Tuesday Equity Ideas: ERES, SIRI, MER

eResearch Technology Inc. (ERES) – the cardiac services provider got the steam taken out of it on Jul. 16 on an analyst downgrade from Leerink Swann. The rating and price target was cut because of concerns that the FDA could approve automated trial studies that could pressure pricing. Management will need to address this during the second quarter conference call on Aug. 4, but with that news and the recent stock decline aside, the outlook can’t be too bad. According to a filing with the Securities and Exchange Commission, the company leased new office space of approximately 59,400 square feet compared to the current offices of 40,000 square feet.

Sirius Satellite Radio Inc. (SIRI) – this is a bottom fishing stock at $1.60. Though there is an equity offering of $375 million in common stock on the table, the FCC approved the merger deal with XM Satellite, second quarter results were decent and a Citi analyst is out with a note this morning talking up the synergies of the deal.

Merrill Lynch & Co. Inc. (MER) – selling $8.5 billion in common stock with Temasek holdings, Singapore’s sovereign wealth fund, buying $3.4 billion worth of new stock. Surprisingly, Merrill is holding up awfully well on the announcement, perhaps because it’s already down from last Thursday’s high of $34.10, and Oppenheimer Meredith Whitney made what could be construed as a positive comment – that Merrill shares are getting close to fair value. This is your financial contrarian trade.