Tag Archives: Forbes Best Ideas

News, Politics, Government

High Premiums Put Amerisafe In Safe Territory

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By Zacks.com, Contributor

Amerisafe (AMSF), a provider of Workers’ Comp Insurance focused on small- to mid-sized employers in hazardous industries, delivered strong fourth quarter results on February 27, driven by a big increase in net premiums earned. Earnings per share for the quarter beat the Zacks Consensus Estimate by 25%, prompting analysts to revise their estimates significantly higher for both 2013 and 2014. It is a Zacks Rank #1 (Strong Buy) stock. Although shares of Amerisafe have risen sharply since the fourth quarter beat, the valuation picture still looks reasonable, leaving the stock with plenty of room to run higher. Amerisafe delivered better-than-expected fourth quarter results on February 27. The company reported adjusted earnings per share of 49 cents, beating the Zacks Consensus Estimate by 10 cents. It was a whopping 53% increase over the same quarter in 2011. Special Offer: This special report zeroes in on some huge money-making opportunities as well as some urgent sell alerts that could save you from devastating losses in the year ahead. Get nearly 100 buy and sell calls from almost four dozen of the world’s most successful investing experts all in one place in Forbes’ Best Ideas for 2013. Net premiums earned jumped 19% year-over-year to $78.741 million while the pre-tax underwriting profit increased by 434% to $5.832 million. President and Chief Operating Officer Geoff Banta noted that AMSF “experienced another quarter of premium growth with stronger pricing, while maintaining [its] healthy policy retention levels. Additionally, [its] claims frequency for the 2012 accident year continued its downward trend and prior accident years developed favorably.” For the quarter, return on average equity was 9.8% while book value per share increased 9% to $20.88. Since AMSF reported its fourth quarter results back in late February, analysts have revised their estimates for both 2013 and 2014 significantly higher. This has sent the stock to a Zacks Rank #1 (Strong Buy). Over the last 60 days, the 2013 Zacks Consensus Estimate has jumped from $1.84 to $2.08. This represents growth of 40% over 2012 EPS. The 2014 consensus has risen from $2.10 to $2.38 over the same period, corresponding with 14% annual EPS growth. You can see this dramatic jump in the company’s ‘Price & Consensus’ chart: Although shares of Amerisafe have jumped more than 17% since the fourth quarter report, valuation still looks reasonable with shares trading at just 1.6x book value. The stock also trades at 16x 12-month forward earnings, which is a premium to its peers. But given its above-average growth prospects, this premium seems justified. With rapidly rising estimates, strong growth projects and reasonable valuation, AMSF offers investors attractive upside potential. Todd Bunton is the growth & income stock strategist for Zacks Investment Research and editor of the Income Plus Investor service.

Source: FULL ARTICLE at Forbes Latest

News, Politics, Government

Apollo Delivers High Yields With Chunky Dividends, Attractive Valuations

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By Zacks.com, Contributor

Ready to plunk down some money with a private equity firm? If you are an accredited high net worth investor with at least $1 million to risk with the firm on whatever their latest deal is, you have many quality outfits to choose from. But if you’re not in “the 1%,” there is another path. Many private equity (PE) firms are also public companies, including Blackstone Group (BX) and the infamous KKR. As an industry group, together with traditional investment management firms like BlackRock (BLK) and Franklin Resources (BEN), the PE “alternative” asset managers currently rank in the top 10% of Zacks Industries. Today we are going to focus on the remarkable Apollo Global Management, L.P. (APO) , a $3 billion company that grew its total assets under management (AUM) in 2012 from $75 billion to $113 billion. What’s so remarkable about Apollo? Three things stand out right away. 1) Earnings Surprise After Surprise Apollo operates in three business segments: private equity, capital markets and real estate. It raises, invests and manages funds on behalf of pension and endowment funds, as well as other institutional and individual investors. After a rough year following its March 2011 IPO, the firm started firing on all rockets, boosting fourth-quarter GAAP earnings an astronomical 1,564% higher than a year earlier. This represented a 120% surprise over analyst expectations. And it gets better: for the last four quarters, Apollo has beat consensus EPS estimates by an average of 99%. Granted, PE earnings can be volatile as big investments and turnarounds can take many quarters to develop leaving dry patches in between. But if it’s one thing Apollo has shown consistently in the past year it is its ability to deliver new profits from its investing harvests as it continues to find attractive deal values. And this explains the 60% rise in share price in the past six months. Special Offer: This special report zeroes in on some huge money-making opportunities as well as some urgent sell alerts that could save you from devastating losses in the year ahead. Get nearly 100 buy and sell calls from almost four dozen of the world’s most successful investing experts all in one place in Forbes’ Best Ideas for 2013. 2) A Valuation to Envy Below is a timeline of annual earnings estimates plotted against price since the firm’s IPO. 2013 estimates are clearly going in the right direction–up and to the right–with first quarter results due next month lifted from $0.71 to $1.18 since its fourth quarter report in February.   …read more

Source: FULL ARTICLE at Forbes Latest

News, Politics, Government

Olive Garden, Red Lobster Still Looking To Turn Things Around

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By Zacks.com, Contributor

Have you eaten at an Olive Garden lately? Fewer people are. Darden Restaurants (DRI) has been struggling to turn around its flagship Italian restaurant chain while sales are also down at its Red Lobster and LongHorn Steakhouse chains. Earnings are expected to slide 12.1% in fiscal 2013 while it attempts to right the ship. Darden operates 2,000 of the most recognizable casual dining restaurants in the United States, including Olive Garden, Red Lobster, LongHorn Steakhouse, Bahama Breeze and the Capital Grille. Olive Garden, its flagship restaurant, hit a rough patch in recent years as a stale menu and higher prices turned consumers off. The company has been forthright in acknowledging the problems, though, and is making changes, including remodeling old restaurants and offering new menu items. Although, the changes won’t come soon enough to save this fiscal year. In February 2013, Darden shocked analysts with a bearish outlook for its fiscal third quarter. It projected same store sales down 4.6% with all three of its main restaurant brands getting hit hard. It also offered third quarter EPS guidance between $1.00 and $1.02, which was much lower than the Zacks Consensus Estimate of $1.13. In response, all the analysts cut their estimates for the quarter and the full fiscal year. The Zacks Consensus for Fiscal 2013 has fallen to $3.15 from $3.37 since the announcement. Special Offer: This special report zeroes in on some huge money-making opportunities as well as some urgent sell alerts that could save you from devastating losses in the year ahead. Get nearly 100 buy and sell calls from almost four dozen of the world’s most successful investing experts in Forbes’ Best Ideas for 2013. Not surprisingly, given the cuts on the estimates from the analysts, the Zacks Rank also fell to a Zacks Rank #5 (Strong Sell). Fiscal Third Quarter Results In Line On March 22, Darden released the actual third quarter results. Same store sales did decline 4.6%, which was the preliminary forecast in February. Some of the individual chains performed a bit better than expected, however. Red Lobster same store sales were down 6.6% but Darden had pre-announced them as declining 7%. Olive Garden, though, fell slightly more than expected at a decline of 4.1% compared to the 4.0% forecast. Darden made on the high end of its quarterly guidance range of $1.00 to $1.02, as it posted $1.02 in the quarter. Darden re-confirmed the full year guidance between $3.06 and $3.22. The company said it was seeing traffic improvement in the fiscal fourth quarter due to new menu categories at the Olive Garden like the lighter Italian fare menu. Consumers want to eat healthier and cheaper. Items under $15 are also selling better at the Red Lobster. Darden is also targeting the lunch crowd at both Olive Garden and Red Lobster, thinking that it was an untapped market. It is rolling out new menu options specifically for this market segment. Darden is a turnaround story but the earnings just aren’t there yet. Check out …read more
Source: FULL ARTICLE at Forbes Latest

News, Politics, Government

New Web Initiatives And More Stores Has Cabela's Targeting Double Digit Growth

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By Zacks.com, Contributor

Cabela’s (CAB) surprised Wall Street recently when it announced first quarter EPS guidance that blew away the Zacks Consensus Estimate as growth remained strong across most of its product categories. This Zacks Rank #2 (Buy) is expected to post another year of double digit earnings growth in 2013. Cabela’s is more than just a retailer that sells hunting, fishing, and camping merchandise. It only has 35 stores in the U.S. and Canada but customers have been known to drive vast distances to go to a store. The larger legacy stores are built like large log cabins and have unique features such as in-house restaurants–some which serve wild boar–trophy animal mounts displayed on indoor mountains, and big aquariums filled with fish. You don’t just go to Cabela’s to shop. You go there for the experience. When a new store opens, it’s a big event. It’s not unusual to see 10,000 to 15,000 people show up at a grand opening. Special Offer: Zero in on some money-making opportunities as well as some urgent sell alerts that could save you from devastating losses. Get nearly 100 buy and sell calls from almost four dozen of the world’s most successful investing experts all in one place in Forbes’ Best Ideas for 2013. The Web Experience To Improve Cabela’s e-commerce and catalog business has been struggling in recent years but the last two quarters has seen a turnaround. While half of the recent direct sales growth came from ammunition sales, women’s and children’s apparel also saw strong sales so it’s not all guns and ammunition. Cabela’s is focusing on bringing the store experience to customers that don’t have one nearby and aren’t willing to drive to one. It has a bunch of initiatives to improve its online experience, which it will start instituting this year. Cabela’s foresees itself rolling out 10 to 12 new stores a year and is focusing on opening stores where online sales and catalog orders are the strongest. That’s why it will be opening its first store in the Southeast in South Carolina and its first in Alaska in 2014. New First Quarter Guidance Blows Away the Zacks Consensus But it was the company’s new first quarter guidance, issued on Mar 12, that really got the analysts excited about 2013. Ahead of an analyst meeting, Cabela’s said that the strong growth trends it saw in the fourth quarter had continued into 2013. It expected first quarter earnings to be 10 to 15 cents above the analysts’ consensus estimates. Not surprisingly, in the week since the new guidance was issued, four estimates have been revised higher for the first quarter. That has pushed the Zacks Consensus up to 52 cents from 45 cents before the announcement. The analysts have also been raising their full year estimates to reflect the new optimism. Six estimates were raised in the prior seven days, which pushed the Zacks Consensus up to $3.24 from $3.09. That is earnings growth of 14.8%. Cabela’s has seen double digit earnings growth …read more
Source: FULL ARTICLE at Forbes Latest

News, Politics, Government

Freeport McRoran Gets The Shaft As Global Economy Goes South

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By Zacks.com, Contributor

As gold continues to test the lower bounds of its 18-month support line above $1,500, the miners keep sliding down the shaft even faster. Copper king Freeport-McMoRan Copper & Gold (FCX) is hardly immune, just because it is the world’s lowest-cost producer. That’s because the industrial metal with a Ph.D. in economics isn’t exactly predicting gangbuster global growth with its consolidation around $3.50 per pound. Freeport-McMoRan is engaged in mineral exploration and development, mining and milling of copper, gold, and silver in Indonesia, North America, and the smelting and refining of copper concentrates in Spain and Indonesia. It is one of the world’s largest producers of gold and copper. The chart below shows a 3-year performance of FCX vs. a basket of its peers, the Market Vectors Gold Miners ETF (GDX). Worth noting is that FCX has been a Zacks #4 Rank (Sell) or #5 Rank (Strong Sell) since October of 2011. Hopefully this served as a warning sign to bottom-fishers in the miner. How to Boost Demand: Close Mines Fourth-quarter 2012 adjusted earnings matched the Zacks Consensus Estimate while profit rose year over year on higher production. Revenues climbed on higher copper and gold sales, but missed the Zacks Consensus Estimate. Freeport is conducting explorations close to its existing mines with a goal to boost reserves, which will facilitate the development of additional future production capacity across the large minerals districts where it operates. How to Remove Heavy Metals: Buy Oil In December 2012, FCX inked definitive merger pacts, under which, it will buy Plains Exploration & Production Company (PXP) and McMoRan Exploration (MMR) for roughly $9 billion. Freeport said that it will pay $6.9 billion in cash to acquire Texas-based independent oil and gas company, Plains and it will takeover Louisiana-based exploration and production company McMoRan for roughly $2.1 billion in cash (excluding 36% interest currently owned by Freeport and Plains). The total transaction value is roughly $20 billion taking into account the debt to be assumed by Freeport as part of the deal. This move into the energy space was not well-received by investors with the stock dropping hard from $38 to $31. And while it appears the stock finds some substantial buying interest in the $30-31 area–support in 2011 and 2012 corrections and bouncing from there in December and this month–the analysts are obviously still under-whelmed with the company’s prospects and new debt-heavy energy investments. Special Offer: This special report zeroes in on some huge money-making opportunities as well as some urgent sell alerts that could save you from devastating losses in the year ahead. Get nearly 100 buy and sell calls from almost four dozen of the world’s most successful investing experts all in one place in Forbes’ Best Ideas for 2013. While the move to diversify into energy seems smart on the surface–and clearly still commodity-focused–analysts are going to take their time digging for solid answers to what the company’s future earnings will look like. Estimates from the company itself are that the energy division could …read more
Source: FULL ARTICLE at Forbes Latest

News, Politics, Government

Rare Earnings Miss Drops Estimates For CoStarGroup

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By Zacks.com, Contributor

CoStar Group (CSGP), a provider of information and marketing services to commercial real estate professionals in the United States as well as the United Kingdom, has seen consensus estimates fall meaningfully lower for both 2013 and 2014 following a rare earnings miss on February 27. It is a ZacksRank #5 (Strong Sell). Despite the negative earnings momentum, shares still trade at a premium on a forward price to earnings and price to cash flow basis. This doesn’t bode well for shares over the next several weeks. CoStar reported fourth quarter results on February 27. Adjusted earnings per share came in at 33 cents, missing the Zacks Consensus Estimate by 2 cents. Revenue rose 51% to $100.1 million, but this was driven in large part by an acquisition. Following the fourth quarter earnings miss, analysts revised their estimates meaningfully lower for both 2013 and 2014. This sent the stock to a Zacks Rank #5 (Strong Sell). The 2013 Zacks Consensus Estimate is now $1.71, down from $1.80 thirty days ago. And the 2014 consensus is now $2.28, down from $2.57. You can see this sharp decline in the company’s ‘Price & Consensus’ chart: Despite the negative earnings momentum, shares of CoStar still trade at a frothy 56x 12-month forward earnings, which is a significant premium to the industry median of 17x. Its price to cash flow ratio of 63 is also above its the peer group median of 13. CoStar Group also carries a long-term ‘Underperform’ Zacks Recommendation. Special Offer: This special report zeroes in on some huge money-making opportunities as well as some urgent sell alerts that could save you from devastating losses in the year ahead. Get nearly 100 buy and sell calls from almost four dozen of the world’s most successful investing experts all in one place in Forbes’ Best Ideas for 2013. With negative earnings momentum and premium valuation, investors may want to consider avoiding CoStar Group for now. However, there are other stocks within the IT Services industry that investors might want to check out. Unisys (UIS), for instance, carries a Zacks Rank of 1 (Strong Buy), and Infosys (INFY) has a Zacks Rank of 2 (Buy). Todd Bunton is the growth & income stock strategist for Zacks Investment Research and editor of the Income Plus Investor service. …read more
Source: FULL ARTICLE at Forbes Latest

Business, Finance, Occupation & Industry

Big 5 Hits Home Run As Sales Boom

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By Zacks.com

Big 5 Sporting Goods Corporation (BGFV) recently delivered its third consecutive positive earnings surprise on the back of its largest same-store sales increase in over 10 years. Despite a relatively modest earnings beat, analysts revised their estimates significantly higher for both 2013 and 2014, sending the stock to a ZacksRank #1 (Strong Buy).
The company also announced a 33% increase in its quarterly dividend. It now yields a solid 2.6%. And valuation looks reasonable too with shares trading below the industry median.
Company Description
Big 5 is a sporting goods retailer in the western United States with 414 stores in 12 states. It operates under the “Big 5 Sporting Goods” name. The company was founded in 1955 and is headquartered in El Segundo, California. It has a market cap of $334 million.
Strong Fourth Quarter Results
Big 5 delivered better than expected fourth quarter results on February 26. Earnings per share came in at 19 cents, beating the Zacks Consensus Estimate by a penny. It was the company’s third straight positive earnings surprise.
Net sales increased 7.4% to $243.6 million, ahead of the Zacks Consensus Estimate of $242.0 million. This was driven by a 6.5% increase in same-store sales, which was its largest increase in over 10 years. Meanwhile, the gross profit margin expanded 100 basis points to 32.2% of net sales. On top of this, the company leveraged its selling and administrative expenses, which declined 210 basis points to 29.2% of net sales.
In the press release, the company also announced a 33% increase in its quarterly dividend to 10 cents per share. It now yields a solid 2.6%.
Estimates Surging Higher
Despite a relatively modest EPS beat, analysts revised their estimates significantly higher for both 2013 and 2014, sending the stock to a Zacks Rank #1 (Strong Buy). Over the last 30 days, the 2013 consensus has surged from $0.88 to $1.07. Meanwhile, the 2014 consensus has increased from $1.09 to $1.23.
Based on current consensus estimates, analysts project 47% EPS growth this year and 15% growth next year. The company currently anticipates opening approximately 15-20 new stores in 2013, including three relocations, and closing approximately three relocated stores.
Special Offer: This special report zeroes in on some huge money-making opportunities as well as some urgent sell alerts that could save you from devastating losses in the year ahead. Get nearly 100 buy and sell calls from almost four dozen of the world’s most successful investing experts all in one place in Forbes’ Best Ideas for 2013.
Reasonable Valuation
Given Big 5’s strong growth projections, you might expect a sky-high P/E multiple. But that’s not the case. Shares trade a relatively modest 14x 12-month forward earnings, a discount to the industry multiple of 16x. And its price to book ratio of 2.0 is well below the 3.3 median for its peers. …read more
Source: FULL ARTICLE at Forbes Markets

Business, Finance, Occupation & Industry

Big Investors Sprint Toward Skechers

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By Zacks.com

Put on your cool sneakers and run — don’t walk — to check out this turn around story. Skechers USA (SKX) has fought from the back of the pack in the past two years to become a profitable competitor again.
Founded in 1992 and headquartered in Manhattan Beach, California, Skechers designs, develops, and markets active, casual, and hip footwear for men, women, and children through its distribution networks in Canada, Brazil, Chile, Europe, Japan and Asia.
Special Offer: This special report zeroes in on some huge money-making opportunities as well as some urgent sell alerts that could save you from devastating losses in the year ahead. Get nearly 100 buy and sell calls from almost four dozen of the world’s most successful investing experts all in one place in Forbes’ Best Ideas for 2013. …read more
Source: FULL ARTICLE at Forbes Markets