Zacks Investment Research

Medidata Solutions (MDSO) analysts moved their forecasts higher after the last quarterly report, pushing shares to a Zacks #1 Rank (Strong Buy). The company is also active in the M&A market and trades with solid valuations. Company Description Medidata Solutions provides software services used by life science groups in clinical development. Record-Setting Quarter On May 10 Medidata reported first quarter results that included revenues of $40.8 million, an 8% increase. Gross margins were also on the rise and are now at 68%. Coupling higher revenues with wider margins led to net income of $7.2 million, up $0.5 million. Earnings per share came out to $0.14, which was 3 cents lighter than expected. Despite the miss analysts still raised estimates for the full-year. The Zacks Consensus Estimate for 2011 rose 3 cents, to $1.13. Next year's average projection is also up 3 cents, to $1.25. In 2010 Medidata earned $1.01 per share, putting expected growth rates at 12% this year and 11% in 2012. M&A Activity Medidata announced that it...

We are downgrading shares of Carnival Corporation (CCL) from Neutral to Underperform. Political disturbances in some geographies and the earthquake in Japan are currently acting as the major hindrance to the company's growth. Moreover, surging fuel prices and a greater exposure to a sluggish European market will be headwinds for the company. Carnival decreased its projections for net revenue yields from the range of 2.5%-3.5% to 1.5%-2.5% for fiscal 2011 on a constant dollar basis. The company lowered its guidance due to route changes resulting from political disturbances in the Middle East and North Africa (MENA) and the earthquake in Japan. A greater-than-expected slowdown in the European economies could also threaten the company's profitability, given its increasing exposure to Europe in terms of revenue generation and capacity expansion compared with the industry. Our six-month target price of $33.00 equates to about 13.5x our estimate for 2011.  

Estimates have been rising for Kohl's Corporation (KSS) after the company reported better than expected comparable sales for the month of June. The retailer is coming off a strong first quarter too, with management raising its earnings guidance for the full year. Kohl's has a solid balance sheet and strong free cash flow which it has used to recently buy back shares and initiate a regular quarter dividend. It currently yields 1.8%. Valuation is attractive too with shares sporting a PEG ratio of 1.1. Strong June Sales Kohl's reported exceptionally strong comp sales for the month of June on July 7. Total sales rose 9.2% thanks to a impressive 7.5% increase in comparable store sales. Year-to-date, total sales are up 4.4% on comparable store sales growth of 2.6%. First Quarter Results Kohl's reported better than expected results for the first quarter of 2011 back on May 12. Earnings per share came in at 73 cents, a penny above the Zacks Consensus Estimate. It was a 14% increase over...

We are downgrading our recommendation on Federated Investors, Inc. (FII) to Underperform from Neutral based on expected downward pressure on assets under management (AUM), flows and margins. Regulatory backdrop, waning equity markets and sluggish global economic growth are expected to keep earnings under pressure. Federated's lowered AUM has resulted in a negative organic growth in the core business as investors are transferring cash from money market funds to higher yielding bank deposits or investments across the fixed income universe and equities. A significant reduction in money market managed assets due to changes in financial markets, including increases in interest rates over a short period of time, considerable deterioration in investor confidence, prolonged periods of historically low short-term interest rates and resulting fee waivers, could have a material adverse effect on Federated's results of operations. Federated shares currently trade at 14.7x our 2011 earnings estimate, a 7.5% discount to the industry average. Our six-month target price of $22.00 equates to about 13.5x our...

Sun Hydraulics Corp (SNHY) has been trading strong in the recently volatile market, recently rebounding from a key trend line to move back within striking distance of the 52-week high at $54.34. Estimates have since jumped higher, providing more support and momentum for this Zacks #1 Rank stock. Company Description Sun Hydraulics Corp. and its subsidiaries engage in the design and manufacture of various hydraulic valves and components worldwide. The company was founded in 1970 and has a market cap of $826 million. Industrial goods companies have been jumping higher over the last year as demand spikes on an improving global economy. That trend was on display in early May when Sun reported strong Q1 results that came in ahead of expectations. First-Quarter Results Revenue for the period was up 60% from last year to $50.7 million. Earnings also looked good, coming in at 57 cents, 24% ahead of the Zacks Consensus Estimate, its biggest surprise in the last four quarters. The company said it has...

All too often, stocks with an alluring dividend yield usually aren't able to sustain it for much longer. That doesn't seem to be the case with Triangle Capital Corporation (TCAP). The company, which pays a dividend that yields a whopping 9.4%, is growing both its top and bottom lines and is even talking about raising its dividend over the next several quarters. Valuation is attractive too, with shares trading at just 10.4x forward earnings. Earnings estimates have been soaring after the company recently delivered its 4th consecutive positive earnings surprise. It is a Zacks #2 Rank (Buy) stock. Business Development Company Triangle Capital is a business development company, or BDC, that provides capital to companies with annual revenues between $10 and $100 million. The capital provided is mostly in the form of subordinated debt, which has a lower priority than senior debt in the event of liquidity during bankruptcy. However, subordinated debt also carries higher rates of return. Triangle Capital is a Regulated Investment Company,...

Revlon, Inc. (REV) recently surged into a new multi-year high on the heels of two consecutive strong earnings surprises. This Zacks #1 rank stock also has a bullish growth projection and high industry rank of 25 out of 264. Company Description Revlon, Inc., through its subsidiary, Revlon Consumer Products Corp,, manufactures and sells cosmetics and a wide line of various beauty products. The company was founded in 1932 and has a market cap of $957 million. Revlon recently turned higher with the market, but shares also got a boost from the company's strong Q1 results from late April that came in ahead of expectations. First-Quarter Results Revenue for the period was up 9% from last year to $333 million. Earnings also came in strong at 20 cents, 33% ahead of the Zacks Consensus Estimate. From a geographic perspective, Revlon saw its biggest gain from Latin America, where sales were up an impressive 35% to $27 million. Its Europe, Middle East and Africa region saw sales increase...

Saudi Arabian Mining Company, Ma'aden and Alcoa Inc. (AA) have secured $1 billion loan from Public Investment Funds (PIF) for phase II of aluminium project in Saudi Arabia. The loan amount will finance the Ma'aden Bauxite and Alumina Company, which is owned 74.9% by Ma'aden and 25.1% by Alcoa. Ma'aden Bauxite and Alumina Company consist of a bauxite mine and an alumina refinery with an approximate cost of $3.6 billion. This is the second phase of the $10.8 billion Ma'aden-Alcoa joint venture project. The project is a part of the $10 billion Ma’aden-Alcoa joint venture project that includes the construction of an aluminium smelter and rolling mill at Ras Az Zawr. Construction work was scheduled to commence on the plant in July 2010. Ma’aden expects the smelter and rolling mill to be operational in 2013 with the mine and refinery coming on stream in 2014. Bauxite feedstock for the planned alumina refinery will be transported by rail from the new mine at Al...

The struggling mobile phone manufacturer Nokia Corp. (NOK) has decided to close its operations in Japan by August 2011. Nokia will shut down its high-end Vertu handset stores in Shibuya and Ginza districts of Tokyo by the end of 2011. Vertu is one of the premium tier mobile handset in Japan and its price is ranged from $7,450 to $248,354. Vertu handsets started struggling ever since smartphones of Apple Inc. (AAPL) and several Android-based smartphones entered the Japanese market. Nokia’s phone service in Japan currently runs on network infrastructure, which was leased from NTT DoCoMo (DCM), the largest Japanese wireless carrier. This contract will come to an end by end August 2011. Nokia has decided not to renew this deal. The Tokyo office of Nokia will remain close till end 2011 to manage post closure activities. Quitting Japan is a part of Nokia’s strategic decision to restructure its sagging mobile devices segment and regain its lost glory. Once the king of the...

AAR Corp (AIR), the provider of aircraft parts and maintenance, announced that it will release its financial results for the fourth quarter and fiscal year 2011, ended May 31, 2011, after the market closes on Wednesday, July 6, 2011. The current Zacks Consensus Estimate for earnings per share (EPS) is 45 cents, representing an annualized growth of 45.16%. With respect to earnings surprises, over the trailing four quarters, AIR outperformed the Zacks Consensus Estimate. The average earnings surprise was a positive 13.93%, implying that the company outperformed the Zacks Consensus Estimate by the same magnitude over the last four quarters. Third Quarter Highlights AAR Corp. posted encouraging results for the third quarter of fiscal year 2011. The company’s net income from continuing operations surged 74.3% to $18.3 million or 45 cents per share compared with $10.5 million or 28 cents per share earned in the prior-year quarter. Earnings per share also surpassed the Zacks Consensus Estimate of 42 cents per share. The consolidated sales in...