Spartan Stores, GlaxoSmithKline, Barclays, JPMorgan Chase and Deutsche Bank highlighted as Zacks Bull and Bear of the Day
CHICAGO, March 17, 2014 /PRNewswire/ -- Zacks Equity Research highlights Spartan Stores (Nasdaq: SPTN-Free Report) as the Bull of the Day and GlaxoSmithKline (NYSE: GSK-Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis onBarclays PLC (NYSE: BCS-Free Report), JPMorgan Chase & Co. (NYSE: JPM-Free Report) and Deutsche Bank AG (NYSE: DB-Free Report).
Here is a synopsis of all five stocks:
Spartan Stores (Nasdaq: SPTN-Free Report) is the Bull of the Day on St. Patrick's Day, 2014. I selected SPTN not only because of its Zacks Rank #1 (Strong Buy) but also because I can work in plenty of "green" puns and musical references. This is, after all, the day for the Irish they are identified with the color green and plenty of music!
Johnny Cash had a wonderful hit back in the 60's with Forty Shades of Green ... not at all to be confused with the tawdry "50 Shades of Grey", or for that matter the few shades of green that Spartan Stores uses.
Spartan Stores, Inc. operates as a grocery distributor and retailer principally in Michigan and Indiana. The operate 375 independent grocery stores and 97 corporate-owned stores, as well as offering approximately 3,900 private brand grocery and general merchandise items.
The Retail segment operates 97 retail supermarkets in Michigan under the Glen's Markets, Family Fare Supermarkets, D&W Fresh Markets, VG's Food and Pharmacy, and Valu Land names - and I have a personal favorite Glen's that is located in Charlevoix MI. The company was founded in 1917 and is headquartered in Grand Rapids, Michigan.
Over the last year, SPTN has delivered four straight beats. In surpassing the Zacks Consensus Estimate in each quarter, the market has no done the stock any favors. "You'd think she was queen of the land" with those beats that average a positive earnings surprise of 20%. But the market barely moved the stock, and in fact sent it lower two times in the sessions immediately following earnings report.
GlaxoSmithKline (NYSE: GSK-Free Report) is the Bear of the Day on St. Patrick's Day, 2014. I selected GSK not only because of its Zacks Rank #4 (Sell) but also because it is based in England, the long standing thorn in the side of the Irish.
Normally the Bear of the Day is a Zacks Rank #5 (Strong Sell) stock. I took a little liberty today on GSK as it is only a #4, but seeing as its St. Patrick's Day, I will also make sure that I easy on the maker of Valtrex.
GlaxoSmithKline makes drugs and health care products. GlaxoSmithKline plc was founded in 1935 and is headquartered in Brentford, the United Kingdom.
Over the last three quarter, GSK has seen two misses of the Zacks Consensus Estimate and one beat. The issue is really more about how the misses are both 5% or more negative earnings surprises. The beat, was only 2.2%.
Over the last year or so the Zacks Consensus Estimate for GSK has been moving lower. Starting in April of last year, the 2014 Zacks Consensus Estimate moved from $4.03 to $3.87 four months later. By the start of the new year, the estimate had dipped to $3.76 and is now $3.68.
The 2015 Estimate has also slid from $4.38 in April to the present level of $3.99.
The maker of Paxil might want to supply it to shareholders who are seeing this disturbing trend.
Barclays to Overhaul Investment Banking Arm
Facing the ire of investors for increasing its 2013 bonus pool after reporting lower profits, Barclays PLC (NYSE: BCS-Free Report) is planning to streamline its Investment Banking segment to improve profitability. This was first reported by The Financial Times on Thursday.
Barclays has already started the review of its Investment Banking division, which is expected to be completed in the next few months. This is likely to lead to more job cuts as well as departure of the unit's co-heads – Tom King and Eric Bommensath. However, Barclays denied any changes at the executive level in its Investment Banking unit.
Last month, during the earnings conference call, Antony Jenkins, Barclays ' CEO announced the reduction of nearly 12,000 jobs, out of which 400 were in the Investment Banking segment. The cuts were announced to mitigate the company's lower profits amid tougher regulations and sluggish economic recovery.
However, Barclays increased the overall bonus pool by 10% to £2.4 billion in 2013. Further, bonus pool for the Investment Banking division rose 13% to £1.6 billion, despite the segment reporting a 37% year-over-year fall in profit before tax.
The rise in bonus pool in spite of decreased profits angered investors, who questioned the feasibility of such a move. Notably, the CEO tried to justify the rise by stating that the decision was taken to stop attrition among investment managers.
Further, Barclays' share price has declined nearly 9.8% since the earnings release on Feb 12. Additionally, the Zacks Consensus Estimate for 2014 fell 3% to $1.95 over the last 30 days.
We believe that stringent regulations and weak trading in fixed income have led to increased pressure on returns from Investment Banking segment. Additionally, in 2013, fixed income commodity currency (FICC) income fell 17% to £5.5 billion.
Further, major global banks like JPMorgan Chase & Co. (NYSE: JPM-Free Report) and Deutsche Bank AG (NYSE: DB-Free Report) anticipate the slump in fixed income to continue into this year. Given this scenario, Barclays' plan to review and streamline its Investment Banking segment will likely boost profits going forward.
Currently, Barclays carries a Zacks Rank #3 (Hold).
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