Zacks Analyst Blog Highlights: Electroglas, Amkor, Broadcom, VeraSun Energy and U.S. BioEnergy.

CHICAGO -- 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: Electroglas (Nasdaq: EGLS), Amkor (Nasdaq: AMKR), Broadcom (Nasdaq: BRCM), VeraSun Energy Corporation (NYSE: VSE) and U.S. BioEnergy (Nasdaq: USBE).

See the latest posts to the Analyst Blog: http://www.zacks.com/blog/post_info.html?g=6

Here are highlights from Monday's Analyst Blog:

After Results, Hold Electroglas

Electroglas (Nasdaq: EGLS) is an OEM [original equipment manufacturer] of wafer prober and wafer test handling systems. February top and bottom-line results were in-line with consensus estimates. While the long-term outlook in probers for EGLS is positive, the short-term cash burn is concerning.

The firm recently signed new volume purchase agreements with Amkor (Nasdaq: AMKR) and Broadcom (Nasdaq: BRCM). Management has embarked on a new aggressive plan to lower breakeven to $14-$15 million (from $18-$19 million). We continue to rate shares of EGLS a Hold.

On March 20, 2008, Electroglas announced results for the third quarter of fiscal year 2008 ending February 2008. The company has switched the fiscal year end from December 31 to May 31. As a result of the change, the company released results for April and May 2005 that present a bridge or stub period. While some direct performance measurement comparisons do not make sense, others such as margins are appropriate.

Revenue for the period was $11.6 million, up from $11.4 million in the November reporting period and up 17.7% year-over-year. Revenue was at the low end of management's guidance range of $11.5-$13.5 million.

VeraSun Strong in Longer Term

VeraSun Energy Corporation (NYSE: VSE) is on the fast track of growth with its imminent merger with fellow bio-fuel company U.S. BioEnergy (Nasdaq: USBE). However, the fortunes of the company were shackled by the cyclicality of the fragmented ethanol industry. It is expected that in a year, the post-merger company will become the largest bio-fuel company in the world. However, the cyclicality of the ethanol industry and rising prices of corn and natural gas, coupled with weak ethanol prices, remain a concern.

Nevertheless, recent bullishness on the energy bill for ethanol production, rising crude oil prices, ongoing capacity expansion plans and value unlocking through synergies from the impending merger with USBE should maintain the growth over the near-term. Going forward, focus on the top-line should transform the bottom-line as soon as ethanol realizations improve.

We note that in the short-term, the oversupply situation in the ethanol industry may continue to affect stock price performance. Overcapacity in the ethanol industry has put pressure on ethanol realizations as feedstock cost has risen sharply. Nevertheless, the recent energy bill, stipulating ramping up of ethanol production to 36 billion gallons per year by 2022, will significantly help VeraSun in the longer-term.

Accordingly, we maintain a Buy recommendation on VSE with a six-month target price of $8.25, representing 17.6x our current-year 2008 EPS estimate and only 13.5x our forward 2009 EPS estimate. Price appreciation to our near-term valuation target represents upside return potential of 24.4%.

Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.

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