Mark Vickery

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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: Tower Group, Inc. (Nasdaq: TWGP), NuStar Energy L.P. (NYSE: NS), Lockheed Martin Corp. (NYSE: LMT), D.R. Horton, Inc. (NYSE: DHI) and National Beverage Corp. (Nasdaq: FIZZ).

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Here are highlights from Monday's Analyst Blog:

Tower Group Outlook Lowers

During the second quarter, Tower Group, Inc. (Nasdaq: TWGP) announced the acquisitions of Castlepoint Holdings and Hermitage Insurance Group. We expect the transaction to significantly increase the company's capitalization and simplify its current organizational structure. Based on the company's guidance and pending acquisitions, we are adjusting our fiscal 2008 and 2009 EPS targets to $2.95 per share and $3.30 per share, respectively, from $3.00 per share and $3.40 per share, previously.

The shares of Tower Group currently trade at 8.0x our 2008 earnings estimate of $2.95 per share, with a price-to-book of 1.53x to its second-quarter book value of $13.82 per share. Although we believe the company remains well-positioned to continue growing premiums at a rapid clip, we think its aggressive expansion plan in the softening market should in all likelihood experience a worsening within its combined ratios further, modest level of subprime paper in the investment portfolio adds a level of uncertainty over the near term.

NuStar Energy Shining Brightly

NuStar Energy L.P. (NYSE: NS) is expected to post solid third- quarter results on the back of stronger margins and higher sales volumes from the new asphalt business and increased pipeline throughput. We continue to like the partnership for its diversified asset base and strong distribution-growth prospects. Our new $56 price objective, up from $54 before, reflects a distribution run rate of $4.25 per unit and yield of 7.65%.

The inclusion of the asphalt business in the asset mix further adds to the partnership's diversification and growth prospects. A strong pipeline of organic growth projects and contribution from acquisitions provide the partnership with an above peer-group average distribution coverage ratio. NuStar's current quarterly distribution of $0.985 per unit represents an attractive yield of 8.15%. We estimate that the partnership can sustain distribution- growth in the 8%-9% annual range over the next few years.