2014

Xoom, Ralph Lauren, Caterpillar, Deere and Joy Global highlighted as Zacks Bull and Bear of the Day

CHICAGO, June 13, 2014 /PRNewswire/ -- Zacks Equity Research highlights Xoom Corporation (Nasdaq: XOOM-Free Report) as the Bull of the Day and Ralph Lauren (NYSE: RL-Free Report)  as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Caterpillar Inc. (NYSE: CAT-Free Report), Deere & Company (NYSE: DE-Free Report) and Joy Global Inc. (NYSE: JOY-Free Report).

Here is a synopsis of all five stocks:

 

Bull of the Day:

Think of companies that changed their industries with disruptive technology. Certainly Apple, Google and Netflix immediately come to mind. And there are hundreds of tech entrepreneurs and their VC backers hoping they are running the next game-changing start-up.

A few smart people believe Xoom Corporation (Nasdaq: XOOM-Free Report) is a classic disrupter in the electronic money transfer business, ready to steal market share from Western Union. Xoom provides payment services which consist of cash pickup, bank deposits and home delivery, sending money online directly to bank accounts and receiving money in local currency or US dollars. The company offers services through xoom.com and walmart.com over the Internet, mobile devices or tablet.

One those smart folks who likes XOOM is Mario Cibelli, founder of the small cap investment firm Marathon Partners. His name has an odd ring to it, doesn't it? In fact, Cibelli, who was featured in the May 26 edition of Barron's, got his start in stock picking after college with Mario Gabelli of Gamco Investors. More on Cibelli in a moment.

Zacks Rank followers know this industry has been full of money with highly ranked stocks like Heartland Payment and Alliance Data Systems delivering doubling returns in the past 18-24 months. The bigger companies like Alliance Data, and Visa of course, have the enterprise business wrapped up where large-scale, robust technology is king.

Bear of the Day:

The steady decline in shares of Ralph Lauren (NYSE: RL-Free Report) has had a single, constant precedent in 2014: steadily declining EPS estimates. Followers of the Zacks Rank know this because the stock has earned either a #4 Sell or #5 Strong Sell Rank consistently all year.

I doubt that RL branded fashion has lost much appeal among its affluent devotees. But maybe some competition from Michael Kors has nibbled away at the franchise. I won't speculate further on the business of RL, suffice to say I have been a KORS investor for over a year now for their global growth opportunities.

Here's a visual on the analyst downward estimate revisions courtesy of the Zacks proprietary Price & Consensus chart. I looked back at the historical Rank from 2013 and there were many months where the stock held the #4 or #5 Rank on either side of its zenith near $190 warning investors that the growth momentum was slowing.

RL may be a value now to some investors at 17.5X next year's $9.92 consensus. But, of course, those estimates are always in danger of coming down further. When they start getting revised higher, the Zacks Rank will tell you. Until then, it's probably best to stay on the sidelines with this gentleman of fashion.

Additional content:

Caterpillar Ups Quarterly Dividend

Staying committed to its focus on delivering incremental returns to shareholders, the board of directors of Caterpillar Inc. (NYSE: CAT-Free Report) has approved a 17% increase in its quarterly dividend, the highest percentage increase since 2010. The hike also reflects its balance sheet strength.

Caterpillar will now pay 70 cents per share to its shareholders every quarter, 10 cents more than the prior dividend of 60 cents per share. The increased dividend will be paid on Aug 20, 2014, to shareholders of record as of Jul 21, 2014. The current dividend hike comes exactly after a year. The last dividend hike of 15% from 52 cents to 60 cents was announced in June 2013.

Caterpillar follows the likes of its competitors Deere & Company (NYSE: DE-Free Report) and Joy Global Inc. (NYSE: JOY-Free Report), both of which had announced dividend hikes in May this year. Deere upped its quarterly dividend by 9 cents or 18% to 60 cents per share, marking the 12th consecutive year of dividend raise for the company. Joy Global had announced a 14% jump in the quarterly dividend rate to 20 cents per share from the previous rate of 17.5 cents.

With the increased dividend, Caterpillar's dividend yield will go up from the current 2.21% to 2.58%, close to Deere's 2.60% and double of Joy Global's 1.30%. At current levels, Caterpillar's 5 year average dividend yield of 2.25%, 5 Year Dividend Growth Rate of 6.70% and Payout Ratio of 38.97% are above the industry average of 1.98%, -4.44% and 14.27% respectively.

Despite weakness in its mining-related sales, Caterpillar returned over $5 billion to shareholders through share repurchases and dividends since 2013 till the first quarter of 2014. In the first quarter, Caterpillar repurchased approximately $1.7 billion of its common stock under an accelerated stock repurchase transaction completing its $7.5 billion repurchase authorization. In Jan 2014, its board approved a new authorization to repurchase up to $10 billion of Caterpillar common stock, which will expire on Dec 31, 2018. Share repurchases will be accretive to earnings in 2014 and provide support to the stock.

Caterpillar also delivered an impressive first quarter with earnings increasing 22% to $1.61 per share despite revenues remaining flat year over year at $13.2 billion. The company's incessant efforts to cut down costs, continued deployment of lean manufacturing initiatives and improvement in the Construction segment helped mitigate the effect of lower mining-related sales on its profits.

Get today's Zacks #1 Stock of the Day with your free subscription to Profit from the Pros newsletter:

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.

 

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Click here to subscribe to this free newsletter today.

 

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros.

 

Get the full Report on XOOM - FREE

Get the full Report on RL - FREE

Get the full Report on CAT - FREE

Get the full Report on DE - FREE

Get the full Report on JOY - FREE

Follow us on Twitter:  http://twitter.com/zacksresearch

 

Join us on Facebook:  http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

 

Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.

 

Media Contact

Zacks Investment Research

800-767-3771 ext. 9339

support@zacks.com

http://www.zacks.com

 

Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.

 

Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Logo - http://photos.prnewswire.com/prnh/20101027/ZIRLOGO

 

SOURCE Zacks Investment Research, Inc.



RELATED LINKS
http://www.zacks.com

More by this Source


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

 

PR Newswire Membership

Fill out a PR Newswire membership form or contact us at (888) 776-0942.

Learn about PR Newswire services

Request more information about PR Newswire products and services or call us at (888) 776-0942.