Jefferies Loving the Retail Sector

A retail analyst over at Jefferies & Co. has raised his ratings on several large retailing stocks this morning.

The analyst is upgrading shares of Costco ( COST), Home Depot ( HD) and Lowes ( LOW), believing the names are likely near the trough of the cycle. Best Buy ( BBY), Kohl's ( KSS) and Target ( TGT) were also raised to a buy rating, from what was previously a hold rating.

The call is a bit of a contrary one, but actually quite timely, it appears. All the names have been beaten up pretty badly and may make sense for a short-term play. We are still concerned about the credit that is contracting as far as credit card companies and banks are concerned. At the end of the day, that can be a factor that will be hard for retailers to overcome.

None of the stocks mentioned above are currently on our "Recommended" list.

FactSet Research Shares Rally on Second-Quarter Results

Shares of Factset Research Systems ( FDS) are up more than 4% in early trading today, after the company reported second-quarter profit jumped 20% to $34.6 million, or 71 cents a share, compared to $29 million, or 59 cents in the year-ago period.

The company said sales gained 12% to $157 million. For the next quarter, revenue is expected to range between $153 million and $157 million. EPS is expected to be between 72 cents and 74 cents. This guidance represents a double-digit percentage increase in EPS at all points in the range and includes 3 cents dilution from FactSet Fundamentals.

We removed shares of FactSet back on June 27, when the stock was trading at $57.61. The company has a dividend yield of 1.85%, based on last night's closing stock price of $38.97. The company has technical support in the $32 to $34 price area. If the shares can continue today's momentum, we see overhead resistance around the $45 to $46 price range. We would remain on the sidelines for now.

Factset Research Systems is not recommended at this time, holding a Dividend.com Rating of 3.1 out of 5 stars.

Cephalon Shares Up More Than 6% on Positive Study Results

Shares of biopharmaceutical company Cephalon ( CEPH) jumped more than 7% in late morning trading Tuesday, after the company released positive study results involving its newest bipolar treatment drug, Nuvigil.

The Frazer, Pa.-based company recently completed second-stage testing of the drug on patients with bipolar disorder. Nuvigil is currently approved to treat narcolepsy, but recent test results showed that it could be effective in treating depression as well.

Cephalon said that patients who took Nuvigil, along with mood stabilizers, during the course of an eight-week study period, showed improvement in their depression symptoms. Side effects were consistent with patients taking a placebo.

The drug will now enter more large-scale late-stage trial testing, in order to further ascertain its effectiveness is treating bipolar disorder.

Cephalon shares were up $4.32, or 6.8%, in early afternoon trading Tuesday.

Shares of Cephalon are 20% off all-time highs of $83 a share hit in May 2007. The stock has technical support in the $57 to $60 price range. If that fails to hold, we could see a drop to the $40 mark. If the shares can continue to gain momentum on today's news, we see overhead resistance around the $72 area, followed by the $80 to $83 mark. We do not currently rate this non-dividend paying stock, but do follow the stock and biotech sector closely.

Cephalon does not currently pay a dividend.

Sina's Fourth-Quarter Profit Beats View, but Sales Forecast Weaker Than Expected

Chinese online media company SINA ( SINA) issued a mixed earnings report Monday, which sent its shares plunging after hours, but much of the stock's losses were pared.

The Shanghai-based company, which provides Chinese-language online content in the form of news, games and shopping, reported fiscal fourth-quarter net income of $25.6 million, or 42 cents per share, compared with $17.5 million, or 29 cents per share, in the year-ago period.

Excluding one-time charges, Sina posted adjusted earnings of 49 cents a share, which beat Wall Street expectations of 45 cents per share.

Sales for the quarter were $101.5 million, up 44% from the year-ago period, while advertising revenue jumped 39% to $69.5 million, albeit lower than the third quarter's total of $76.2 million.

Sina forecast much lower-than-expected fiscal first-quarter sales, saying it expects sales of between $73 million and $77 million, well below analyst estimates of $89 million. This announcement sent the company's stock reeling more than 9% in after hours trading Monday, but much of these losses were pared by Tuesday afternoon.

Shares of Sina are way off of all-time highs of $58, set in October 2007. The stock has technical support in the $17 area. If that level fails to hold, we could see the $10 to $11 mark. If the shares can gain some momentum on today's strength, we see overhead resistance around the $25 to $26 area. We do not currently rate this non-dividend paying stock, but do follow this China Internet play closely.

Sina does not currently pay a dividend.

Be sure to visit our complete recommended list of the Best Dividend Stocks as well as a detailed explanation of our ratings system.
At the time of publication, the author had no positions in stocks mentioned, although positions may change at any time.

Tom Reese and Paul Rubillo are senior editors of Dividend.com. Visit Dividend.com for more dividend stock ratings, picks, news, and analysis for long-term and income-seeking investors.