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Advent Software, Covidien, Apple, Pandora and Google highlighted as Zacks Bull and Bear of the Day

Zacks Equity Research

For Immediate Release

Chicago, IL – June 12, 2013 – Zacks Equity Research highlights Advent Software (ADVS-Free Report) as the Bull of the Day and Covidien PLC (COV-Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on the Apple Inc (AAPL-Free Report), Pandora (P-Free Report) and Google (GOOG-Free Report).

Here is a synopsis of all five stocks:

Bull of the Day:

Advent Software (ADVS-Free Report) is a $1.7 billion leading provider of enterprise solutions for the investment management industry. Their 5,000 clients in 60 countries include all types of asset managers, broker-dealers, fund administrators, and independent advisors.


Founded in 1983, Advent was built out of a need to automate the then highly manual portfolio accounting function in the investment management business. And they were among the first to innovate cloud-based solutions for the industry.

The stock has been a Zacks Rank #1 (Strong Buy) or #2 (Buy) since mid-February when it was trading $26.

You can think of Advent as the essential technology platform for the global investment management industry, which has unique and complicated accounting, regulatory, and information reporting demands where errors with data are unacceptable in firms that must operate with perfect accountability to their clients at all levels in financial markets.

And when you think of the thousands of changing securities prices and positions a firm might have to deal with every day, you can imagine how robust and redundant the software has to be to maintain flawless reporting in real-time. One of Advent's biggest clients is the giant TIAA-CREF pension system.

Bear of the Day:

In the wake of its dismal fiscal 2013 second quarter results, analysts covering Covidien PLC (COV-Free Report), the $30 billion medical products maker, slashed earnings estimates for both this year and next by 17% each.

Not only did net income decline by 10.2% due to higher expenses, the company also warned about future investment-related expenses due to Japanese yen fluctuations that would further drag down their margins.

Plus, they are in the process of selling their Pharmaceuticals division, which is profitable and will create more uncertain expenses during the divestiture process this month.

The medical-technology excise tax of 2.3% has started to weigh on the bottom line from the second quarter of fiscal 2013. The tax will be a part of the SG&A expense and is expected to be approximately $25 million per quarter.

Moreover, increased investment-related expenses related to emerging markets growth is likely to keep margins under pressure going forward. The company's net income from continuing operations dropped 10.2% in the second quarter of fiscal 2013 due to higher expenses, which dampened solid sales growth.

Additional content:

Apple Launches iRadio, iOS 7 at WWDC

At the ongoing annual Worldwide Developers Conference, Apple Inc (AAPL-Free Report) unveiled its much anticipated music-streaming service iRadio. Apple also showcased the newly revamped iOS 7 in the ongoing conference, which has a simpler user interface and offers a lot of new features.  

The iRadio service is designed along the lines of the competing Pandora (P
-Free Report) service, which allows users to create stations based on songs of their choice (including Twitter trends) which they can also share with friends.

The service offers more than 200 free stations primarily supported by brand advertisements. However, for Apple’s existing cloud-based music service (iTunes Match) subscribers, iRadio is totally advertisement free.

Additionally, iRadio offers cross-platform features, which allow access to users of other platforms such as Pandora and Google’s (GOOG
-Free Report) All Access. Apart from close integration with iTunes, iRadio will also be available on newly launched OS X and Apple TV software.

Apple has closely integrated Siri with iRadio, which will allow users to easily navigate through songs by using voice command. Apple also introduced a number of improvements to Siri, which will now come with a new interface, new voice (both male and female options) and feature Twitter integration.

An important update to Siri is the addition of French and German language options. Apple is also planning to bring iOS into cars by the end of next of year.

Besides iOS-related updates, Apple also unveiled the new Mac OS X Mavericks, which offers significant improvement in terms of power consumption, efficiency and integration with iOS based devices. The company also introduced iWork for iCloud in the conference, which allow users to work on documents in a browser on either Mac or PC.

Apple also provided a glimpse of its upcoming desktop Mac Pro, which is a black, cylindrical device that includes 12-core Intel Xeon processors and its internal storage, is based on high speed flash memory. The device will be assembled in the United States and is expected to release later this year.

Apple launched new MacBook Airs, which promises improved battery life and supports 802.11 ac, a faster version of wi-fi. The device runs on Intel’s Haswell processor and features new Airport networking devices.

Our Take

Traditionally, Apple has used the Worldwide Developers Conference (“WWDC”) platform to launch new services, hardware products and software. Although nothing exceptional was announced this year, Apple’s entry into the Internet-radio market is worth mentioning.

In this regard, we note that Pandora ranks #3 among the top grossing apps in Apple’s App store and enjoy a first mover’s advantage in the music streaming industry. Therefore, Pandora’s already popular service (approximately 70.1 million users) driven by its effective discovery engine and well established infrastructure will provide significant competition to Apple in the near term.

Additionally, we believe that the lack of new surprises (iWear and iTV) and absence of new iPhone/iPad details has left very little to cheer about this year’s WWDC conference. We believe that the lack of new innovative products will remain an overhang on Apple’s share price in the near term.

Currently, Apple has a Zacks Rank #4 (Sell).

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