Tag Archives: Zacks Consensus Estimate

News, Politics, Government

Shares Of Agnico Eagle Mines Dive Amid Falling Profits

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By Zacks.com, Contributor

International gold producer Agnico Eagle Mines fell from $40 a share to as low as $25 in late June when gold fell below $1,200. We are upgrading our recommendation on Agnico-Eagle to Neutral. Profit for the first quarter slid roughly 70% on lower gold prices and production as well as higher cash costs. Adjusted earnings fell well short of the Zacks Consensus Estimate. Revenues fell by double digits, yet beat expectations. The company backed its production guidance for the full year. Agnico-Eagle maintains a solid exploration budget and is reinvesting in its assets to expand output. Moreover, the company s revised life of mine plan is expected to yield significant free cash flows over the next several years. However, any potential delay associated with the development projects may jeopardize its future production. We are also concerned about high operating costs across a number of mines. I proposed as early as February when gold began its breakdown below $1600 that the miners would continue to remain under pressure as analysts had to keep lowering their earnings estimates. Why would they have to keep doing that? To keep up with the falling price of gold. While many gold worshippers will be searching for a bottom in the shiny metal at these levels, don’t bet on these miners until their earnings outlooks can get out of the dirt. Their fortunes are tied to the current downtrend and the turnarounds could take a while. Kevin Cook is a Senior Stock Strategist with Zacks.com …read more

Source: FULL ARTICLE at Forbes Latest

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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

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No Fairytale End In Sight For Scholastic

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By Zacks.com, Contributor

Earnings estimates have fallen sharply for Scholastic (SCHL) following disappointing fiscal 2013 third quarter results and lower management guidance. It is a Zacks Rank #5 (Strong Sell) stock. Although shares have sold off since the third quarter report making valuation look a bit more attractive, investors may want to hold off on this stock until earnings momentum improves. Scholastic is the world’s largest publisher and distributor of children’s books. Scholastic delivered disappointing results for the third quarter of its fiscal 2013 on March 21. It reported a loss of -63 per share, which was well below the Zacks Consensus Estimate of -39 cents. It was also well below last year’s loss of -32 cents. Sales slid -19% to $380.5 million, missing the consensus of $384.0 million. It was the company’s third straight top-line miss. This quarter’s decline was driven mostly by the children’s book publishing & distribution segment, which saw sales plunge -30% due to a sharp drop in sales of The Hunger Games trilogy. Special Offer: Stock picks from Forbes Dividend Investor are up 15% since July. Average yield on buys is 5.8%. Click here now to try Forbes Dividend Investor free for 30 days. Management lowered its guidance for the remainder of 2013 following disappointing third quarter results, prompting analysts to revise their estimates significantly lower for both 2013 and 2014. This sent the stock to a Zacks Rank #5 (Strong Sell). The Zacks Consensus Estimate for 2013 is now $1.09, down from $1.53 just 30 days ago. The 2014 consensus has fallen from $2.35 to $2.20 over the same period. You can see the big decline in earnings estimates over the last several months in the company’s ‘Price & Consensus’ chart: Scholastic also carries a long-term ‘Underperform’ Zacks Recommendation. Shares of SCHL are down about -15% since the third quarter earnings release, bringing valuation down with it. The stock currently trades at 13x 12-month forward earnings, which is in-line with the industry median. But investors may want to wait to establish a position in the stock until earnings momentum turns around. While investors might want to avoid Scholastic for now, there are other stocks within the publishing/books industry that investors might want to consider based on their positive earnings momentum. John Wiley & Sons (JW.A) and Reed Elsevier (ENL) , for instance, both carry 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.

Source: FULL ARTICLE at Forbes Latest

News, Politics, Government

Agnico-Eagle Loses Sparkle As Gold Prices Fall

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By Zacks.com, Contributor

As long as the price of gold continues to drift lower, it seems earnings expectations for miners of the yellow metal are following its decline. And in the high-risk metal mining industry, costs can quickly escalate too. This week, Agnico-Eagle Mines (AEM) dropped to a Zacks #5 Rank as analyst 2013 EPS estimates have fallen from $2.44 to $2.04 in the past 60 days. And downward revisions have taken the full-year 2014 down to $2.36 from $2.80. Agnico-Eagle Mines Limited is a Toronto-based gold producer with operations in Canada, Finland and Mexico. The company’s LaRonde mine in Quebec is one of Canada‘s largest operating gold mines by gold reserves and has provided the company s foundation for domestic and international expansion. The company missed expectations in fourth-quarter 2012 with both revenues and adjusted earnings falling short of the Zacks Consensus Estimate. But this was a welcome return to profitability from a year ago. On a reported basis, AEM turned to a profit of $82.8 million or $0.48 per share in the quarter compared with a loss of $601.4 million or $3.53 per share a year ago. The bottom line in the year-ago quarter was hit by $907.7 million of impairment charge at their Meadowbank mine in northern Canada. Special Offer: Stock picks from Forbes Dividend Investor are up 15.9% since July. Average yield on buys is 5.9%. Click here now to try Forbes Dividend Investor free for 30 days. For full-year 2012, AEM posted a profit of $310.9 million $1.81 per share versus a loss of $568.9 million or $3.36 per share in 2011. The hefty impairment loss coupled with production suspension at the Goldex mine crimped the bottom line in 2011. Adjusted earnings of $1.87 per share fell behind the Zacks Consensus Estimate of $2.12. While Agnico-Eagle maintains a solid exploration budget and is reinvesting in its assets to expand output, any potential delay associated with the development projects may jeopardize its future production. And here’s the view of future profits according to the analysts: One of Agnico-Eagle’s main issues has been the persistently high operating costs at its Meadowbank mine in the Canadian Arctic. Ore dilution resulted in lower than expected grades to the mill, and the cost of transportation, logistics, labor and maintenance continued to be much higher than expected. According to the company, Meadowbank previously had a property, plant and mine development book value of about $1.7 billion. Owing to persistently high operating costs, the latest optimized mine plan for Meadowbank resulted in shorter mine life and the company had to reduce the carrying value of the operation. Agnico expects cash costs to increase across a number of mines in 2013. Shut-Down = Write-Down Agnico-Eagle suspended operations at the Goldex mine in October 2011 due to suspected rock subsidence in the hanging wall above the GEZ orebody. Considering the safety of its employees, and the integrity of surface infrastructure, the company decided to stop production at the mine. Due to the uncertainty regarding any future production at Goldex, …read more

Source: FULL ARTICLE at Forbes Latest

News, Politics, Government

Strong Fourth Quarter, Higher Estimates Puts Auto Supplier Stock In High Gear

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By Zacks.com, Contributor

Visteon Corp. (VC) delivered a big fourth quarter earnings and sales beat on February 28, and management provided bullish guidance for 2013. This prompted analysts to revise their estimates significantly higher for both this year and next, sending the stock to a Zacks Rank #1 (Strong Buy). Despite the strong earnings momentum, the valuation picture still looks very reasonable with shares trading at just 1.4x book value. Visteon is a global automotive supplier that specializes in climate, electronics and interiors systems, modules and components for the major automotive manufacturers around the globe. More than 80% of its sales come from outside of North America. Visteon delivered a big fourth quarter beat with adjusted earnings per share came in at $1.17, beating the Zacks Consensus Estimate by 20 cents. Sales rose 5% to $1.823 billion, well ahead of the consensus of $1.782 billion. This increase was primarily driven by higher sales in the ‘climate’ segment, which saw higher production volumes in Asia and North America. The gross profit margin expanded 253 basis points to 10.9%. Meanwhile, selling, general and administrative expenses held steady at 5.6% of total sales. These factors led to a solid 27% increase in earnings before interest, taxes, depreciation and amortization (EBITDA). Special Offer: Stock picks from Forbes Dividend Investor are up 15.9% since July. Average yield on buys is 5%. Click here now to try Forbes Dividend Investor free for 30 days. Estimates Rising Following strong fourth quarter results, management provided encouraging sales and EBITDA guidance for 2013. This prompted analysts to revise their estimates higher for both 2013 and 2014, sending the stock to a Zacks Rank #1 (Strong Buy). The 2013 Zacks Consensus Estimate is now $3.98, representing 37% growth over 2012. The 2014 consensus is currently 38% higher at $5.50. The two biggest factors of the Zacks Rank are the ‘Agreement’ and ‘Magnitude’ of the analysts’ estimates. As you can see in the chart below, both of these factors are moving in the right direction: Reasonable Valuation The valuation picture looks reasonable for Visteon with shares trading at 13x forward earnings, inline with its historical median. Its price to book ratio is just 1.4, which is also inline with its historical multiple. With strong earnings momentum and reasonable valuation, Visteon 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. …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

Titan In The Line Of Fire As Mining Optimism Cools

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By Zacks.com, Contributor

The industrial sector has been hot this year, always a percent or two ahead of the broad market. The reasons for optimism have been sound, from a turn-around in the Chinese economy to the US housing recovery gaining steam. But that optimism may be cooling off and we need look no further than two big name equipment manufacturers to see it unfolding: Caterpillar (CAT) and Deere (DE). And one company in the direct line of fire of a machinery slow-down could be Titan International (TWI) , a global manufacturer of off-highway steel wheels and tires in the agricultural, earthmoving/construction and consumer markets. The mining industry, from metals to iron ore, has also seen earnings and outlooks take a hit recently, with names like Cliffs Natural Resources (CLF) and Joy Global (JOY) being sold as estimates soften. The gold miners are currently one of the lowest ranked industry groups in Zacks classification of 265 industries. Titan generally manufactures both wheels and tires for these markets and provides the value-added service of assembling the completed wheel-tire system. They offer a broad range of different products that are manufactured in relatively short production runs to meet original equipment manufacturers’ specifications and/or aftermarket customer requirements. Special Offer: What you don’t own is just as important as what investments you do own. Top investing experts named names when it comes to securities to avoid in the year ahead. Get the results in this free downloadable report, 24 Widely-Held Investments You Should Sell Now. Earnings Picture Rolling the Wrong Way Despite reporting record annual results on February 25, 2013, the hiccup in Titan’s growth outlook had been foreseen by the analysts since early this year. And missing the fourth quarter consensus EPS estimate of 47 cents by 80% didn’t help. Here’s the view from the Zacks proprietary Price & Consensus chart… Since that earnings report, the Zacks Consensus Estimate for 2013 has dropped by 10.4% to $2.41 per share while that for 2014 plummeted 16.6% to $2.75 per share. It’s worth mentioning the record revenue picture here too. Revenue of $493.6 million represented a 22.5% improvement over the year-ago quarter. The impact was, however, negated by a 28.4% increase in cost of sales that led to a 12.0% fall in gross profit, and a big drop from the year-ago quarter’s 37 cents EPS. Where the Big Wheels Meet the Dirt Decreasing earnings estimates together with a mixed bag of both positive and negative earnings surprise for the past year — producing an average of miss of -9.6% — raises skepticism over Titan International‘s performance in the quarters ahead. Titan is still projected by some analysts to have mid-teens earnings and sales growth. But until the estimate picture stabilizes, it’s probably best to stand aside. Watching how CAT and DE estimates shake out would be a good idea too. Kevin Cook is a Senior Stock Strategist with Zacks.com …read more
Source: FULL ARTICLE at Forbes Latest

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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

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Earnings Bonanza Has Macy's Looking Good

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By Zacks.com, Contributor

Macy’s (M) delivered the coveted “triple play” with its latest earnings report. On February 26, the company reported: A positive earnings surprise A positive sales surprise Management guidance above the Zacks Consensus Estimate This prompted analysts to revise their estimates higher for both 2013 and 2014, sending the stock to a Zacks Rank #1 (Strong Buy). Since the Great Recession officially ended in 2009, Macy’s has consistently delivered solid same-store sales growth and expanding profit margins, which has led to annual double-digit earnings growth. And analysts expect this trend to continue over the next couple of years. Despite this, shares trade at just 10.5x 12-month forward earnings, well below the industry median of 14.0x. Tack on a solid 1.9% dividend yield, and this stock looks poised to deliver strong total returns to investors. Macy’s operates about 800 Macy’s department stores in 45 states, the District of Columbia, Guam and Puerto Rico. It also owns and operates the Bloomingdale’s brand, which has 37 department stores in 11 states. On February 26, Macy’s delivered strong results for its fiscal 2012 fourth quarter. Sales increased 7.2% to $9.350 billion, which was ahead of the Zacks Consensus Estimate of $9.327 billion. The company benefited from an extra week in the quarter, but if you strip that out, same-store sales on a comparable 13-week period still rose a solid 3.9%. Online sales were particularly strong, rising 48% over the same period last year (online sales are included in the same-store sales calculation). Meanwhile, adjusted operating income expanded 50 basis points to 14.9% of sales. This led to a 21% increase in adjusted earnings per share for the quarter to $2.05, well ahead of the Zacks Consensus Estimate of $1.98. It was a 21% increase over the same quarter last year. It was also Macy’s 11th consecutive positive earnings surprise; quite an impressive streak for a retailer. Estimates Rising Following the solid fourth quarter results, management provided 2013 EPS guidance of $3.90-$3.95, which was ahead of consensus at the time. Not surprisingly, this prompted several positive earnings estimate revisions from analysts, sending the stock to a Zacks Rank #1 (Strong Buy). The two biggest factors in the Zacks Rank are the ‘agreement’ and ‘magnitude’ of analysts’ estimates. And as you can see in the chart below, analysts unanimously raised their estimates off the strong quarter, and it bumped consensus estimates up for both 2013 and 2014 by a decent amount: Based on current consensus estimates, analysts project 13% EPS growth this year and 12% growth next year. If Macy’s can deliver on these projections, it would mark the company’s 4th and 5th years of consecutive double-digit EPS growth. Special Offer: What you don’t own is just as important as what investments you do own. Top investing experts named names when it comes to securities to avoid in the year ahead. Get the results in this free downloadable report, 24 Widely-Held Investments You Should Sell Now. Attractive Valuation, Dividend Despite the strong growth projections, shares trade at just …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

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As Boomers Prepare To Retire, Winnebago Pulls Ahead

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By Zacks.com, Contributor

What’s an indication the economy is back? Consumers are buying RVs again. Winnebago Industries (WGO) managed to make it through the Great Recession, gobbling up market share along the way. This Zacks Rank #1 (Strong Buy) is now poised for triple digit earnings growth in 2013 as RV sales rebound. Winnebago’s brand recognition is so strong that when you think of RVs it’s the first name that comes to mind. Founded in 1958 in Iowa, Winnebago manufactures a variety of recreation vehicles (RVs) including motor homes, travel trailers and fifth wheel products. Given consolidation in the industry during the Great Recession, Winnebago was able to add to its market share and now has about 20% of the RV market. Motor home sales peaked in 2004 at 69,000 and plunged during the Great Recession. By 2011, only 25,000 motor homes were shipped. But that number is expected to slowly rise as the economy improves and the Baby Boomers age. The key segment of RV buyers is 55 to 64 years of age. The Baby Boomers are just on the cusp of reaching that age range right now with more to come in the next few years. That’s a built-in market for RVs. Additionally, the stock market has recovered its pre-recession highs and housing is starting to recover, both which will free up cash for Baby Boomers to take to the road. All of this adds up to good things for the RV manufacturers. The RV and manufactured home industry has a top Zacks Industry Rank of 9 out of 265 industries. Special Offer: What you don’t own is just as important as what investments you do own. Top investing experts named names when it comes to securities to avoid in the year ahead. Get the results in this free downloadable report, 24 Widely-Held Investments You Should Sell Now. On Dec. 20, Winnebago reported fiscal first quarter 2013 results and blew by the Zacks Consensus Estimate by 189%. Revenue surged 46.8% to $193.6 million in the 14-week quarter from $131.8 million in the 13-week quarter a year ago. Inventories at dealerships are low and demand is rising. The company has had to hire additional employees to meet production demands the last two quarters. It also warned that production would slow during the winter holidays due to employees taking time off. Given the grim years of the Great Recession, having too many orders is certainly a problem the company will gladly deal with. The tide is turning in the RV industry. Just 90 days ago, the analysts were not as bullish. The Zacks Consensus Estimate for Fiscal 2013 was just 47 cents. But given the big beat in the first quarter, the estimates surged to 80 cents. That is earnings growth of 220% as Winnebago earned just 25 cents in 2012. While the short term picture looks bright, the longer term outlook past 6 months is also strong for Winnebago. It has a Zacks Recommendation, which looks out further than the Zacks Rank, of …read more
Source: FULL ARTICLE at Forbes Latest

Business, Finance, Occupation & Industry

Polypore Earnings Trickle To A Halt

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By Zacks.com

Polypore International, Inc. (PPO) reported its third consecutive earnings miss on February 20, driven by a 6% decline in sales. This prompted analysts to revise their estimates for both 2013 and 2014 significantly lower, sending the stock to 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-book basis. This doesn’t bode well for shares over the next several weeks.
Company Description
Polypore International is a high technology filtration company that develops, manufactures and markets specialized polymer-based microporous membranes used in separation and filtration processes. Its products are used in two primary segments: energy storage (75% of total sales) and separations media (25%).
The company is headquartered in Charlotte, North Carolina and has a market cap of $1.8 billion.
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Fourth Quarter Results
Polypore reported fourth quarter results on February 20. Adjusted earnings per share came in at 33 cents, falling well short of the Zacks Consensus Estimate of 46 cents. It was the company’s third consecutive earnings miss.
Sales declined 6% to $180.2 million, falling well short of the consensus of $191.0 million. The ‘Electronics and Electric Drive Vehicles (EDVs)’ division within the energy storage segment was particularly soft due to weak end-market demand.
Estimates Falling
Following the Q4 earnings miss, analysts revised their estimates significantly lower for both 2013 and 2014. This sent the stock to a Zacks Rank #5 (Strong Sell). The 2013 Zacks Consensus Estimate is now $1.69, down from $2.08 just 30 days ago. And the 2014 consensus is now $2.21, down from $2.73. You can see this sharp decline in the company’s ‘Price & Consensus’ chart: …read more
Source: FULL ARTICLE at Forbes Markets

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.
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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

News, Politics, Government

Salesforce Stock Soars Into The Cloud With Nosebleed P/E

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By Zacks.com, Contributor

Salesforce.com (CRM) surged to new all-time highs after reporting a Q4 FY2013 adjusted loss per share of 2 cents, narrower than the Zacks Consensus Estimate of a 3 cent loss. If that’s the not-so-awful result investors were hoping for as they drove the stock up 10% from under $170 to over $186 since last Friday, then maybe they are happy with this company who could take another year to slowly return to profitability. Salesforce.com is the giant $27 billion leader in on-demand business software services. The company’s Salesforce suite of on-demand CRM applications allows customers to manage and share all of their sales, support, marketing and partner information on-demand. Let’s take a look at what might have cheered investors about their recent report and then we’ll see why it fell to a Zacks #5 Rank (Strong Sell) afterwards. Special Offer: Stock picks from Forbes Dividend Investor are up 12.7% vs. 7.6% for identically timed buys of the S&P 500 index since July. Average yield is 5.8%. Click here now to try Forbes Dividend Investor free for 30 days. Revenue Picture Encouraging Revenues in the quarter were $834.7 million, up 32.0% from the year-ago quarter. The quarter’s result was also above the company’s guidance range of $825.0 million to $830.0 million. Salesforce witnessed an improvement in revenues from all its business segments. Subscription and support revenue was $785.5 million, up 32.0% on a year-over-year basis, while the Professional services and other revenue was $49.2 million, up 31.0% year over year. Geographically, the company witnessed decent revenue growth in all of its operating regions. Revenue in the Americas was up 34.0% to $583.0 million, while Europe grew 37.0% to $149 million, and Asia logged a 17.0% boost to $103 million. Company Guides Sales into the Clouds For the first quarter of FY2014, the company expects revenue in the range of $882 million to $887 million, expecting an increase of 27.0% to 28.0% year over year. This is clearly driven by their ability to upgrade business service offerings with new cloud-based applications in addition to attracting new clients. For the full year 2014, revenue is expected in the range of $3.82 billion to $3.87 billion, up 25%-27% year over year. While there are a handful of analysts maintaining price targets over $200, like Deutsche Bank who praises the recent acquisition and integration of Heroku technology (no, I don’t know what that is but it has something to do with developers being able to write programs that work with CRM stuff), the Street hasn’t clamored to raise EPS estimates for the new year. Until we see the estimates picture stabilize, I can’t see adding to positions here, much less chasing new ones. And with the stock 23% over its 200-day moving average, those with profits might consider taking some off the table.  Based on the consensus EPS forecast of $1.97, CRM trades at a mighty lofty 94 times expected January 2014 earnings. The Costs of Being the Giant CRM‘s gross profit expanded 31.4% year over …read more
Source: FULL ARTICLE at Forbes Latest

News, Politics, Government

This Bull Market Is Over For Capital One

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By Zacks.com, Contributor

This might be the right credit card for your wallet, but the stock should be strongly re-evaluated if it’s in your portfolio. Capital One Financial (COF) slipped to a Zacks #5 Rank (Strong Sell) last week after a continued deluge of downward earnings estimate revisions. This is happening in the aftermath of a mixed earnings report that took the stock down sharply last month from its 52-week high. The company reported fourth quarter 2012 earnings of $1.41 per share which significantly lagged the Zacks Consensus Estimate of $1.62. This was a big improvement from the prior-year quarter’s 88 cents, but investors and analysts are still looking for the bright spots. Before we look at some of the details of that report, let’s take a look at the Zacks Price & Consensus chart which gives us a great visual on which way estimates are headed and if price may soon follow. Rising Costs, Fees, and Interest Rates For 2012, Capital One reported earnings of $6.16 per share. This was below the Zacks Consensus Estimate of $6.43 and prior-year earnings of $6.80. Capital One‘s net revenues for the reported quarter stood at $5.62 billion, jumping 38.9% year over year. Yet, revenues were below the Zacks Consensus Estimate of $5.78 billion. Net revenues for 2012 were $21.40 billion, surging 31.4% from $16.28 billion in 2011. Also, revenues were above the Zacks Consensus Estimate of $20.86 billion. Net interest income for the quarter grew 42.3% from the previous-year quarter to $4.53 billion. However, net interest margin decreased 70 basis points (bps) year over year to 6.52%. Non-interest income surged 26.3% from $868 million in the prior-year quarter to $1.10 billion in the reported quarter. The increase was mainly driven by higher service charges and other customer-related fees as well as rise in interchange fees. Special Offer: Stocks recommended in Forbes Dividend Investor are up 12.6% since July 11, 2011, versus 7.3% for the S&P 500.  Click here for a trial subscription with instant access to all picks and the Top 25 portfolio.  Average yield is 5.7%. Capital One‘s operating expenses rose 24.3% from the prior-year quarter to $3.26 billion. The increase was largely attributable to higher salaries and associate benefits costs and merger-related expenses, partially offset by lower marketing expenses. If you are a COF investor, it may be a good time do some further research on what’s going on inside their business. It’s quite possible that analysts see something in rising costs or interest rates, or in the company’s credit quality and delinquencies that is driving this new trend of lowered expectations. Kevin Cook is a Senior Stock Strategist with Zacks.com …read more
Source: FULL ARTICLE at Forbes Latest

News, Politics, Government

Progressive Waste Down In The Dumps After Earnings Miss

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By Zacks.com, Contributor

Progressive Waste Solutions Ltd. (BIN) reported a fourth quarter earnings miss, and management provided weak guidance for 2013. This prompted analysts to revise their estimates lower for both 2013 and 2014, sending the stock to a Zacks Rank #5 (Strong Sell) stock. Although shares have sold off a bit after the report, valuations still do not look cheap. Progressive Waste Solutions is a full-service waste management company that provides non-hazardous solid waste collection, recycling and disposal services to commercial, industrial, municipal and residential customers in 13 U.S. states and the District of Columbia and six Canadian provinces. It is headquartered in Vaughan, Canada and has a market cap of $2.4 billion. Earnings Miss, Weak Guidance Progressive Waste Solutions reported its Q4 results on February 14. Earnings per share came in at 24 cents, missing the Zacks Consensus Estimate by 8%. This marked the company’s third earnings miss in the last four quarters. EPS was also 25% lower than in the same quarter in 2011. Revenues did rise 8%, but this was driven mostly by acquisitions and favorable foreign currency effects. Organic revenues were up just 0.6%. Meanwhile, adjusted operating income fell 19% year-over-year. Management also provided weak guidance for 2013, prompting virtually every analyst to revise his estimates lower for both 2013 and 2014. This sent the stock to a Zacks Rank #5 (Strong Sell). The 2013 Zacks Consensus Estimate has fallen 16% since the Q4 report to $0.99, while the 2014 consensus is down 8% to $1.23. The Zacks Industry Rank isn’t very bullish either. The ‘Pollution Control’ industry ranks in the bottom quartile of all the industries that we rank. Special Offer: Stocks recommended in Forbes Dividend Investor are up 12.6% since July 11, 2011, versus 7.3% for the S&P 500.  Click here for a trial subscription with instant access to all picks and the Top 25 portfolio.  Average yield is 5.7%. Premium Valuation Shares of Progressive Waste are down about 8% since the Q4 earnings release, but the stock still looks a bit pricey. BIN trades at 20x 12-month forward earnings, ahead of the industry median of 18x and the stock‘s historical median of 19x. Progressive Waste also carries a long-term ‘Underperform’ Zacks Recommendation. The Bottom Line With negative earnings momentum, sluggish organic top-line growth and premium valuation, don’t expect strong outperformance from this stock anytime soon. BIN data by YCharts 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

News, Politics, Government

Avery Dennison Turns Triple Play, Stock Tagging Fresh Highs

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By Zacks.com, Contributor

Avery Dennison completed a triple play in the fourth quarter: a positive earnings surprise, a positive sales surprise, and strong management guidance. This prompted analysts to revise their estimates higher for both 2013 and 2014, sending the stock to a Zacks Rank #1 (Strong Buy) stock. Although shares have risen more than 10% off the strong quarter, valuations still look very reasonable. So shares of Avery Dennison have plenty of room to continue marching higher. Avery Dennison manufactures labeling and packaging materials for a wide variety of industries around the globe. It reports its results in three segments: -Pressure-sensitive Materials: 71% of total sales -Retail Branding & Information Solutions: 25% -Other Specialty Converting Businesses: 4% Pressure-sensitive materials consist primarily of papers, plastic films, metal foils and fabrics, which are coated with special adhesives, and then laminated with specially coated backing papers and films. These label and packaging materials are sold worldwide to label printers and converters for labeling, decorating, fastening, electronic data processing and special applications in the home and personal care, beer and beverage, durables, pharmaceutical, wine and spirits, and food market segments. The Retail Branding & Information Solutions segment makes a wide variety of brand identification and information management products for retailers, apparel manufacturers, distributors and industrial customers around the globe. Its brand identification products include woven and printed labels, graphic tags and barcode tags, and its information management products include price tickets, carton labels, RFID tags and printing applications. Avery Dennison was founded in 1935 and is headquartered in Pasadena, California. It has a market cap of $4.0 billion. Special Offer: We asked some of the most successful investors in the country to name their #1 pick for 2013. Get details on their top 10 stocks in this free report, Forbes Top Stocks for 2013…10 to Buy Now. Solid Fourth Quarter Results Avery Dennison delivered better-than-expected Q4 results on January 30. Earnings per share came in at 54 cents, well ahead of the Zacks Consensus Estimate of 49 cents. It was a 50% increase over the same quarter in 2011. Net sales rose 5% to $1.532 billion, beating the Zacks Consensus Estimate of $1.486 billion. Organic sales growth was even better at 7%. The Pressure-sensitive Materials segment saw organic top-line growth of 6% while sales in Retail Branding & Information Solutions jumped 10%, driven by increased demand from U.S. and European retailers and brands, including accelerating RFID adoption. Meanwhile, the adjusted operating margin expanded 170 basis points to 6.6%. Bullish Guidance Following strong Q4 results, management provided encouraging guidance for 2013. The company expects adjusted EPS from continuing operations of $2.40 to $2.80 in 2013, which prompted analysts to revise their estimates higher. The ZacksConsensus Estimate for 2013 is now $2.57, up from $2.45 before the Q4 release. This represents 23% growth over 2012 EPS. The 2014 consensus increased too, rising 15 cents to $2.86. This corresponds with 12% annual EPS growth. It is a Zacks Rank #1 (Strong Buy) stock. Valuation Shares of AVY are up …read more
Source: FULL ARTICLE at Forbes Latest

News, Politics, Government

Valmont's Shares Blossom But Still Have Room To Grow

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By Zacks.com, Contributor

Valmont Industries (VMI) is primarily engaged in the production of fabricated metal products, metal and concrete pole and tower structures, and mechanized irrigation systems in the U.S. and abroad. Customers and end-users of Valmont’s products include state and federal governments, contractors, utility and telecommunication companies, manufacturers of commercial lighting fixtures and large farms, as well as the general manufacturing sector. Roughly 45% of total sales last year were either achieved in markets or produced by manufacturing plants outside of North America. The company has diversified geographically to more than 100 countries. In Valmont’s fourth-quarter 2012 earnings report last week, it posted EPS of $2.43 per share, outstripping the Zacks Consensus Estimate of $2.24 while declining from the prior-year quarter’s earnings of $4.33 per share. While profit slid roughly 43% year-over-year to $65 million in the reported quarter, the year-ago quarter’s profit was boosted by one-time benefits associated with the reorganization of the company’s legal structure. Barring that benefit, earnings were $1.83 per share a year ago. For full-year 2012, earnings came in at $8.75 per share, also topping the Zacks Consensus Estimate of $8.56. Valmont posted revenues of $815 million in the fourth quarter, up 8% year-over-year. It exceeded the Zacks Consensus Estimate of $792 million. Sales were driven by double-digit gains across Valmont’s utility support structures and irrigation segments. Valmont’s irrigation and coatings segments are witnessing strong momentum recently. In the irrigation segment, improving North American equipment demand amid the ongoing drought conditions and higher farm income is boosting sales and profitability. The coatings segment is benefiting from moderating zinc prices and declining energy costs. Valmont is also poised to see incremental opportunity in the utility market. The global transmission and distribution markets are seen as major long-term growth opportunities. VMI is actively pursuing capacity expansion through new constructions and extension of existing facilities to meet the increasing demand from utility customers in North America. The engineered infrastructure products segment, while remaining challenged by the soft market conditions in Europe and weak government spending, is expected to post sales gains in 2013. The passage of a two year highway bill and improvement across the wireless communications and commercial lighting markets represents positives for the infrastructure business. Moreover, infrastructure build-outs by wireless carriers to support the roll out of 4G network is supporting the results of the company s wireless communication structures business. Valmont has a long history of acquisitions. In 2008, it acquired Penn Summit LLC, a manufacturer of steel utility and wireless communication poles in Pennsylvania. It also acquired 70% of Canada’s West Coast Engineering Group, a manufacturer of steel and aluminum structures. In the same year, Valmont acquired Site Pro 1, a distributor of wireless communication components in the U.S. market. In November 2008, Valmont fully acquired Stainton Metal Co., a manufacturer of steel structures for the lighting, transportation and wireless communication industries in the U.K. Special Offer: This special report zeroes in on some huge money-making opportunities as well as some urgent sell alerts that could save …read more
Source: FULL ARTICLE at Forbes Latest

News, Politics, Government

Medicare Cuts, Flat Pricing Dampen Quest's Outlook

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By Zacks.com, Contributor

Quest Diagnostics, (DGX) a leading provider of medical diagnostic testing services, reported a lackluster fourth quarter 2012 on January 23 with adjusted EPS of $1.01, down 15.8% year-over-year, missing the Zacks Consensus Estimate by $0.05. Fourth quarter results for Quest (Analyst Report) were of particular concern when seen from the top line. Year-over-year sales declined 4% primarily due to 4.4% drop in diagnostic information services revenues that accounts for over 90% of total revenues of the company. Adjusted operating margin in the quarter contracted 232 basis points (bps) to 15.98%. Additionally, analysts are concerned about DGX‘s guidance for 2013 given market and competitive challenges. Quest’s expected revenue growth for the upcoming fiscal quarter is to remain within a band as low as 0% to 1%, missing the Zacks Consensus Estimate of $7.5 billion that represents annualized growth rate of 1.4%. Special Offer: Stock picks from Forbes Dividend Investor are up 11.7% vs. 7.4% for identically timed buys of the S&P 500 index since July. Average yield on buys is 5.8%. Click here now to try Forbes Dividend Investor free for 30 days. The current market environment continued to remain challenging for Quest Diagnostics in the form of commercial pricing pressures and Medicare cuts (including recent pathology service reimbursement reduction), which may lead to a 3% reimbursement decline in 2013. Apart from this challenging underlying market conditions, Quest is also witnessing several issues in the form of weak volume growth, flat pricing and low organic revenue. Although the last published data showed inching up of physician office visits after a consistent decline since 2008, the sustainability of this improvement is still uncertain. After analyzing the reasons behind the fourth quarter debacle and the conservative outlook, Zacks analysts downgraded the stock to Underperform on February 1 and lowered their estimates for 2013 and 2014. They also lowered their 2013 and 2014 revenue estimates by $153 million and $194 million, respectively. Correspondingly, EPS estimates were lowered for 2013 and 2014 by 45 and 37 cents to $3.96 and $4.34, respectively. These actions are consistent with the trend among other covering analysts as you can see from the Price & Consensus chart below which shows consensus EPS estimates and their changes in magnitude and direction over time. Finally, from a technical view of the chart, the stock is stuck underneath its 50- and 200-day moving averages. A break of $56 will probably bring a test of the 52-week low near $53. And even though we are talking about a company with a forward P/E of just 13X, until the revenue and earnings picture is clearer for Quest, it’s probably best to wait for another quarter before considering this name on the long side. Kevin Cook is a senior stock strategist with Zacks.com …read more
Source: FULL ARTICLE at Forbes Latest