CHICAGO, Dec. 2, 2013 /PRNewswire/ -- Zacks Equity Research highlights Alliance Fiber Optic Products (Nasdaq: AFOP-Free Report) as the Bull of the Day and Rentech Nitrogen (NYSE: RNF-Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis onthe Universal Technical Institute, Inc. (NYSE: UTI-Free Report), Ford Motor Co. (NYSE: F-Free Report) and Harley Davidson (NYSE: HOG-Free Report).
Here is a synopsis of all five stocks:
Alliance Fiber Optic Products (Nasdaq: AFOP-Free Report) was profiled back on August 2, and since that time, the stock rose as much as 45%, but has fallen all the way back to the original price. The ride isn't over for this fiber optic play and it is again the Bull of the Day as a Zacks Rank #1 (Strong Buy).
Back in July I wrote about my "Best Tech Stocks For 2nd Half of 2013" and I discussed the idea of more devices coming soon and how they will create demand for more bandwidth. Since then, there have been several publications stating the same thing. What the others were missing is the idea that those devices will all drive the need for more bandwidth from the carriers.
AFOP designs and manufactures components, modules, and subsystems that empower dynamic optical network, and facilitates the migration of fiber optics from the long haul through the last mile. That is all industry jargon for they make a fiber optic connection to your business or home a reality.
The most recent quarter was viewed by Wall Street as a beat of two cents. Zacks has the quarter and the two before it as a meet.
A key input in the process of making nitrogen is natural gas. As the cost of that input rises, the bottom line can be impacted. Since April, the price of natural gas moved from $4.40 to $3.30 in August and has recently moved back towards $4.00. The recent increase in price could be influencing analyst estimates.
Rentech Nitrogen Partners makes nitrogen fertilizer products. Its products include ammonia, urea ammonium nitrate, liquid and granular urea, nitric acid, carbon dioxide, ammonium sulfate, sulfuric acid, and ammonium thiosulfate. The company is based in Los Angeles, California. Rentech Nitrogen Partners is a subsidiary of Rentech Nitrogen Holdings
Over the last year, RNF has missed the Zacks Consensus Estimate in all four quarters. Most of the misses have been large, with the most recent quarter coming in three cents below expectations. The miss translated into a negative 13% earnings surprise, and that was the best quarter of the year. The other surprises were -33%, -29% and -17%.
Is Universal Technical Poised to Beat?
Universal Technical Institute, Inc. (NYSE: UTI-Free Report) is set to report fourth-quarter and fiscal 2013 results on Dec 3. Last quarter, the automotive training school beat the Zacks Consensus Estimate of breakeven earnings by a penny. Let's see how things are shaping up for this announcement.
Factors to Consider This Quarter
The company's enrollments have been trending down consistently over the past few quarters as a result of macroeconomic headwinds; sluggish demand due to prospective students' reluctance in taking loans and continued challenges in obtaining student financing; changing regulatory requirements; increased price sensitivity and affordability concerns; and increased competition. The company works closely with leading original equipment manufacturers in the automotive, diesel, motorcycle and marine industries such as such as, Ford Motor Co. (NYSE: F-Free Report), Harley Davidson (NYSE: HOG-Free Report) and many more.
However, new student starts improved sequentially in the third quarter due to improving demand. Though the macro challenges continue, the auto/transportation market is rebounding which combined with the aging workforce is increasing market demand for skilled auto technicians. Accordingly, the company witnessed improved student applications in the quarter.
New student starts are expected to grow in the mid-high single-digit range in the fourth quarter (as inquiries and applications improve) but remain flat in the first quarter of 2014.
Moreover, the company is pushing hard to manage costs and improve marketing and operating efficiency to counter the sluggish student enrollment environment. These efforts have led to sequentially improved profits in the second and third quarters and are expected to generate further improvement in the fourth quarter.
Our proven model does not conclusively show that Universal Technical is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here, as you will see below.
Zacks ESP: The Zacks ESP is 0.00%.
Zacks Rank: Universal Technical's Zacks Rank #3 (Hold), when combined with 0.00% ESP, makes surprise prediction difficult. We caution against stocks with Zacks Ranks #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.
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.
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.
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.
Zacks Investment Research
800-767-3771 ext. 9339
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.
SOURCE Zacks Investment Research, Inc.