Archive for 'Zacks'

Zacks Top 5 Value Stocks for a Bull Market

With all the leading indicators being in tune with a great economic maestro, this current bull market has just been chugging along like a well oiled machine for over eight years now. Interest rates are low, inflation is lower, unemployment is almost a non factor and housing is rebounding to keep fueling this rising market. With all these factors moving in the plus side, it becomes a little more difficult to find those undervalued stocks but here’s a few picks to get you started. 

We are 8.5 years into the current bull market, so every now and then, somebody raises a red flag, and for a few days we are treated to reports about the possibilities of the next recession that could usher in another bear market. But that just doesn’t seem to be happening.

For one thing, the unemployment rate is at a 16-year low. For another, personal income and personal disposable income are both on the rise according to the Bureau of Economic Analysis. Rising prices, especially for food and energy did however result in a 0.1% decline in real income in August.

The Michigan Consumer Confidence Index (MCCI) suffered a slight setback in September due to concerns about the economy in the wake of hurricanes Harvey and Irma, dropping from 97.6 in August to a still-high 95.3. “Renewed gains in incomes as well as rising home and equity values have acted to counterbalance the negative impacts from the hurricanes,” Richard Curtin, chief economist for the Surveys of Consumers, said in a statement.

The housing market is in a multi-year expansion, partly because of the growing population and partly because millennials are finally settling down. The production side hasn’t been able to keep up, resulting in tight inventory and high prices. Hurricanes Harvey and Irma just made matters worse, further pressuring labor and materials supply and making production that much more difficult. While these factors made for a significantly weaker September, PWC principal Scott Volling expects a flatter market here on out with a rebound in the spring 2018 selling season.

As far as industrial production indicators are concerned, the ISM report has PMI, new orders and production indexes at 60.8%, 64.6% and 62.2%, all of which expanded from August to September. A contraction is not normally indicated until the PMI falls under 50%.

Why Value Investing Makes Sense Now

Value investing presupposes that there are companies out there that are capable of better and also taking the necessary steps to get there. So the idea is to build position in these stocks before the rest of the market does, thereby gaining the most from any subsequent upside. Naturally, the strategy is not for the rookie, but folks who have done the necessary research to identify these companies. The higher profits and ability to absorb volatility are the rewards.

Finding these stocks in a bull market can be tricky since valuations are generally on the high side. That’s where the Zacks Style Score system comes in handy. Coupled with a Zacks Rank #1 or #2 (buy rated stocks), a value style score of A or B should be able to help you make more money while avoiding value traps (getting into stocks with low valuation but because of limited potential).

5 Value Stocks to Buy Today

Here are some stocks that are worth looking at because they have a Zacks Rank #1 (Strong Buy) and Value Score A.

Alliance Resource Partners, L.P. (ARLP)

Alliance Resource is a diversified producer and marketer of coal to major U.S. utilities and industrial users. It currently operates mining complexes in Illinois, Indiana, Kentucky and Maryland. Some of its mining complexes are underground and one has both surface and underground mines. It produces a diverse range of steam coals with varying sulfur and heat content, which enables it to satisfy a broad range of specifications.

Bellway plc (BLWYY)

Bellway plc is engages in the building of residential houses and conducts associated trading activities. The company provides houses which includes detached, semi-detached, terraced properties, as well as town houses, apartments, bungalows and five-bedroom family homes. It operates primarily in England, Wales and Scotland. Bellway plc is headquartered in Newcastle upon Tyne, the United Kingdom.

Beijing Enterprises Holdings Ltd. (BJINY)

Beijing Enterprises Holdings Limited distributes and sells natural gas in the People’s Republic of China. Its city gas segment is a natural gas supplier and service provider. It also has other operations. Water and environment-related services include investments, design, construction and operational management as well as production of key equipment and facilities and related overall engineering works.

The toll road business is made up of three major highways, including the Beijing Capital International Airport Expressway, Airport North Freeway and Shenzhen Guanshun Road. The beer business is an important revenue center for Beijing Enterprises Holdings.

The technology business of Beijing Holdings is comprised of a combination of electronic payment and information technology, with a portfolio of investments in solid waste disposal, environment-related services and technology incubation. Beijing Enterprises Holdings Limited is based in Wanchai, Hong Kong.

Signet Jewelers Limited (SIG)

Signet Jewelers Ltd. is engaged in retailing of jewelry, watches and associated services. The company operates primarily in the United States, the United Kingdom, the Republic of Ireland and the Channel Islands. Signet Jewelers Ltd., formerly known as Signet Group PLC, is based in Hamilton, Bermuda.

Santander Consumer USA Holdings Inc. (SC)

Santander Consumer USA Holdings Inc. is a technology-driven consumer finance company which focused on vehicle finance and unsecured consumer lending products. The company’s vehicle finance products and services include consumer vehicle loans, vehicle leases and automotive dealer floorplan loans. Santander Consumer USA Holdings Inc. is headquartered in Dallas, Texas.

Zacks Value in a Bull Market

 

Can Halliburton Keep the Streak Going?

Halliburton

One of the top providers of services for the oil industry has been beating earnings projections for about three years straight now and it shows no signs of doing anything differently now. The last quarter report raised some eyebrows with a significant earnings report and some of the experts are expecting more of the same. 

Major oilfield service provider Halliburton Company (HAL) is scheduled to report its third-quarter earnings on Monday, Oct 23, before market opens.

In the preceding three-month period, the company delivered a positive earnings surprise of 21.1%. Moreover, both Halliburton’s segments – Completion and Production, as well as, Drilling and Evaluation – reported revenues slightly better than our estimates thanks to improved utilization and pricing gains in North America.

On a further encouraging note, the world’s second-largest oilfield services company after Schlumberger Limited (SLB) has an incredible history when it comes to beating earnings estimates. Investors should note that Halliburton hasn’t missed earnings estimates since mid-2014.

mportantly, this Houston, TX-based provider of technical products and services to drillers of oil and gas wells is likely to maintain this trend in the third quarter. Evidently, multiple tailwinds including the recovery in commodity prices have buoyed the entire space.

With U.S. activity accelerating and margins set to remain strong, Halliburton’s underlying results are likely to come ahead of our expectations. The positive sentiment surrounding the stock can be gauged from the fact that the estimate revision trend has been solid with eight upward estimate revisions and just one down in the last two months.

Consequently, the stock has done better than the peer group so far this year; it is down 17.5% in 2017 as against 30.2% loss for the Zacks Oil and Gas Field Services industry.

Let’s delve deep to find out the factors likely to impact Halliburton’s third-quarter results.

A Likely Positive Surprise?

With U.S. rig count falling to record levels last year, oilfield services players (like Halliburton) were hit hard. Unprecedented declines in activity levels and a sharp fall in upstream spending led to lower revenues and pricing headwinds.

However, as commodity prices steadily improve and drilling activities pick up, the market for services companies is on the mend. Though we are still not anywhere near the activity highs seen in 2014, spending on exploration projects have experienced a much-awaited rebound. The energy explorers, buoyed by the jump in commodity prices, are set for improving sales and earnings – a part of which is likely to be pocketed by the long-struggling oilfield service providers.

In fact, during last quarter’s earnings release, the company also sounded optimistic in its view that the North American land market is improving rapidly, driven by increased utilization and pricing – particularly for pressure pimping.

As a proof of the resurgence in activities, the Zacks Consensus Estimate for third-quarter Completion and Production revenue is pegged at $3,430 million, much higher than $3,132 million reported in the second quarter of 2017. Sales in the Drilling and Evaluation unit is forecasted to be $1,888 million, more than the prior quarter figure of $1,825.

We also appreciate Halliburton’s successful cost-management initiatives in the midst of weak oil prices over a length of time. Last year, the company successfully implemented on its plan of pruning annual costs by $1 billion. In fact, Halliburton has used the challenges prevailing in the industry to its advantage, mainly by offering low cost solutions that aids producers in churning out more by investing less.

See more on Halliburton

 

Zacks- Top 5 Stocks for Income

Income Stocks

There are many ways to invest in the markets and a lot depends on your own personal circumstances and the amount of risk that you’re willing to take. For example, the buy and hold approach is great if you have the time but it doesn’t always fit everybody’s needs. Sometimes you just want to get paid now. Here’s five stocks for income generation from Zacks

Not all investors intend to wait forever to generate returns from their investments. Nor do they have an appetite for risk. They also might have the need for immediate and regular income generation.

Here are five stocks for such investors-

Vedanta Resources Plc (VDNRF )

Headquartered in London, Vedanta Resources plc is engaged in exploring, extracting and processing minerals, and oil and gas. It produces zinc, lead, silver, copper, aluminum, iron ore, oil and gas and commercial power. The company operates primarily in India, Zambia, Namibia, South Africa, Liberia, Ireland, Australia and the United Arab Emirates. The Basic Materials-Mining segment, of which Vedanta is a part, is in the top 23% of the 265 Zacks-classified industries. As may be expected, this isn’t a seasonal business, so output varies on other considerations. Operating and interest expenses form a smaller part of the outlay than COGS. Financial leverage is usually high, but the debt-to total capitalization ratio is maintained at very manageable levels of within 38% (which dropped down to nearly 30% in the June 2017 quarter). Vedanta is reportedly one of India’s leading exporters, especially in the zinc, aluminum and refined copper, iron ore and crude oil segments, so it is set to benefit from the government’s recent growth initiatives. Given the increasingly favorable operating climate, the company plans to significantly expand operations over the next few years.

As far as valuation is concerned, the company’s share price is up 19.3% in the last six months compared to 13.5% for the industry.

Wheeler Real Estate Investment Trust, Inc. (WHLR )

Headquartered in Virginia Beach, Wheeler Real Estate Investment Trust, Inc. is engaged in acquiring, financing, developing, leasing, owning and managing income producing assets, such as strip centers, neighborhood centers, grocery-anchored centers, community centers and free-standing retail properties. It operates in the mid-Atlantic, southeastern and southwestern United States.

The REIT & Equity Trust-Retail segment, of which WHLR is a part, is in the top 40% of the 265 Zacks-classified industries. The business is somewhat seasonal with strength in the December quarter, which is the biggest retail selling season. While revenues have been range bound in the last five years, gross profit, net income and earnings have been trending up. Interest expense has come down steadily as debt levels were lowered. The debt-to total capitalization ratio has therefore gone down to under 60%. Wheeler has been adding properties while selling off those that weren’t yielding enough, which together have increased its revenues and earnings. It has also leased out over 94% of its gross leasable area (GLA), an indication of the efficiency of its operations. But it’s also to be noted that the company’s credit facility may be reduced in the very near future, which could impact its ability to make new purchases.

Top 5 Income Stocks

 

Zacks Bull of the Day 8-17-15

This Bull of the Day is in the Health and diet category that’s been pushing past all expectations and is now considered a strong buy. Check out Tracey Ryniec’s  post below

Nutrisystem, Inc. is on the right side of the health and wellness debate. This Zacks Rank #1 (Strong Buy) just raised full year guidance for the second time this year.

Nutrisystem is famous for weight loss programs including Nutrisystem My Way, its 28-day food delivery program. Feeding on the healthy food frenzy sweeping the nation, the company’s meal choices including 100 foods which do not contain artificial preservatives or flavors.

Plans can also be customized for specialized diets, including those with Type 2 diabetes or pre-diabetes.

Another Beat and Raise

On July 29, Nutrisystem reported its second quarter results and beat the Zacks Consensus Estimate by 4 cents. Earnings were $0.41 compared to the consensus of $0.37.

Revenue rose 17% to $130.3 million as both direct and retail channels remained strong. Diret rose 15% year over year while retail grew 43%.

Gross profit margin jumped 80 basis points to 52%.

Full Year Guidance Raised

Very few companies are beating and raising this year in tough market conditions, but momentum from early in the year continued. It raised full year guidance for the second quarter in a row.

Earnings are now expected to be in the range of $0.87 to $0.97 up from its previous guidance of $0.81 to $0.91. Guidance is now up sharply from earlier in the year when the company was only looking for $0.73 to $0.83.

Zacks Bull of the Day

Zacks Reveals Best Oil Stock to Buy Now

The top dogs in the oil business, Chevron, BP and Exxon have been taking a beating lately with crude oil prices in the $40 per barrel range but no need to feel sorry for them, they haven’t switched to driving Yugo’s. Yeah, they’re still making money but it’s a bit tougher for the average investor to cash in with oil stocks, unless you can think a little differently. Dave Bartosiak has a better idea.

I get the question “What are the best oil stocks to buy?” all the time. Recently I’ve been asked that more and more as oil continues to drop. For some reason Americans love oil. Even more, they love oil stocks. We’ve been pounded over the head so much with “peak oil” theories and talk of oil going up forever that the thought of a new paradigm in oil prices is just beyond us.

Don’t think that the bottom for oil is in. There is new supply coming online daily, a weak Chinese currency isn’t going to help, and neither will changes on the demand side of the equation. If you’re looking to pick that bottom, good luck. The problem with trying to pick bottoms is you can only be right once, but you can be wrong a lot of times.

 


See full post from Dave

Picking Stock Market Winners the Easy Way

Picking winners in the Stock Market can be confusing, complex and time intensive sometimes but here’s a system that isn’t really new but it can get you moving in the right direction.

Every week the government and other entities release economic reports that cover all areas of the economy – from retail sales to housing, to international trade to consumer sentiment.

In fact, on virtually any given day there could be anywhere from one to a handful of reports.

And while the financial media does cover them, they usually focus on headline numbers without doing a deeper dive.

This is unfortunate because within these reports often exists money-making details that can quickly be uncovered with just an extra few minutes of reading.

For example, in the Employment Situation report, it details what sectors saw the most new jobs or labor force expansion, and which ones contracted.

I can remember countless times where that report got me into the right sectors and industries at the right time before anybody else was talking about them.

In fact, I still remember getting into housing in early 2012 while everybody else was staying as far away from it as possible. But, after seeing construction jobs continue to rise in report after report after report, I knew the housing market had turned. And that was one of the first alerts to the housing recovery – for those who knew where to look.

But the headline number and the obligatory one-or-two-sentence write ups on many news sites missed the best part of the story by not going the extra mile (or paragraph).

Well here we are again, with more stock-picking insight, straight from last week’s Employment Situation report. Last week it showed that some of the biggest job creation came from these three industries:

1) Retail Trade +36,000
(up 322,000 over the past year)

2) Food Services and Drinking Places +29,000
(up 376,000 over the past year)

 

Zacks employment strategy

Oil and Gas Stocks Best Bets

Oil stock prices continued heading south but one investor is betting big time on gas futures, spending about $1 Billion for just over 19 million shares. 

It was a week where oil prices tumbled to their lowest close in more than 4 months but natural gas futures gained for the first time in 3 weeks. On the news front, the top story came from billionaire investor Carl Icahn’s 8.18% stake buy in natural gas exporter Cheniere Energy Inc.

Overall, it was a mixed week for the sector. While West Texas Intermediate (WTI) crude futures dived 6.9% to close at $43.87 per barrel, natural gas prices gained 3% to $2.80 per million Btu (MMBtu). (See the last ‘Oil & Gas Stock Roundup’ here: Crude Slump Batters Exxon, Chevron Profits.)

Oil prices extended their losing streak and fell for the sixth straight week, the backdrop being another increase in the number of crude-directed rigs. An upwardly moving rig count has underlined concerns about an expansion in the commodity’s global supply glut. The recent turn of events in Greece, Iran and China also created pressure. Finally, a stronger dollar has made the greenback-priced crude more valuable for investors holding foreign currency.

Meanwhile, natural gas fared much better amid predictions of strong summer cooling demand with majority of the central and southern U.S. reeling under extreme heat. The U.S. Energy Department’s weekly inventory release – showing a smaller-than-expected increase in the commodity’s supplies – also helped to push up prices.

Recap of the Week’s Most Important Stories

1.    Shares of Houston-based natural gas company Cheniere Energy Inc. jumped more than 8% following the announcement that Carl Icahn has taken a 8.18% stake in the company. The activist investor spent slightly more than $1 billion to accumulate 19.4 million shares of Cheniere Energy.

 

Zacks comments on Oil & Gas

 

Zacks 3 Top Breakout Stocks

Finding stocks with a clear long term upward pattern is pretty exciting for most investors and Zacks shows three stocks that you can invest in right now. You can ride the on going momentum now and/or short the stocks at a later time. See the full article at Breakout Stocks

Bull and Bear of the Day by Zacks

NYSE on Wall Street

NYSE on Wall Street (Photo credit: Wikipedia)

Zacks Equity Research highlights Weyerhaeuser Co. (NYSE:WY) as the Bull of the Day and NYSE Euronext, Inc.’s (NYSE:NYX) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Brinker International, Inc. (NYSE: EAT ), Darden Restaurants Inc. (NYSE: DRI ) and Ruby Tuesday Inc. (NYSE: RT ).

Full analysis of all these stocks is available at http://at.zacks.com/?id=2678.

Here is a synopsis of all five stocks:

Bull of the Day:

We have upgraded our recommendation on Weyerhaeuser Co. (NYSE:WY) from Neutral to Outperform based on the high growth the company has achieved, reducing total costs and increasing prices. Also, the company is making an earnest effort to reduce its debt and maintain a healthy debt to equity ratio.

The company’s earnings increased a whopping 83% year over year in the third quarter to $0.22 per share. The sales also soared 12.9% year over year to $1,772 million. Operating profits escalated 102% and long-term debt decreased 7.9% year over year. Backlog for Real Estate remains solid.

Our long-term Outperform recommendation on the stock indicates that it will beat the broader U.S. market over the next six to twelve months. Our target price is $32.00 based on 2012 P/E of 68.1x.

Bear of the Day:

NYSE Euronext, Inc.’s (NYSE:NYX) third quarter earnings breezed past the Zacks Consensus Estimate but plunged year over year based on weak volumes and pricing across trading venues, which led to a reduced top line and lower operating margin. A low cash position and high debt raised the concerns of rating agencies.

NYSE has a bigger debt burden compared to its prime peers, which poses a competitive threat to the fundamental growth of the company. Higher debt and lower working capital in the first half of 2012 also impelled ratings agency S&P to downgrade its outlook to negative from stable, in August 2012.

Our six-month target price of $22.00 equates to about 11.7x our earnings estimate for 2012. With an annual dividend of $1.20, this price target implies a negative total return of 6.9% over that period. This is consistent with our long-term Underperform recommendation on the shares.

Latest Posts on the Zacks Analyst Blog:

CEO Transition for Brinker

Doug Brooks, the Chief Executive Officer (CEO) and President of Brinker International, Inc. (NYSE: EAT ) recently announced his intention to step down from the post effective December 31, 2012. Concurrently, the company also announced Wyman Roberts as his successor, who will take over the reins effectively from January 1, 2013.

Doug Brooks joined Brinker 35 years ago as a manager. His tenure oversaw the increase from a modest three restaurants in one state to 1,585 restaurants globally, generating around $2.8 billion of revenue annually. To ensure a successful transition of leadership to Roberts, Brooks will continue to serve as chairman of the board of the company through December 2013.

Wyman Roberts has been associated with Brinker since August 2005. Currently, he is the President of Brinker’s brand Chili’s Grill & Bar. However, he will retain this position along with the new responsibilities. He has previously served Brinker as Chief Marketing Officer and President of Maggiano’s Little Italy brand.

Prior to joining Brinker, Roberts served NBC’s Universal Parks & Resorts as Executive VP and CMO and contributed to growth of the company’s market share and revenues. Apart from this, he has held several senior level positions over 17 years at Brinker’s peer company – Darden Restaurants Inc. (NYSE: DRI ) .

With his vast know-how and expertise over 20 years in the restaurant industry, Roberts can easily be tagged as a veteran in this sector. With  proven strategy development, operation, finance and brand building background, we expect him to provide meaningful support to Brinker. Roberts’ contribution to growth of Chili’s Grill & Bar has been noteworthy. Total sales at Chili’s Grill & Bar restaurant surged 2.7% year over year in the most recent quarter and comparable restaurant sales at the brand climbed up 2.8% for the sixth consecutive quarter.

As a point of reference, several restaurant peers of Brinker have recently seen significant management changes. The founder and CEO of Ruby Tuesday Inc. (NYSE: RT ) , Sandy Beall, announced his intention to bow out from management and the Board.

Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.

About the Bull and Bear of the Day

Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.

About the Analyst Blog

Updated throughout every trading day, the Analyst Blog provides analysis from Zacks Equity Research about the latest news and events impacting stocks and the financial markets.

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 analyst 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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It’s a story that’s not new because we’ve all heard it so many times before over the years. Only the names have changed. New guy takes over the top spot in the company. Results are nothing to write home about or brag about at the golf course, but top guy still gets super achiever raises. Any manager below him would have been fired  a long time ago, or money taken out of his check for poor performance. Where’s the justice?

Let’s hear it for the corporate boss who gets a 20% raise — or maybe 88%, depending how you count — when his company lost shareholders 6.4% for the year, saw returns trail the S&P 500 by 8.5 percentage points, and has seen returns trail its industry by 12 points over the last three years.

This man of steel — whose compensation can withstand the slings and arrows of muddled performance — is none other than the chairman and chief executive of steelmaker Nucor (NUE), Daniel R. DiMicco. According to the proxy filed this morning, DiMicco’s total compensation rose to $8.1 million for 2011, from $6.8 million in 2010. The biggest chunk of that change came from his cash bonus, which rose to $1.5 million from $540,000.

That’s using the standard compensation calculation required by the Securities and Exchange Commission. But like many companies chafing at the comp-disclosure bit, Nucor offers an “alternative” calculus —  and one that is even more eye-opening: By Nucor’s measure, DiMicco’s 2011 pay rose a whopping 88% over the prior year, to $5.3 million from $2.8 million. (The chief difference between the two measures is that the “alternative” attempts to exclude “compensation that may possibly be earned but is not guaranteed” by ignoring options and reducing the stock-award value by some voodoo the company doesn’t explain very clearly.)

 Shareholders, meantime, would have done better to invest in just about any major stock index during 2011 (the period covered by the proxy). The one place shareholders would have done worse, on a total-return basis, is the rest of the steel industry, and we do have to give Nucor some credit here. Nucor outstripped the steel industry by 28 points in 2011, after trailing it by 9 points in 2010 and by 107 points in 2009. DiMicco has run the company since 2000, and has been chairman since 2006; looking over the past three, five and 10 years, the company’s total return has trailed the steel industry’s by between 5 and 12 percentage points, and the S&P 500 by even more.
The shareholders of  this company would have been a lot better off by spreading the risk into other investments. Get #1 Strong Buy Picks from Zacks
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