Mark Vickery

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Zacks Equity Research highlights PetMed Express (Nasdaq: PETS) as the Bull of the Day and Salix Pharmaceuticals (Nasdaq: SLXP) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Brasil Telecom (NYSE: BRP), Campbell Soup (NYSE: CPB) and HDFC Bank (NYSE: HDB).

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: PetMed Express (Nasdaq: PETS)

PetMed Express and subsidiaries, doing business as 1-800- PetMeds, is a leading nationwide pet pharmacy. The company markets its health products for dogs, cats, and horses direct to the consumer through national television, online, and direct mail advertising campaigns.

On October 20, PetMed Express delivered another strong quarter that was above expectations and our estimates. The company's sales trends remain strong, despite the difficult economic environment. What's more, the company's healthy repeat customer business has allowed management to cut operating expenses without hurting its overall sales growth. As a result, the company has posted impressive profit margin gains.

Going forward, we think the company can increase its operating profit margin to 15.3% in 2009 and 15.7% in 2010, up from 13.7% in fiscal 2007. All told, we are becoming more bullish on PetMed Express and upgrading the stock from Hold to Buy. Our target price is $20, or about 20x our fiscal 2009 EPS estimate.

Bear of the Day: Salix Pharmaceuticals (Nasdaq: SLXP)

Salix Pharmaceuticals is focused on drugs used in the treatment of a variety of gastrointestinal diseases. The company is facing difficult times thanks to the FDA's approval to three generic versions of lead product, Colazal. As such, we expect 2008 to be an extremely challenging year for the company, with a significant decline in top-line growth. Moreover, we expect the company to post a loss in 2008 and 2009.

We believe that the main potential for the company lies with the approval of additional indications for Xifaxan, particularly the irritable bowel syndrome [IBS] indication. However, we were disappointed to hear that Salix expects to file the NDA [new drug application] for the IBS indication in mid-2010, a significant delay from the previously announced timeline of late 2008 / early 2009.

While new product approvals should help restore investor confidence, the possibility of a patent challenge for Xifaxan will remain an overhang on the shares in the coming quarters.