Zacks Bull and Bear of the Day Highlights: Smithfield Foods, Logitech International, Sanofi, Isis Pharmaceuticals and Aegerion Pharmaceuticals
CHICAGO, Jan. 31, 2013
CHICAGO, Jan. 31, 2013 /PRNewswire/ -- Zacks Equity Research highlights Smithfield Foods, Inc. (NYSE:SFD) as the Bull of the Day and Logitech International (Nasdaq:LOGI) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Sanofi (NYSE:SNY), IsisPharmaceuticals Inc. (Nasdaq:ISIS) and Aegerion Pharmaceuticals Inc. (Nasdaq:AEGR).
Started in 1936 as a small family owned packing plant in Smithfield, VA, Smithfield Foods, Inc. (NYSE:SFD) is now world's largest pork processor (28% market share) and hog producer (14% market share).
Smithfield Foods conducts its business through two groups, the Meat Processing Group and the Hog Production Group. Some of the popular brands include Eckrich sausage, Farmland bacon, Armour pepperoni and Healthy Ones prepared meals.
Smithfield had suffered losses in 2008 and 2009 as a result of higher grain costs and oversupply of hogs. However the company recovered nicely in fiscal 2011 and posted record high revenue in fiscal 2012.
Of late, the company has put a lot of efforts in improving the packaging and producing healthier choices for consumers using lean protein and natural ingredients. Smithfield is also increasing its focus on consumer convenience by introducing more ready-to-heat/ready-to-eat foods.
Founded in 1981, Logitech International (Nasdaq:LOGI) is a Swiss public company listed on the SIX Swiss Exchange and on the Nasdaq Global Select Market.
The company is a global leader in peripherals for personal computers and other digital platforms. Some of the company's popular products are computer mice (world's largest producer), keyboards and speakers. Other products include trackballs, interactive gaming controllers, multimedia speakers, headsets, web cameras and lap desks. The company operates through two major business segments: peripherals (86% of 2012 total revenue) and video conferencing.
LOGI released its results for the third quarter of its fiscal 2013 on January 24, 2013. Sales for the quarter were down 14% year-over-year. Net loss for quarter was $195 million ($1.24 per share) compared with net income of $55 million ($0.32 per share) in prior-year quarter. Gross margin for the quarter was 34.2%, down from 36.2% in the same quarter one year ago.
The US Food and Drug Administration (FDA) recently approved Kynamro (mipomersen sodium) injection developed by Genzyme, a Sanofi (NYSE:SNY) and IsisPharmaceuticals Inc. (Nasdaq:ISIS). Kynamro is approved for cholesterol management in patients suffering from homozygous familial hypercholesterolemia (HoFH).
The FDA's decision did not come as a surprise. In Oct 2012, the US regulatory body's Endocrinologic and Metabolic Drugs Advisory Committee had voted in favor of approving Kynamro. The approval of the drug triggers a $25 million milestone payment from Sanofi.
We note that Kynamro carries a Boxed Warning citing the risk of hepatic toxicity. Kynamro is available only through a Risk Evaluation and Mitigation Strategy (REMS) because of the risk of hepatic toxicity.
We believe this safety concern might to an extent undermine the commercial potential of the drug. Aegerion Pharmaceuticals Inc.'s (Nasdaq:AEGR) Juxtapid (lomitapide) for HoFH patients, which was recently launched, would also eat into Kynamro sales.
Meanwhile, Sanofi is working on re-examining the negative decision related to Kynamro from the advisory board of the European Medicines Agency (EMA). In Dec 2012, the Committee for Medicinal Products for Human Use (CHMP) had recommended against the approval of Kynamro.
We are encouraged with Kynamro's approval in the US which validates the antisense technology. Isis Pharma has several other candidates in the pipeline based on this technology.
Isis Pharma currently carries a Zacks Rank #3 (Hold).
Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.
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