Zacks Analyst Blog Highlights: OSI Pharmaceuticals, Solectron and Flextronics.

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: OSI Pharmaceuticals (Nasdaq: OSIP), Solectron

See the latest posts to the Analyst Blog by visiting: http://at.zacks.com/?id=2673

Here are highlights from Monday's Analyst Blog:

OSI Pharma Remains a Sell

We recommend investors sell their position in OSI Pharmaceuticals (Nasdaq: OSIP) at the current level. We believe that Tarceva will have meaningful use as a targeted cancer therapy for non-small cell lung and pancreatic cancer. However, the Eyetech acquisition was a financial disaster, and management has decided to discontinue operations in ophthalmology. We expect the company to divest Macugen soon.

In the meantime, OSI must prove to the Street there is more to the name than just Tarceva and DPP-IV royalties. The impetus of the Eyetech acquisition was diversification. Now, with Eyetech gone, OSI is back to where it was in 2005: a one trick pony with a small pipeline. We see little reason to own the stock. Our target is $30.

Hold Solectron on Acquisition

Solectron (NYSE: SLR) announced that it would be acquired by Flextronics (Nasdaq: FLEX) for approximately $3.6 billion. Solectron holders will have the right to receive either a cash payment of $3.89 or 0.345 shares of Flextronics stock, subject to a limitation that not more than 70% of SLR holders elect to receive cash.

We expect the deal to be approved by regulators and shareholders with a closing date before the end of calendar 2007, and see SLR shares trading close to $3.89. We expect the deal to be approved by regulators and shareholders with a closing date before the end of calendar 2007. We, therefore, maintain Hold rating on the shares of SLR with a price target of $3.89.

We believe that this combination makes sense as it will diversify Flextronics business mix by increasing its exposure to the computing market and reduce its reliance on consumer electronics. Moreover, Flextronics will be able to achieve greater economies of scale to compete in an increasingly competitive and low margin business. We expect to see further consolidation of the sector in the coming months and years.

See the latest posts to the Analyst Blog by visiting http://at.zacks.com/?id=2645

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