Almost Family, Weight Watchers, Wells Fargo, Assurant and HSBC Holdings highlighted as Zacks Bull and Bear of the Day
CHICAGO, March 10, 2014 /PRNewswire/ -- Zacks Equity Research highlights Almost Family (Nasdaq: cronym>AFAM-Free Report) as the Bull of the Day and Weight Watchers (NYSE: cronym>WTW-Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Wells Fargo & Company (NYSE: WFC-Free Report), Assurant Inc. (NYSE: AIZ-Free Report) and HSBC Holdings plc (NYSE: HSBC-Free Report).
Here is a synopsis of all five stocks:
Face it, the country is getting older. Demographics are changing. The Mustang Sally's are becoming little old ladies from Pasadena. Eventually there will be huge demand for nursing homes, assisted living, and adult day care. So naturally companies in this space should benefit as more and more baby boomers reach that age where they need a little extra help getting around.
Today, about 1 million Americans live in senior care facilities. That number is expected to double by 2030. Long term care facilities saw over 8 million people in 2012 alone. By any metric you measure it, demand is increasing at an impressive clip. Many companies have entered this wide open space due to the relatively low barriers to entry. Among them is our Bull of the Day.
I am usually the momentum trader that finds high flying stocks to buy high and sell higher. Today I'm going to show you another side to my trading. Today I found a stock that looks more like a turnaround story than a momentum stock. This stock was brought back to life in November and now looks like a high flier. Now the stock sets up for a conservative trade with limited downside risk as long as your stops are set properly. Given the recent volatility, this stock could also double if the earnings story continues to strengthen.
Almost Family (Nasdaq: cronym>AFAM-Free Report) is a Zacks Rank #1 (Strong Buy) that has turned things around recently. The Louisville based adult day care provider is focused on serving adults looking for alternatives to traditional nursing home placement. The company provides transportation to and from its centers which are open 7 days a week and serve about 60 patients per location.
By now, 80% of New Year's Resolutions have been broken. Those new shoes you bought to go running have been mothballed in the closet. You started to get your "money situation" in order but you stopped when you figured out you were going to owe money in taxes, so you're waiting to file. You haven't really been nicer to any of your coworkers and your dog hasn't been on a walk in weeks. Now Ash Wednesday passed and you're working on something else; Giving up McDonald's for Lent. The company that tried to get you started on your weight loss goal by giving you an easy point system to follow is our Bear of the Day.
Weight Watchers (NYSE: cronym>WTW-Free Report) is a Zacks Rank #5 (Strong Sell) trapped inside of a miscellaneous consumer services industry that ranks in the bottom 11% of our Zacks Industry Rank. In the last 30 days five analysts have revised earnings projections downwards for the current year, cutting consensus in half from 2.85 to 1.41. The price and consensus chart shows the downward sloping earnings trend since early 2012.
Last month's revision was the nail in the coffin for a stock that has seen price drop from $80 to $20 in the last two years. All this occurring in a stock market that has continually pressed forward to new highs. This is almost the exact opposite story of what had been happening for Weight Watchers in 2010. Steady earnings growth and upside revisions helped propel the stock into the stratosphere. It's amazing how earnings can shift a stock's trajectory so quickly.
Wells Fargo, HSBC to Settle Insurance Suit
Amidst the ongoing investigations and litigation issues in the banking sector by various regulators, Wells Fargo & Company (NYSE: WFC-Free Report) along with two insurance companies – Assurant Inc. (NYSE: AIZ-Free Report) and QBE Insurance Group has emerged with a legal settlement. In another similar lawsuit related to force-placed insurance, HSBC Holdings plc (NYSE: HSBC-Free Report) has also agreed to the settlement.
Wells Fargo and HSBC have decided to settle the lawsuits that accused the companies of overcharging thousands of homeowners for force-placed insurances. HSBC is expected to pay an aggregate of $32 million to settle the class-action lawsuit in Miami, while the amount to be paid by Wells Fargo and the two insurance companies was undisclosed.
Force-placed insurance is generally ordered for those homeowners who refuse to buy insurance themselves. Though the mortgage agreement gives lenders the right to force-placed insurance, the plaintiffs accused Wells Fargo and HSBC of providing high premium insurance coverage to homeowners to earn additional commission.
As per the settlement terms, Wells Fargo and the two insurance companies will pay 11% cash reimbursements to those class members who paid entire premiums on the force-placed insurance. On the other hand, HSBC homeowners will be paid 13% of the entire premium billed.
Additionally, the agreements, which still require the consent of court, ordered the banks to stop the collection of commissions related to force-placed insurance policies over a period of five to six years from the date of the settlement.
In Feb 2014, Citigroup Inc. agreed to pay an aggregate of $110 million to settle the similar class-action lawsuit in New York. However, the settlement awaits approval.
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.
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