the convertible bonds mature in December. Almost all of the debt is convertible subordinated notes, which if exercised, could potentially be dilutive to equity shareholders.

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