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: Corel Corporation (Nasdaq: CREL), Alexion Pharmaceuticals (Nasdaq: ALXN), Proctor & Gamble (NYSE: PG), Lexicon Pharmaceuticals Inc. (Nasdaq: LXRX) and American Public Education, Inc. (Nasdaq: APEI).
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Here are highlights from Tuesday’s Analyst Blog:
Buyout Offer Key for Corel Shares
After approximately a three-year stint as a privately held company, Corel Corporation (Nasdaq: CREL) has emerged as a much stronger and more profitable entity. With the 2007 integration of InterVideo and Ulead complete, CREL is leveraging new products across its sales and distribution network.
Although the stock is inexpensive, acquisitions add a degree of risk and further acquisitions are unlikely, given its low equity valuation and high level of debt. CREL has hired Genuity Capital to advise it on a proposal by Vector Capital to buy its remaining outstanding shares for $11, which we don’t expect it to take. We maintain a Hold rating on the shares with a six-month price target of $11.50.
Soliris the "Go-To" Drug for ALXN
The launch of Alexion Pharmaceuticals' (Nasdaq: ALXN) genetic disorder drug Soliris in Australia and Japan in 2009, coupled with the drug's approval in one or more multiple rare blood disorders, should fuel future top-line growth. Additionally, lower cost of goods sold will provide bottom-line growth. However, with no other candidate in clinical development, we maintain our Hold rating on the stock.
Soliris is the only approved product for the treatment of Paroxysmal Nocturnal Hemoglobinuria (PNH), and we estimate peak sales for the drug in excess of $1 billion. The tremendous revenue potential is sufficient to drive a company of Alexion's size to strong probability. One problem which Alexion is struggling with at the moment is the lack of any pipeline products. The company suffered a major blow when Proctor & Gamble (NYSE: PG) terminated the commercialization and development agreement for its phase III candidate, pexelizumab.
Buy Lexicon's "Gene Knockout"
We are pleased with the progress made by Lexicon Pharmaceuticals Inc. (Nasdaq: LXRX) with its gene knockout technology and its 10TO10 clinical program. The company has four candidates in clinical studies and its cash position is relatively strong. We maintain our Buy rating.
Lexicon’s gene knockout technology has not only provided the company with the opportunity to identify drug targets for further research and development, but has also helped in attracting new partners. Going forward, we expect the company to enter into additional alliances and currently model total revenue of $37.3 million for 2008.
American Public Still a Newbie
American Public Education, Inc. (Nasdaq: APEI) has a unique franchise of providing online education to the military, public service, and civilian markets.
Revenues have grown at a 45% five year compound annual growth rate (CAGR) and revenue growth accelerated to a 73% rate in 2007 with the certification to participate in federal student aid programs under Title IV with classes that began in late 2006. If the company fails to achieve a similar growth rate in the future, the stock’s price may decline dramatically.
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