Greenbrier, Yahoo!, Intel, Altera and Taiwan Semiconductor Manufacturing highlighted as Zacks Bull and Bear of the Day
CHICAGO, Aug. 29, 2014 /PRNewswire/ -- Zacks Equity Research highlights Greenbrier Companies, Inc. (NYSE: GBX-Free Report) as the Bull of the Day and Yahoo! Inc. (Nasdaq: YHOO-Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Intel Corporation (Nasdaq: INTC-Free Report), Altera Corp. (Nasdaq: ALTR-Free Report) and Taiwan Semiconductor Manufacturing Co. Ltd (NYSE: TSM-Free Report).
Here is a synopsis of all five stocks:
The Greenbrier Companies, Inc. (NYSE: GBX-Free Report) isn't a household name but this Zacks Rank #1 (Strong Buy) is in one of the hottest industries: railcars. Earnings are expected to rise double digits this year and next as the backlog expands.
Greenbrier builds railroad cars in 4 facilities in the U.S. and Mexico and also builds marine barges at its U.S. manufacturing facility. Internationally, it builds and refurbishes freight cars for the European market through its Polish operations.
It also reconditions, manufactures and sells railcar parts at 4 U.S. sites.
On July 2, it was another solid quarter for Greenbrier as it easily crushed the Zacks Consensus Estimate by 39%. Earnings were $1.03 versus the Zacks Consensus of $0.74. This was more than double the second quarter earnings of $0.50.
Third quarter gross margin jumped to 16.3% from 11.5%, well outpacing the company's guidance of a minimum of 13.5%.
It delivered 4,300 units in the quarter and received orders for another 15,600 railcars with a value of $1.65 billion.
Its backlog grew to 26,400 railcars valued at $2.75 billion. It also had a Marine backlog of $110 million.
Yahoo! Inc. (Nasdaq: YHOO-Free Report) has seen its shares lag in 2014 as investors await the Alibaba IPO. This Zacks #5 Rank (Strong Sell), however, is struggling to grow earnings with negative growth expected this year and next.
Yahoo is a leading Internet content provider and one of the top destinations on the web. It also owns about a 23% stake in the Chinese company Alibaba which is scheduled to go public in September in what will likely be the largest IPO ever.
And while Yahoo will reap the rewards from that investment, and will share that with shareholders, analysts aren't too excited about the rest of Yahoo's business right now.
On July 15, Yahoo reported second quarter results and met the Zacks Consensus Estimate of $0.30.
Analysts didn't like what they saw as display advertising price per ad declined year-over-year for the sixth consecutive quarter.
Yahoo also guided lower on revenue for the third quarter.
Intel Intros 2 Technologies for Foundry Customers
Intel Corporation (Nasdaq: INTC-Free Report) recently introduced two new technologies namely Embedded Multi-die Interconnect Bridge ("EMIB") and High Density Modular Test ("HDMT") for Custom Foundry customers in need of economical advanced packaging and test technologies.
The EMIB technology is intended for 14nm foundry customers and offers on-package functionality at a lower cost when compared to the existing solutions. On the other hand, the HDMT platform will allow quick test development and unit-level process control. It is intended for application in diverse markets. Besides improving productivity (as a result of using a common platform for low-volume product debug to high-volume production), it also lowers time to market.
While EMIB will be accessible to foundry customers for sampling in 2015, HDMT (already used by Intel internally) will be made available with immediate effect.
Based in Santa Clara, CA, Intel entered the foundry business in 2010. In the beginning, the company only offered its services to a small group of non-competitive customers. For instance, its foundry business received a boost when Altera Corp. (Nasdaq: ALTR-Free Report) became a customer in 2013.
Altera, being one of the biggest names in the market for FPGAs, or chips that can be electrically programmed for specific jobs by users after the devices have left the factory, has put pressure on the other companies providing foundry services.
Intel also lured away Panasonic Corp. from Taiwan Semiconductor Manufacturing Co. Ltd (NYSE: TSM-Free Report). Panasonic's chip division will use Intel to make system-on-chip products using Intel's 14-nanometer technology, which is the most advanced type of manufacturing process for semiconductors.
Foundry business is not that attractive for a company like Intel, which has traditionally manufactured its own devices to generate much stronger margins. But a number of factors could be driving Intel.
The most important would be the need for strong strategic partners that could help it grow position in the Internet of Things (IoT) market. Second would be the fact that it gives Intel a chance to benefit from the strong growth in mobile (Intel's mobile market share remains small). The third would be the increased utilization of its significant capacity and its corresponding positive effect on its margins.
The issue with becoming a foundry for Intel is that it gives its competitors (Qualcomm, AMD and Samsung) access to the same advanced CMOS processes that allowed it to gain such a dominating lead in the PC market. The profit margins are also not as high.
Intel currently holds Zacks Rank #1 (Strong Buy).
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