Zacks Bull and Bear of the Day Highlights: EOG Resources, PMI Group, Group 1 Automotive, Advanced Analogic Technologies and School Specialty

CHICAGO--(BUSINESS WIRE)--Zacks Equity Research highlights EOG Resources (NYSE: EOG) as the Bull of the Day and PMI Group (NYSE: PMI) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Group 1 Automotive (NYSE: GPI), Advanced Analogic Technologies (Nasdaq: AATI) and School Specialty, Inc. (Nasdaq: SCHS). 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: EOG Resources (NYSE: EOG)

We continue to see EOG shares as a core holding in the large-cap E&P space for the company’s demonstrated ability to achieve consistent production growth, primarily through organic means. EOG’s strong positions in Texas Barnett Shale and North Dakota’s Bakken plays provide it with a multi-year inventory of development drilling opportunities.

Production is expected to grow around 15% this year and approximately 14% over the following two years. We have raised our earnings estimates (08: $8.49 vs. $7.80; 09: $9.35 vs. $8.47) to account for the continued commodity-price strength.

Bear of the Day: PMI Group (NYSE: PMI)

PMI’s combined ratio worsened significantly while the claim rates and average claim sizes increased considerably. We suspect the company may need to raise capital in the coming months in order to satisfy the requirements of the rating agencies. Based on the results, we have further reduced our estimates for FY08 and FY09. Our Sell rating on the shares remains unchanged.

Latest Posts on the Zacks Analyst Blog:

Group 1 Automotive (NYSE: GPI)

Group 1 Automotive, Inc. has generated most of its recent growth through acquisitions. The recently reduced interest rates will provide further growth for the company. GPI aggressively manages its costs and has dealerships with above-average profitability. Further, the company has a strong geographical presence.

However, a difficult car sales environment is affecting revenues. The company anticipates a modest 1-2% growth in revenues for 2008. Thus, we rate the stock a Hold with a six-month target price of $24.50.

Advanced Analogic Technologies (Nasdaq: AATI)

We reiterate our Hold recommendation on the shares of Advanced Analogic Technologies, which is a supplier of power management semiconductors for mobile consumer electronic devices, such as wireless handsets, notebook and tablet computers, smartphones, digital cameras and personal media players.

Despite a top-line miss for the first quarter, the company sees more traction into the Asian handset market after several new products have recently been introduced. These products are of the high margin variety and have the potential to ramp up company margins.

School Specialty, Inc. (Nasdaq: SCHS)

We maintain our Hold rating on School Specialty, Inc. The company’s industry-leading market position and cost-cutting efforts are offset by growing competitive pressures and limited organic growth prospects. We are reducing our earnings estimate to $2.30 from $2.38 per share for 2009 and issuing our fiscal 2010 EPS estimate of $2.45.

School Specialty owns the largest share of the highly fragmented $7 billion supplemental educational resources market. Several of the company’s brands are leaders in their respective markets. However, reduced government spending, increasing competition, and risks to the company’s restructuring plan offset the positives.

Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.

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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