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: Trident Microsystems, Inc. (NASDAQ: TRID), Sony (NYSE: SNE), American Axle & Manufacturing Holdings Inc (NYSE: AXL), D.R. Horton, Inc. (NYSE: DHI) and Cache, Inc. (NASDAQ: CACH).
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Here are highlights from Wednesday’s Analyst Blog:
Trident Micro Pressured in Asia
Trident Microsystems, Inc. (NASDAQ: TRID) is a leader in integrated circuits for Digital Television. While its products are used in all kinds of displays, LCD television is its most important growth market as LCD televisions take share from plasma in the market for larger screens as well as traditional CRT television sets of all sizes.
Trident has secured important design wins with a number of leading manufacturers of LCD televisions, including Sony (NYSE: SNE), and Sharp. The company reported fourth quarter results. Revenue was in line with our expectations. However, GAAP operating expenses were much higher than expected.
American Axle Driven to Cut Costs
On July 25, American Axle & Manufacturing Holdings Inc. (NYSE: AXL) reported a net loss of $12.49 per share compared to a net profit of $0.66 per share in the second quarter of 2007. The company’s focus on diversification and geographical expansion is helping it to grow.
AXL’s recent backlog of new and incremental business, to be launched through 2009 to 2013, is $1.4 billion in future annual sales. About 85% of which has been sourced to AXL’s non-US facilities. Following the new labor agreement with United Auto Workers (UAW), the company expects to achieve annual savings in excess of $350 million.
D.R. Horton Concerns Continue
We expect D.R. Horton, Inc. (NYSE: DHI) to report a loss of $0.92 per share in the third quarter, compared to earnings of $0.35 per share in the prior year period. This is due to weaker margins as well as charges for inventory impairments and write-offs of deposits related to land option contracts.
Year-to-date, the company has been successful in generating cash flow, lowering land lots owned and optioned and cutting the number of homes in inventory. Also, the company announced that it would cut the quarterly dividend by half to $0.075 per share in an effort to preserve $94.5 million in annual capital. For the remainder of FY08, we expect gross margin pressure to continue from weaker average selling prices and increased incentive use. Our target price is $11.50.
Cache Share Price Reflects Ups
Cache, Inc. (NASDAQ: CACH) continues to perform well in the difficult macro environment that has created headwinds that are negatively affecting the consumer. These headwinds include falling house prices, record levels of debt, and rising food and energy prices, which will continue to offset the strength in the company’s core Cache store concept, its direct sourcing efforts, and its solid balance sheet. We reiterate our Hold rating.
The company’s choice to close its poorly performing Lillie Rubin stores was a smart strategic decision that should lead to better results in future quarters. The acquisition of its largest supplier Adrienne Victoria Designs will help the company improve its direct sourcing efforts and expand its merchandising efforts.
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