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The Zacks Analyst Blog Highlights: Arris Enterprises, Cisco Systems, Google, Comcast and Portfolio Recovery Associates

CHICAGO, Dec. 31, 2013 /PRNewswire/ -- 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 the Arris Enterprises Inc. (Nasdaq:ARRS-Free Report), Cisco Systems Inc. (Nasdaq:CSCO-Free Report), Google Inc. (Nasdaq:GOOG-Free Report), Comcast Corp. (Nasdaq:CMCSA-Free Report) and Portfolio Recovery Associates Inc. (Nasdaq:PRAA-Free Report).

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Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

Here are highlights from Monday's Analyst Blog:

Arris Leads Video Client Segment

A recent report of Synergy Research Group Inc. stated that Arris Enterprises Inc. (Nasdaq:ARRS-Free Report) was the leading operator in the video client segment in the third quarter of 2013.

However, Cisco Systems Inc. (Nasdaq:CSCO-Free Report) remains the undisputed leader in the overall video infrastructure gear manufacturing industry. Nevertheless, Arris is far ahead of Cisco and Pace plc., particularly in the video client delivery segment.

The video client delivery segment consists of several hardwares and softwares related to set-top boxes and home media gateways. Additionally, Arris has remarkably improved its position in the video content management segment also. Arris currently has a Zacks Rank #1 (Strong Buy).

The acquisition of the home businesses of Motorola Mobility, a division of Google Inc. (Nasdaq:GOOG-Free Report), has helped Arris to attain a strong foothold in the high-speed video offerings and Internet delivery markets. The merged entity has a global presence with more than 500 customers in 70 countries. Further, this deal will strengthen Arris' patent portfolio and provide a license to access several patents of Motorola Mobility.

With Motorola Mobility's Cable Home business in its kitty, Arris is likely to become a formidable player in the video infrastructure and customer premises equipment for the cable TV industry.

Comcast Corp. (Nasdaq:CMCSA-Free Report), the largest cable TV operator in the U.S., has launched Arris' XG1 gateway for its next-generation X1 TV service. The XG1 gateway offers several utilities to X1 customers, including intuitive search, voice control, multi-screen facility and improved DVR experience.

Comcast is also deploying the E6000 Converged Edged Router of Arris, which will act as a powerful C4 cable modem termination system and can be converted into a Converged Cable Access Platform.

Portfolio Recovery Remains at Outperform

We have retained our Outperform recommendation on Portfolio Recovery Associates Inc. (Nasdaq:PRAA-Free Report) following better-than-expected third-quarter results.

Why the Reiteration?

Portfolio Recovery delivered a positive earnings surprise in the last four quarters, with an average beat of 11.4%. In the last reported quarter, earnings per share came in at $1.02, beating the Zacks Consensus Estimate of 88 cents. Earnings also increased 56.9% year over year. Earnings were primarily driven by a surge in revenues, which was attributable to the continuous improvement in income from finance receivables. Renewed emphasis on the fee-for-service businesses also aided the third-quarter upside.

This stock with a Zacks Rank #2 (Buy) remains a strong player in the market, with a focus on quality and profitability rather than pure volume growth. The fee-for-service business has also improved since the acquisition of Mackenzie Hall Holdings Ltd. in Jan 2012. Portfolio Recovery also exceeded its return on equity (ROE) target of 20% by generating an average of 22.4% for the first nine months of 2013 against 19.2% in the year-ago period. Moreover, both cash collections and collector productivity (cash collections per hour paid) continue to be at record highs as efficiency improves at the Portfolio Recovery's operating call centers and the company continues to hire new collectors. The surge in cash collections is expected to continue to drive revenues impacting margin expansion favorably.

Over the last 60 days, most of the estimates moved north, pulling up the Zacks Consensus Estimate for 2013 by 2.4% to $3.45 per share. This also represents a year-over-year improvement of 40.1%. Over the same period, the Zacks Consensus Estimate for 2014 increased 1% to $3.89 per share, reflecting a year-over-year improvement of 12.87%.

However, intense competition, escalating operating expenses and interest expense might weigh on the positives of Portfolio Recovery to some extent.

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

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