Benzinga's Morning Downgrade Summary for May 30, 2012
Listed below are today's Top Downgrades at Benzinga:
Deutsche Bank said, "Market concerns that FRO would be seriously weakened to the benefit of Frontline 2012 (FRTN.NWTC; NR, NOK24.00) after the December 2011 restructuring of FRO, appear to be confirmed. In Q1, FRO had to give up $15 million of earnings upside to its charterors (lessor of ships to FRO) as a cash sweep post-restructuring. Further, John Fredriksen, FRO's Chairman, has decided to sell his privately held sixteen crude and product tanker newbuilding order to Frontline 2012, while FRO's fleet continues to age. Given the lowerquality fleet, limited earnings upside and negative NAV we are downgrading FRO to SELL from Hold."
FBN Securities said in the report, "MHO has risen 105.6% since our upgrade to Outperform on August 9th, 2011. We view the shares as fully valued trading at 14.4x our 2013 Adjusted EPS estimate of $1.15. In addition, MHO trades at a 13% premium to its Adjusted Book Value of $14.62/share (using 75% value for Tax Assets off Balance Sheet) versus a significant discount for a majority of the last 9 months. MHO was our last rated Homebuilder with an Outperform rating. Since besting the average 13 builders under our coverage by roughly 29% YTD, MHO has fallen back to rank near higher rated competitors Ryland (RYL, $23.10, Sector Perform) and D.R. Horton (DHI, $17.24, Sector Perform) in our Homebuilder Model. Although we are lowering MHO to Sector Perform, shares remain appealing on the long side of pair trades within the sector in our opinion."
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