Zacks Bull and Bear of the Day Highlights: ASML Holding, Gander Mountain, Montpelier Re and S1 Corp.

CHICAGO -- Zacks Equity Research highlights ASML Holding N.V. (Nasdaq: ASML) as the Bull of the Day and Gander Mountain Company (Nasdaq: GMTN) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Montpelier Re (NYSE: MRH) and S1 Corp. (Nasdaq: SONE). Full analysis of all four stocks is available at http://at.zacks.com/?id=2676.

Here is a synopsis of all four stocks:

Bull of the Day:

Our Bull of the Day recommendation is for ASML Holding N.V. (Nasdaq: ASML). ASML is the largest OEM of advanced photolithography systems used within the semiconductor manufacturing industry. June quarter revenue and EPS beat consensus estimates handily. ASML saw a 50% surge in orders in the June quarter. Going forward we expect revenue to be flat and orders to fall in the September quarter from very high levels. The company has the leading position in the next generation immersion lithography tools, which will lead to long-term growth.

Bear of the Day:

Our Bear of the Day recommendation is for Gander Mountain Company (Nasdaq: GMTN). Gander Mountain operates 100 stores that it believes makes it the largest retailer that specializes in hunting, fishing, camping, marine, and outdoor equipment. The company is benefiting from Wal-Mart's exit from firearms, initially 1000 of their 3000 stores. Unfortunately, GMTN suffers from negative comps, negative cash flow (in part due to slow inventory turns) and high debt levels (especially if one capitalizes the cost of the operating leases). We are thus downgrading Gander Mountain's rating to Sell.

Analyst Blog:

After raising capital to replenish reserve additions and declining some renewal business, Montpelier Re (NYSE: MRH) is poised to benefit from exponentially rising prices in the property catastrophe reinsurance market (property greater than 75% of MRH's premiums). Moreover, after losing three-quarters of its equity in the 2005 hurricanes, MRH significantly adjusted its risk profile to reduce its exposure to extremely large losses per dollar of capital, while targeting the same ROE (15%). Our $19 price target incorporates a flat P/B multiple of 1.34, off from 1.5 pre-Katrina. We think there is potential upside to our 2007 EPS estimates and stock price forecast if MRH succeeds in growing its business on the strength of rising prices, while capping severe losses.

In Q2, overall revenue for S1 Corp. (Nasdaq: SONE) was $46.7 million, up 8% sequentially. On a GAAP basis, earnings per share from continuing operations reached $(0.02). On a pro forma basis, earnings per share was at breakeven. Gross margins continue to rise sequentially. Moreover, the company recently announced that it had sold its FRS division. This sale allows management to focus on its front-end banking solutions. Although these developments are positive, we need to see more evidence of a turnaround before upgrading the stock. We maintain our Hold rating and have set a target price of $5.

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

About the Bull and Bear of the Day

Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.

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