The Zacks Analyst Blog Highlights: Ruby Tuesday, Darden Restaurants, Brinker International, General Motors and Ace

 The Zacks Analyst Blog Highlights: Ruby Tuesday, Darden Restaurants, Brinker
                    International, General Motors and Ace

PR Newswire

CHICAGO, Nov. 27, 2012

CHICAGO, Nov. 27, 2012 /PRNewswire/ 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 Ruby Tuesday Inc. (NYSE:RT),
Darden Restaurants Inc. (NYSE:DRI), Brinker International Inc. (NYSE:EAT),
General Motors Co. (NYSE:GM) and Ace Ltd. (NYSE:ACE).


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Here are highlights from Monday's Analyst Blog:

Ruby Tuesday Hires CEO from Darden

Ruby Tuesday Inc.'s (NYSE:RT) search for a competent chief executive officer
(CEO) has finally come to an end. Recently, the company revealed that it has
appointed JJ Buettgen for the position of CEO and president, effective
December 1, 2012. Moreover, Mathew Drapkin, previously the Lead Director, has
now been assigned as Chairman of the Board.

The management churn came in the wake of the founder, chairman, president and
CEO Sandy Beall's resignation in June this year. Since then, Knoxville,
Tennessee-based Ruby Tuesday was on an extensive lookout for a suitable
replacement. During this session of leadership changes, Beall continued to
assume all three aforesaid positions to ensure a smooth transition.

Sandy Beall is retiring after running the Tennessee-based company for 40
years. Under his leadership, the company achieved new heights in terms of
overall performance and profitability, implementation of strategies, and
organic as well as inorganic expansion. He opened the first Ruby Tuesday
outlet in Knoxville, Tennessee in the year 1972.

The newly appointed CEO has donned many important roles in his illustrious
career. Before signing in for Ruby Tuesday, Buettgen held the posts of senior
vice president and chief marketing officer at Darden Restaurants Inc.
(NYSE:DRI) – a renowned full-service restaurant operating company with a
multi-brand portfolio of more than 2,000 casual dining eateries and combined
revenues of more than $2,000 million.

Prior to that, Buettgen worked as senior vice president of business
development for Darden and as president for Smokey Bones Barbeque & Grill.
Buettgen was also associated with the companies like Disneyland Resorts and
Brinker International Inc. (NYSE:EAT), among othersin his 20-year career.

With his vast know-how in the restaurant and consumer industries, Buettgen can
easily be tagged as a veteran in these sectors. Furthermore, with his affluent
knowledge in business development and brand building, we expect him to provide
meaningful support to Ruby Tuesday.

While we prefer the company's future strategies including improving margins by
lowering costs, driving same-restaurant sales through several value offerings,
focusing on low capital growth opportunities and returning excess cash to
shareholders, its failure to meet the Zacks Consensus Estimates in the first
quarter of 2013 concerns us a bit. In addition, the company's sales growth has
also been sluggish and needs further impetus to surge ahead.

Hence, the new role for Buettgen invests him with additional responsibility in
a sluggish business environment. Ruby Tuesday currently retains a Zacks #2
Rank, implying a short-term 'Buy' rating on the stock. We are also maintaining
our long-term 'Neutral' recommendation on the stock.

GM to Acquire Ally's non-US Assets

General Motors Co. (NYSE:GM) set to expand its geographical presence in a
strategic deal with Ally Financial Inc., whereby the former will buy all of
the latter's auto-finance business operations in Latin America and Europe
along with a 40% stake in China.

The hefty deal is valued at $4.2 billion, a premium of $550 million to the
tangible book value of $3.7 billion. Subject to regulatory approval and other
customary conditions, the deal is expected to culminate in phases in 2013.

Ally Financial has been facing the brunt of the economic turmoil, as a result
of which it is 74% owned by the US government and is indebted to it by $17.2
billion. Hence, the company had disclosed its intention of divesting two-third
of its business in May this year in order to shore up its repayment process.
However, the decision to abandon its China operations has been taken later.

Additionally, Ally Financial has agreed to sell its Canadian unit to Royal
Bank of Canada for $4.1 billion in cash. It also inked a deal with Ace Ltd.
(NYSE:ACE) to sell its Mexican insurance business for $865 million.
Nevertheless, all the deals have been valued at a substantial premium, which
again justifies the company's divestments.

On the other hand, the current deal suits General Motors' plan of
international expansion. Currently, North America has been the company's
primary revenue generating zone, while the new locations added by this
purchase will cover 80% of the company's revenue from global markets. The
addition of Ally Financial's assets will not only help General Motor to
diversify into international markets, but will also boost its competitive and
operating leverage, thereby helping the company regain its historical superior
position. The acquisition will also improve General Motors' own financing arm,
balancing it well with external bank partners.

The new acquisitions are also part of General Motors' long-term growth
strategy of focusing on emerging markets, particularly Brazil, China and
India, to recoup its global sales by increasing its capacity investment to
meet growing demand. Now that the worse is behind, based on stable
macroeconomic conditions and pent-up demand in the automotive sector, General
Motors expects to launch 23 new vehicles in Europe along with more products in
its global markets.

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