Michael Kors, 3D Systems, Lennar, KB Home and D.R. Horton highlighted as Zacks Bull and Bear of the Day

CHICAGO, Aug. 23, 2013 /PRNewswire/ -- Zacks Equity Research highlights Michael Kors (NYSE: KORS-Free Report) as the Bull of the Day and 3D Systems (NYSE: DDD-Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis ontheLennar Corporation (NYSE: LEN-Free Report), KB Home (NYSE: KBH-Free Report) and D.R. Horton, Inc. (NYSE: DHI-Free Report).

(Logo: http://photos.prnewswire.com/prnh/20101027/ZIRLOGO)

Here is a synopsis of all five stocks:

Bull of the Day:

Michael Kors (NYSE: KORS-Free Report) is back to a Zacks #1 Rank after another stellar earnings report this month. While other retailers are missing their comps, lowering guidance, and generally blaming the weather for everything, this global brand is hitting its growth stride.

In fact, since March of 2012 after the company's first quarterly report following their IPO in December 2011, KORS has consistently been a #1 Strong Buy or #2 Buy and we've seen the stock rise from the mid-$40's to $70.

This earnings momentum is built on high double-digit sales growth, global expansion in branded outlets and top high-end retailers, and a wide diversity of apparel and accessories for men and women that command must-have fashion sense. They also position many of their products at more affordable price points, what the company calls "accessible luxury."

The Zacks proprietary Price & Consensus chart below shows the rapid rise in analyst earnings estimates. While it may be tempting to think that this kind of growth must eventually level off (think AAPL), most analysts believe that this brand, and management's multi-channel strategy and superior execution, have a few more good years left in them.

Bear of the Day:

3D Systems (NYSE: DDD-Free Report) is a remarkable technology company that holds many of the first patents on an amazing technology. 3-dimensional "printing" as it's called uses computer-aided design and manufacturing applications to recreate objects from a software blueprint, using special polymers to that are added in precise layers. In the industry, this technology is referred to as "additive manufacturing."

I first discovered the company in January of 2012 when a friend told me to watch a video of how one of the company's industrial-strength printers could replicate a working adjustable wrench in a few hours just from scanning its dimensions with their proprietary technology.

But then I took a look at the Zacks Rank for DDD, which dropped to a #5 Strong Sell this month. Upon further investigation, I found that the company has hit some bumpy patches in their growth story that caused at least two analysts to lower earnings estimates. The analysts are concerned about acquisition costs, sales growth execution, and R&D spending.

Net income for the reported quarter was $9.3 million or 10 cents per share, compared with $8.3 million or 11 cents per share in the year-earlier quarter. Although the absolute earnings increased year over year, it declined on a per share basis due to higher number of shares outstanding for the reported quarter.

Additional content:

July Existing Home Sales Up

With the recent improvement in economic conditions and the housing market in general, mortgage/interest rates are edging upwards to more normalized levels since May 2013. According to the Freddie Mac mortgage survey, the 30-year fixed mortgage rate has risen from 3.59% on May 23 to 4.40% as of Aug 15. In fact, mortgage interest rates are at the highest level in two years.

This has raised concerns among some analysts. High interest rates dilute the demand for new homes, as mortgage loans become expensive. This lowers a buyer's purchasing power. Moreover, if the Federal Reserve scales back its current $85 billion bond buyback program and instead adopts a tighter monetary policy, as planned, interest rates could shoot up further. This in turn would lower revenues and profits of for homebuilders.

However, another group of analysts believe that interest rates are still below historical levels despite the recent hike and housing is still very much affordable. Home prices have also started rising with market demand gaining momentum but supply remaining limited (both of existing and new homes).

In fact, this group of analysts believes that rising home prices and thinning home inventories have created a sense of urgency among homebuyers to buy a house before prices or mortgage rates shoot up further.

Rising interest rates notwithstanding, some companies like Lennar Corporation (NYSE: LEN-Free Report) and KB Home (NYSE: KBH-Free Report) have witnessed increasing demand in all their housing markets in the past quarter and were able to push pricing further.

However, others showed some concern. D.R. Horton, Inc. (NYSE: DHI-Free Report) noted at its fiscal third-quarter conference call that the spike in interest rates have slowed orders.

Get today's Zacks #1 Stock of the Day with your free subscription to Profit from the Pros newsletter:

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.

About Zacks

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.

Get the full Report on KORS - FREE

Get the full Report on DDD - FREE

Get the full Report on LEN - FREE

Get the full Report on KBH - FREE

Get the full Report on DHI - FREE

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.

Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
support@zacks.com
http://www.zacks.com

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.



RELATED LINKS
http://www.zacks.com

More by this Source

Best of Content We Love 2014 


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

 

PR Newswire Membership

Fill out a PR Newswire membership form or contact us at (888) 776-0942.

Learn about PR Newswire services

Request more information about PR Newswire products and services or call us at (888) 776-0942.