New Century, salesforce.com, Oracle and TOTAL S.A.

Zacks Analyst Blog Highlights: New Century, salesforce.com, Oracle and TOTAL S.A.

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: New Century Financial (NYSE: NEW), salesforce.com, inc. (NYSE: CRM), Oracle (Nasdaq: ORCL) and TOTAL S.A. (NYSE: TOT).

See the latest posts to the Analyst Blog by visiting: http://at.zacks.com/?id=2673

Here are highlights from Thursday’s Analyst Blog:

Sell Shares of New Century Financial

Shares dropped over 40% after New Century Financial (NYSE: NEW) announced that it will restate 2006 earnings. Basically, the company was not correctly accounting for loans that it had to repurchase due to borrower defaults. In addition, the company has seen a marked rise in late payments and defaults. Due to much-lower-than-expected 2006 and 2007 earnings, we are downgrading NEW to Sell. While the company is now trading at a significant discount to book value, it appears that the operating environment will continue to get worse for companies that focus on sub-prime home loans. We will update our recommendation when the company releases restated numbers in early March.

Keep Buying salesforce.com Shares

salesforce.com, inc. (NYSE: CRM) is the market leader in the on-demand CRM [customer relationship management] space and continues to see substantial subscriber and customer growth. Although the stock has been volatile, we believe over the long-term, CRM will continue to lead the potentially huge market for on-demand software. We therefore reiterate our Buy recommendation on the shares of salesforce.com with a price target of $57.00.

The on-demand application services market is expected to grow at a CAGR [compound annual growth rate] of 41% (according to IDC [a premier tech research firm]) due to the emergence of the Internet and the inherent weaknesses of traditional (on-premise) CRM software. salesforce.com holds the leading position in CRM and has leveraged this position into other hosted applications with its AppExchange, helping it drive increased revenue from its customer base. salesforce.com’s financial and operating metrics are showing torrid growth, with an impressive organic top-line CAGR of over 61% in fiscal 2007.

Subscriber growth continues to grow at rapid levels, including over 45% during fiscal 2006, as it signs increasingly large deals. The company now has 44 customers at over 1,000 users and one with over 25,000 users. Customer and subscriber growth have accelerated at tremendous rates, and we believe that CRM has benefited from disruptions caused by the acquisition of Siebel Systems by Oracle (Nasdaq: ORCL).

TOTAL Has Many Things to Like

We continue to like TOTAL S.A. (NYSE: TOT) for its positive production-growth profile, attractive returns and an improving outlook for the refining and chemical businesses. We also like the company’s active share buyback program and the 16% increase in the interim dividend. Although growth in production is still lower than its peers, we expect momentum to accelerate in the coming quarters.

TOTAL has one of the best production-growth profiles among the oil majors, characterized by an upstream portfolio having above industry-average exposure to faster growing hydrocarbon producing regions of the world. While most of its peers are going through the painful process of reducing their exposures to the maturing North American and North Sea regions, TOTAL is advantageously positioned on this front. With only about a third of its current volumes coming from these regions, compared to the peer group median of about one-half, TOTAL’s upstream assets have lower natural decline rates and longer productive lives.

See the latest posts to the Analyst Blog by visiting http://at.zacks.com/?id=2645

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