CHICAGO, July 3, 2013 /PRNewswire/ -- Zacks Equity Research highlights Kemper Corporation (NYSE: KMPR-Free Report) as the Bull of the Day and Kosmos Energy Limited (NYSE: KOS-Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis ontheCompanhia Energetica de Minas Gerais (NYSE: CIG-Free Report), Companhia Paranaense de Energia (NYSE: ELP-Free Report) and CPFL Energia S.A. (NYSE: CPL-Free Report).
Here is a synopsis of all five stocks:
As a result of excellent quarterly performance and improved outlook for the industry, estimates for this insurer have been on the uptrend sending the company to Zacks rank #1 (Strong Buy).
Kemper Corporation (NYSE: KMPR-Free Report)is a diversified insurance holding company with subsidiaries that provide property & casualty, health and life insurance products to individuals and small businesses. Kemper serves its customers through a network of agents as well as directly. Kemper currently has more than $8 billion in assets.
On May 2, 2013, Kemper reported its Q1 2013 results. Net income for the quarter increased 29% from Q1 2012, to $0.72 per share. Results were substantially better than the Zacks Consensus Estimate of $0.53 per share, mainly as a result of rate increases, higher than planned retention and favorable reserve development.
As a result of strong results, Zacks consensus estimate for the quarter ended June 30 now stands at $0.36 per share up from $0.31 per share, 60 days ago. The estimate for the current year is also up to $2.01 per share from $1.75 per share earlier.
Disappointing results and downbeat guidance have led to downward estimates revisions, sending Kosmos Energy to a Zacks Rank #5 (Strong Sell).
Headquartered in Hamilton, Bermuda, Kosmos Energy Limited (NYSE: KOS-Free Report) is an independent oil and gas exploration company focused on frontier and emerging areas along the Atlantic Margin. The company has production assets and other project developments offshore Ghana and exploration licenses offshore Ireland, Mauritania, Morocco and Suriname and offshore Cameroon.
On May 9, 2013, Kosmos reported it first quarter 2013 results. Net income for the quarter came in at $20 million or $0.05 per share, 3 cents short of the Zacks Consensus Estimate of $0.08 per share.
The management provided downbeat guidance for the second quarter. The company also announced a delay in implementation of a key project in Morocco.
Due to disappointing results and downbeat guidance, quarterly and annual estimates have been revised sharply downwards in the past few weeks by analysts.
CEMIG Downgraded to Underperform
Why the Downgrade? Revival from the lows experienced due to the global crisis has spurred demand for a better infrastructure and modernized agricultural equipment. This in turn has made a few industries very lucrative, including the electricity industry.
Emerging countries are progressing well on the recovery path. Talking of Brazil, electricity demand in the country is on the rise, especially when it is gearing up to host two major sporting events in the coming years. The national agency has predicted a consumption hike of about 4.5% in the 2011-2021 timeframe. Government spending has been geared up to improve the infrastructure in the electricity industry.
Despite compelling long-term growth prospects, concerns surrounding Cemig have forced us to downgrade the stock. Rising cost of services and operating expenses, governmental interference and dependence on hydro sources for electricity pose serious threat to growth. In the first quarter 2013, expenses grew by 7% year over year and offset partially the revenue increase in the quarter.
Also, denomination of a portion of loans and financings in foreign currency raises risks of higher financial expenses in the event of devaluation of the Brazilian currency for Cemig.
The Zacks Consensus Estimate for Cemig is US$1.45 per ADR for year 2013 and US$1.33 per ADR for year 2014, representing a year-over-year decline of 40.8% and 8.1% in 2014, respectively.
Other Stocks to Consider: Cemig currently has an $8.8 billion market capitalization. Other stocks to watch out for in the industry are Companhia Paranaense de Energia (NYSE: ELP-Free Report) and CPFL Energia S.A. (NYSE: CPL-Free Report), each with a Zacks Rank #1 (Strong Buy).
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