2014

The Zacks Analyst Blog Highlights: Amazon.com, Google, Apple, IAC/InterActiveCorp and Gorman-Rupp

CHICAGO, May 1, 2014 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Amazon.com Inc. (Nasdaq: AMZN-Free Report), Google (Nasdaq: GOOGL-Free Report), Apple (Nasdaq: AAPL-Free Report), IAC/InterActiveCorp. (Nasdaq: IACI-Free Report) and Gorman-Rupp Co. (AMEX: GRC-Free Report).

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

Here are highlights from Wednesday's Analyst Blog:

Amazon Opens Wearable Technology Store

The world's largest online retailer, Amazon.com Inc. (Nasdaq: AMZN-Free Report) has recently announced the launch of its wearable technology store, giving customers access to a broad selection of the most popular electronic gadgets — wearables.

The technology store offers wearable gadgets from all technology hardware makers, including Samsung, GoPro, Jawbone and others. These include smartwatches, activity trackers, healthcare devices, wearable cameras and wearable trackers for pet animals.

Additionally, the store features an online Learning Center helping consumers to get a complete idea about all the wearables available in the store and select the right product. Additionally, buyers will be able to go though descriptions and commentaries on these products at the Editor's Corner before buying.

Wearable technology has become a growing market in the past few months, with wearable applications such as remote heart-rate monitoring making a significant impact in healthcare industry. Additionally, these gadgets appeal to consumers as smart fashion accessories. Lately, several technology companies like Google (Nasdaq: GOOGL-Free Report) and Apple (Nasdaq: AAPL-Free Report) have joined the race to develop wearable technology.

According to a report from Transparency Market Research, the wearable technology market is poised to expand rapidly in the next several years. Per the report, the global wearable technology market stood at $750.0 million in 2012 and is expected to reach $5.8 billion in 2018, at a CAGR of 40.8%.

We believe the wide selection of new wearable gadgets offered at the technology store will help Amazon tap a promising market by attracting new users. This is expected to help the company garner several billion dollars in revenues annually.

We believe Amazon's heavy investments in new markets, new product categories, digital business and fulfillment centers will likely weigh on its near-term results.

Nevertheless, we commend Amazon's prospects, especially its platform approach (Kindle, Prime and AWS). We believe that Amazon is performing true to form — generating solid revenues and strong cash flow quarter upon quarter (discounting seasonal variations).

As such Amazon remains one of the leading players in the fast-growing e-Commerce market. We think that this has been possible because of the broad selection, free shipping and user experience that Amazon has consistently provided. This has enabled the company to gain from the shift from offline to online consumption.

Amazon currently retains a Zacks Rank #3 (Hold). Another stock that has been performing well and is worth considering includes IAC/InterActiveCorp. (Nasdaq: IACI-Free Report), with a Zacks Rank #2 (Buy).

Gorman-Rupp a Stock Worth Buying

Zacks Investment Research upgraded Gorman-Rupp Co. (AMEX: GRC-Free Report) to a Zacks Rank #1 (Strong Buy) on Apr 29, 2014. Going by the Zacks model, companies holding a Zacks Rank #1 have strong chances of performing better than the broader market.

Why the Upgrade?

Gorman-Rupp kept its earnings beat streak alive in first-quarter 2014, while posting a positive earnings surprise of 35.71%. The company's average positive earnings surprise for the trailing four quarters is 21.17%. A brief discussion of first-quarter 2014 results is provided below:

Earnings per share in the quarter were 38 cents, up from 26 cents recorded in the year-ago quarter and way above the Zacks Consensus Estimate of 28 cents. Sales grew 19% to $110 million on the back of healthy performance in the domestic as well as international markets. Gross margin grew by 200 basis points year over year.

Gorman-Rupp's stellar performance in the quarter induced positive reactions as evidenced by a hike in earnings estimates. In the last 7 days, the Zacks Consensus Estimate has increased by 9.4% to $1.52 for 2014 and by 6.3% to $1.69 for 2015, representing year-over-year growth of 21.6% for 2014 and 11.2% for 2015.

In the next 5 years, Gorman-Rupp promises solid earnings growth to the tune of 10% as against 7.4% recorded in the past 5 years. In the near term, the Earnings ESP for second-quarter 2014 is 0.0% while it is +2.5% for the third quarter.

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

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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.

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