CHICAGO -- 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: Sprint Nextel (NYSE: S), Integrated Device Technology (Nasdaq: IDTI), SigmaTel (Nasdaq: SGTL) and MontpelierRe (NYSE: MRH).
See the latest posts to the Analyst Blog by visiting: http://at.zacks.com/?id=2673
Here are highlights from Monday's Analyst Blog:
Strength at Sprint Nextel
Sprint Nextel (NYSE: S) is a leading provider of business and wireless communications services in the U.S. The combined entity of Sprint/Nextel provides opportunities in business and wireless markets, where Sprint has historically focused on the consumer base and Nextel on wireless and business accounts. Operational and capital spending synergies are expected to exceed $14.5 billion.
The company spun off its local telephone business (EMBARQ) in early May to strengthen its operating performance and focus on higher growth markets. The company lost a significant number of post-paid subscribers in the third quarter, but overall results were in-line with our estimates.
We maintain our Buy rating based on the belief that the combined Sprint/Nextel entity will have impressive operating scale to gain market share in the United States. Our six-month target price remains $21.
Expect IDTI Growing Pains
Integrated Device Technology (Nasdaq: IDTI) is a semiconductor OEM of digital telecommunications and data communications devices. The company recently completed a major acquisition of ICST that will increase the size of the firm by 40%.
September quarter results outperformed the consensus expectations as a result of faster-than-expected cost-cutting measures. Pricing pressures continue, especially in SRAM.
IDTI recently bought SigmaTel's (Nasdaq: SGTL) PC audio division, and we remain concerned it could hurt margins. We continue to rate shares of IDT a Hold.
Readjustments to MRH
3Q06 results were better than expected at MontpelierRe (NYSE: MRH). MRH is poised to benefit from exponentially rising prices in the property catastrophe reinsurance market (property > 75% of MRH's premiums), as the company has replenish its reserve additions via a capital raising, and declining some renewal business.
Moreover, after losing three-quarters of its equity in the 2005 hurricanes, MRH significantly adjusted its risk profile to reduce it exposure to extremely large losses per dollar of capital, while targeting the same ROE (15%). Our $22 price target incorporates a pre-Katrina P/B multiple of 1.5x. We think there is potential upside to our 2007 EPS estimates and stock price forecast if MRH succeeds in growing its business on the strength of rising prices, while capping severe losses.
See the latest posts to the Analyst Blog by visiting http://at.zacks.com/?id=2645
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