The Zacks Analyst Blog Highlights: ManpowerGroup, PVR Partners, Atlas Energy, Crestwood Midstream Partners and MPLX
CHICAGO, Feb. 20, 2013 /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 ManpowerGroup (NYSE: MAN), PVR Partners L.P. (NYSE: PVR), Atlas Energy, L.P. (NYSE: ATLS), Crestwood Midstream Partners LP (NYSE: CMLP) and MPLX L.P. (NYSE: MPLX).
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Here are highlights from Tuesday's Analyst Blog:
Manpower Upgraded to Outperform
On Feb 13, 2013, Zacks Investment Research upgraded ManpowerGroup (NYSE: MAN) to a Zacks Rank #1 (Strong Buy). The company has amassed a solid return of roughly 24% over the past one year.
Why the Upgrade?
Manpower has been witnessing rising earnings estimates on the back of better-than-expected fourth-quarter 2012 results, buoyed by effective cost management and better gross margin. The company declared impressive results on Jan 30, 2012, wherein earnings of 91 cents a share surpassed the Zacks Consensus Estimate of 77 cents by 18.2%.
This global leader in the employment services industryhas outperformed the Zacks Consensus Estimate for 17 straight quarters by an average of 61.9%. The long-term expected earnings growth rate for the stock is 7.4%.
Total revenue of $5,202.6 million also came ahead of the Zacks Consensus Estimate of $5,140 million but fell 5.1% year over year. However, we observe that the rate of decline in total revenue decelerated from 10.5% witnessed in the third quarter of 2012.
Manpower is now contemplating on exiting lower margin business and venturing into high margin business. The company is also focusing on controlling expenses. On the other hand, the ManpowerGroup Solutions business sustained its growth momentum.
The demand for the counter-cyclical outplacement services portrayed signs of steadiness, which increased 16% during the fourth quarter of 2012. Canada, U.K., China and India, all contributed to the company's growth story.
The Zacks Consensus Estimate for 2013 rose 4.1% to $3.07 per share over the last 30 days. For 2014, the Zacks Consensus Estimate advanced 8.3% over the same timeframe to $3.66 per share.
PVR Downgraded to Underperform
On Feb 14, 2013, we downgraded our recommendation on PVR Partners L.P. (NYSE: PVR) to Underperform from Neutral. The partnership currently has a Zacks Rank #5 (Strong Sell).
Reasons for Downgrade The combined negative impact from PVR Partners' over-reliance on a limited group of customers, and greater dependence on third party service-providers for receiving and supplying gas and natural gas liquids (NGLs) to its customers forced the downward revision. In addition, possibilities of switching to emission-free resources from coal, lower commodity prices and weak coal market conditions also compelled this revision.Causes for Concern PVR Partners' over-dependence on a limited group of customers for its coal royalty and natural gas midstream revenue is a risk to its future performance. If any of these customers become insolvent or fail to keep their commitment, the partnership's financial results will be significantly affected.
PVR Partners is also witnessing challenges from third-party service providers in terms of receiving and supplying gas and NGLs. Sometimes, capacities of the interconnecting pipelines get affected due to pipeline testing and repairing, and reduction in operating pressure. These could also restrict revenues.
In addition, we are cautious about regulatory intervention to minimize greenhouse gas emissions. Shift of electric power generators to other sources of fuel or substituting the use of coal with natural gas or renewable energy, could affect the ability of PVR Partners' lessees to sell the coal they produce, thus reducing coal royalty revenues.
Other Stocks to Consider Other stocks in the energy sector that are currently performing well include Atlas Energy, L.P. (NYSE: ATLS), Crestwood Midstream Partners LP (NYSE: CMLP) and MPLX L.P. (NYSE: MPLX). All 3 carry a Zacks Rank #1 (Strong Buy).
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