CHICAGO, June 3, 2014 /PRNewswire/ -- Zacks Equity Research highlights Gorman Rupp (AMEX: GRC-Free Report) as the Bull of the Day and American Vanguard (NYSE: AVD-Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis onPharmacyclics Inc. (Nasdaq: PCYC-Free Report), GlaxoSmithKline (NYSE: GSK-Free Report) and Johnson & Johnson (NYSE: JNJ-Free Report).
Here is a synopsis of all five stocks:
Gorman Rupp (AMEX: GRC-Free Report) has beaten the Zacks Consensus Estimate in each of the last four quarters with an impressive performance in the March 2014 quarter. Along with a fair valuation, this stock pays a small dividend and as a Zacks Rank #1 (Strong Buy), it is the Bull of the Day.
Gorman Rupp calls themselves "The Pump People" - and with good reason. The company makes and sells pumps and pump systems for use in water, waste-water, flood control, construction and petroleum industries just to name a few. Founded nearly 80 years ago by J.C. Gorman and H.E. Rupp, the company has grown from humble beginnings to 1,240 employees. GRC increased the cash divided in 2013 sustaining a record of dividend increases for 41 consecutive years and will pay the 257th consecutive quarterly divided during the second quarter of 2014.
Groman Rupp reported results for the first quarter of this year back in April and it was a strong strong quarter indeed. GRC posted EPS of $0.38, ten cents ahead of the Zacks Consensus Estimate of $0.28 for a positive earnings surprise of 35%. The company also posted revenue of $110M, $14M ahead of estimates for a 14.2% positive revenue surprise.
Before this recent strong beat, the company posted three other beats of the Zacks Consensus Estimate. The June 2013 quarter, which was reported in July of that year was a beat of $0.08 or 30% ahead of expectations. A solid revenue surprise of $12 pushed quarterly revenue to $106M that quarter and the stock moved higher by 9% in the session following the report.
American Vanguard (NYSE: AVD-Free Report) has been a Zacks Rank #5 (Strong Sell) for longer than any other current #5. It moved to a Rank #5 on March 4 of this year with the next oldest #5 being added on April 1. That is a long time without any increases to earnings estimates, and today it is the Bear of the Day.
Here at Zacks I manage the Home Run Investor portfolio of stocks. I look for small cap stocks that have great upside potential and we have found a lot of big winners. I added American Vanguard to the portfolio back on November 27 of 2012. We subsequently sold the stock about six months later on February 27 for a loss of 5.36%. The idea behind Home Run Investors is to cut your losses early, before they become big losses. A year and a half later I am looking back and I see I avoided a substantial amount of pain.
American Vanguard is a chemical company that formulates chemicals for crops, human and animal protection. American Vanguard was founded in 1969 and is headquartered in Newport Beach, California.
On the first of May, the company reported earnings for the March 2014 quarter. It was a beat of the Zacks Consensus Estimate by 4 cents of 133%. Right off the bat, you would think that is a great thing, but you need to dig a little deeper than just if a company beats estimates or not. The topline line was a major disappointment, coming in $10M below expectations or about 11% below the Zacks Consensus Estimate.
The real concern for investors was that on April 10 of this year the company guided Wall Street down due to elevated channel inventories. They said that revenues would be 33% lower than year ago levels and earnings would be break-even to a few cents per share for the quarter.
Encouraging Data on Pharmacyclics/J&J Drug
Pharmacyclics Inc. (Nasdaq: PCYC-Free Report) announced encouraging data on oncology drug Imbruvica (ibrutinib) from a phase III study (RESONATE: n=391). The study was evaluating Pharmacyclics' Imbruvica (ibrutinib) versus GlaxoSmithKline (NYSE: GSK-Free Report) and Genmab's Arzerra (ofatumumab) in patients suffering from relapsed or refractory chronic lymphocytic leukemia (CLL) or small lymphocytic lymphoma (SLL). The patients were treated at least once before for the disease which affects predominantly elderly people.
Results from the multi-center, international, open-label, randomized study, which was published in an online first edition of the New England Journal of Medicine, revealed that treatment with Imbruvica caused patients to live longer without the disease worsening compared to those in the Arzerra arm. Data revealed a 78% reduction in risk of progression or death in patients treated with Imbruvica compared to those being treated with Arzerra. The overall response rate was also found to be favorable in the Imbruvica arm.
We note that the RESONATE study was stopped early following the recommendation of an independent Data Monitoring Committee (DMC) as it had already met the trial's primary and a key secondary endpoint of progression-free survival and overall survival, respectively.
Pharmacyclics and partner Johnson & Johnson (NYSE: JNJ-Free Report) gained accelerated approval from the U.S. Food and Drug Administration (FDA) for Imbruvica in the previously treated CLL indication in Feb 2014. Full approval was sought in April for the same indication on the basis of data from the RESONATE study. Gaining the FDA nod, as far as full approval for the indication is concerned, should be a mere formality for the partners given the highly impressive data from the RESONATE study.
We remind investors that Imbruvica was approved by the FDA in Nov 2013 as a monotherapy for treating patients suffering from mantle cell lymphoma (MCL). The drug has been approved to treat MCL patients who have been treated at least once for the disease. The drug is being studied for other oncology indications as well. We expect investor focus to remain on updates regarding Imbruvica, going forward.
Pharmacyclics carries a Zacks Rank #3 (Hold).
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