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Zacks Bull &Amp; Bear of the Day Highlights: China Life Insurance, Red Robin Gourmet Burgers, ValueClick, General Motors and Web.Com
Wednesday, April 01, 2009 6:54 AM


(Source: Business Wire)trackingZacks Equity Research picks China Life Insurance (NYSE: LFC) as Bull of the Day and Red Robin Gourmet Burgers (Nasdaq: RRGB) as Bear of the Day. In addition, the analysts at Zacks Equity Research discuss the latest on ValueClick, Inc. (Nasdaq: VCLK), General Motors Corp. (NYSE: GM) and Web.com (Nasdaq: WWWW).

Full analysis of all these stocks is available at: http://at.zacks.com/?id=2678

Bull of the Day

Headquartered in Beijing, China, China Life Insurance Company Ltd. (China Life, NYSE: LFC) is China's leading life insurance company. As of December 31, 2008, China Life had about 716,000 exclusive agents, over 12,600 direct sales representatives, and nearly 94,000 non-dedicated agencies throughout China.

LFC's FY08 results were disappointing, stemming from a combination of external negative factors -- snow, earthquake, and the global financial crisis. However, despite growing competition as well as volatile capital market, the company seems to be in a better position than its peers due to its prudent investment strategy and beneficial geographical positioning.

Further, it has not yet successfully completed its conversion to higher-margin products, nor does its current valuation fully reflect its growth prospects, which we think have further improved in view of China's stimulus package, as also the regulator's decision to allow the insurers to invest directly in the infrastructure projects. Therefore, we maintain our Buy recommendation on the shares.

Bear of the Day

We believe shares of Red Robin Gourmet Burgers (Nasdaq: RRGB) will continue to underperform both the larger market and the restaurant industry. Red Robin's traffic began declining long before the onset of rising gas prices in October 2007, which began choking business in the casual dining sector -- a victim of poor site selection in new markets.

In spite of their poor performance, the company has retained and even added to these sites as it repurchased 45 franchises since 2005. Moreover, 2009 consensus EPS estimates are 10% higher than ours, and we think our estimate may prove aggressive if the economic slowdown is deeper or more protracted than we currently anticipate.

Barring a prolonged recession, which is a distinct possibility -- we think RRGB's traffic should stabilize in late 2009 as it laps weak comps and unit growth is rationalized industry-wide. Indeed, industry capacity is currently contracting as unit growth is slowed, underperforming units are closed and more independents close.

Recent Analysis from the Analyst Blog

ValueClick Feels the Impact

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