ABM, Haynes International, Joy Global, Caterpillar and Astec Industries highlighted as Zacks Bull and Bear of the Day
CHICAGO, June 27, 2013 /PRNewswire/ -- Zacks Equity Research highlights ABM (NYSE: ABM-Free Report) as the Bull of the Day and Haynes International (Nasdaq: HAYN-Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis onthe Joy Global, Inc. (NYSE: JOY-Free Report), Caterpillar Inc. (NYSE: CAT-Free Report) and Astec Industries, Inc. (Nasdaq: ASTE-Free Report).
Here is a synopsis of all five stocks:
Management raised its full year guidance following its most recent beat, prompting analysts to revise their estimates higher for both 2013 and 2014. This sent the stock to a Zacks Rank #1 (Strong Buy).
Along with strong earnings momentum, ABM offers investors a solid dividend yield and reasonable valuation.
ABM Industries provides all types of facility solutions services to thousands of commercial, governmental, industrial, institutional, retail, and residential facilities located primarily throughout the United States. Around half of its revenue comes from janitorial services (52%), but it also generates revenue from parking services (13%), building & energy services (8%), security (8%) and general facility services (13%).
ABM delivered better than expected second quarter results on June 3. Adjusted earnings per share soared 20% to 36 cents per share, beating the Zacks Consensus Estimate by 3 cents.
Haynes International (Nasdaq: HAYN-Free Report) recently reported its 4th straight earnings miss as it continues to navigate through tough industry headwinds. Analysts have significantly lowered their earnings estimates for Haynes over the last several months, sending the stock to a Zacks Rank #5 (Strong Sell).
Given that valuations don't look particularly cheap for the stock at these levels, investors should consider avoiding this stock until its earnings momentum turns around.
Haynes International, Inc. develops, manufactures and markets high-performance alloys primarily for the aerospace, chemical processing and land-based gas turbine industries.
Haynes reported disappointing second quarter results on May 2. Earnings per share plummeted 58% year-over-year to 52 cents, missing the Zacks Consensus Estimate of 67 cents. It was Haynes' fourth consecutive miss.
Net revenues declined 19% to $129.2 million, which was well below the consensus of $141.0 million. President and CEO Mark Comerford noted "slowing demand in [its] aerospace engine products market as the supply chain continued its cautious buying and order entry pattern from the first quarter."
Operating income fell 57% as the operating profit margin declined from 14.5% to 7.6% of revenues.
Joy Global Lowered to Strong Sell
Zacks Investment Research downgraded Joy Global, Inc. (NYSE: JOY-Free Report) to a Zacks Rank #5 (Strong Sell).
Why the Downgrade?
Joy Global witnessed sharp downward estimate revisions after reporting mixed fiscal second-quarter results and lowered guidance. Shares of this mining major have been declining since it reported weak earnings results. Moreover, given the expected decline in earnings, we believe that it has more downside left.
On May 30, Joy Global reported second-quarter fiscal 2013 earnings per share of $1.73, lagging the year-over-year earnings by 22.4%. Results, however, surpassed the Zacks Consensus Estimate by 11.6%.
Earnings declined largely due to lower net sales, which were down 11.7% year over year. The decline was primarily due to lower contribution from Underground Mining Machinery.
Backlog slipped to $2.2 billion, dipping sequentially from $2.4 billion.
The lingering economic problems in the Euro-zone and the sluggish economic recovery in China continue to impede growth of global commodity demand. According to Joy Global, the industrial sector, which drives demand for mining equipment, is yet to benefit from the global economic recovery.
Subsequently, Joy Global trimmed the upper end of its fiscal 2013 revenue guidance to $4.9–$5.0 billion from the previous range of $4.9–$5.2 billion. The bottom line was thus revised to $5.60–$5.80, down from $5.75–$6.35.
The company's dividend yield of 1.40% also compares unfavorably with the industry average of 2.89% and another major, Caterpillar Inc. (NYSE: CAT-Free Report) with yield of 2.92%. Nonetheless, it compares favorably with Astec Industries, Inc. (Nasdaq: ASTE-Free Report) with yield of 1.19%.
The Zacks Consensus Estimate for fiscal 2013 decreased 5.3% to $5.86 per share over the last 30 days. For fiscal 2014, most of the estimates were revised downward over the same period, sinking the Zacks Consensus Estimate by 9.7% to $5.61 per share.
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