2014

The Zacks Analyst Blog Highlights:Wal-Mart Stores, Korn/Ferry International, Robert Half International, Cross Country Healthcare and CTPartners Executive Search

CHICAGO, Dec. 31, 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 the Wal-Mart Stores Inc. (NYSE: WMT-Free Report), Korn/Ferry International (NYSE: KFY-Free Report), Robert Half International Inc. (NYSE: RHI-Free Report), Cross Country Healthcare, Inc. (Nasdaq: CCRN-Free Report) and CTPartners Executive Search Inc. (AMEX: CTP-Free Report).

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

Here are highlights from Monday's Analyst Blog:

Wal-Mart Targets Affluent Chinese

According to Financial Times, Wal-Mart Stores Inc. (NYSE: WMT-Free Report) is geared to expand its Sam's Club stores in the fastest growing economy of the world, China.

The supermarket chain has retuned its business strategy and is now targeting the more affluent customers to drive higher sales in the subcontinent. Wal-Mart plans to focus mainly on its Supercenters and Sam's Club stores, and has undertaken a major remodeling plan that includes revamping about 45, 55 and 65 stores in 2013, 2014 and 2016, respectively.

In Oct 2013, Wal-Mart announced its plans to open more than 100 facilities in China between 2014 and 2016, which will create approximately 19,000 retail jobs.

During the same time, Wal-Mart also announced plans to aid the urbanization of the tier-two, tier-three and tier-four cities of China. The company will thus be able to create demand for its goods while serving the customers better. Moreover, Wal-Mart will be able to lower its cost of sales by utilizing the cheap labor in the country.

China is a strategic market for Wal-Mart as the global chain is facing difficult retail environment in the U.S. Wal-Mart entered China in 1996 with its Supercenter and Sam's Club outlets in Shenzhen. However, it has not been able to gain market share in the country, as it is facing stiff competition from several local players.

Although the low-price business model was a big hit in the U.S., the retailer has not been able to gain firm footing in the Chinese market as consumers look for cheaper deals online and in local retail shops. Wal-Mart is facing difficult retail conditions in the country following the recent slowdown of the economy's growth. Moreover, amid several legal issues, the grocery giant had to part ways with its Indian joint venture partner, Bharti Enterprises.

However, recent trends show that affluent customers in China prefer the outskirt locations of Sam's Club, rather than its supermarket stores. Currently, Wal-Mart operates 10 stores in the country and plans to open two Sam's Club locations every year from 2014. Sam's Club earns revenues mostly from its membership fees rather than sales. Moreover, Sam's Club shelves items which the local stores in China do not. The imported items are of great demand in the country.

Wal-Mart currently carries a Zacks Rank #3 (Hold).

Korn/Ferry: Strong Buy

Zacks Investment Research upgraded Korn/Ferry International (NYSE: KFY-Free Report) to a Zacks Rank #1 (Strong Buy) on Dec 28. Better-than-expected earnings and revenues and improved margins in the second quarter of fiscal 2014 led to the upgrade.

Why the Upgrade?

On Dec 4, this staffing firm reported better-than-expected second quarter of fiscal 2014 (ending Oct 31, 2013) results. Adjusted earnings of 41 cents per share exceeded the Zacks Consensus Estimate of 34 cents by 20.6% and also grew 64% year over year from 25 cents owing to strong fee revenues and solid margin expansion.

Korn/Ferry's sales increased 20.2% year over year and also beat the Zacks Consensus Estimate by 5.2%. The revenue increase reflects a 23% year over year rise in fee revenue. Fee revenues increased 8% on a constant currency basis. The overall fee revenue increase was driven by fee revenue growth in the life science/healthcare, industrial, technology and financial services sectors.

The company posted an adjusted EBITDA margin of 15.4% in the second quarter versus 12.5% a year ago and 14% in the prior quarter, reflecting constant and solid growth in the company's revenues. Adjusted operating margin was 10.6%, higher than 9.3% in the prior-year quarter, owing to lower general and administrative expenses.

Despite an underperforming economy, Korn/Ferry has emerged as a winner. It helps its clients by linking their business and talent acquisition strategies.

Like its peer Robert Half International Inc. (NYSE: RHI-Free Report), Korn/Ferry recently unveiled its evolved brand expression, which includes a new logo, brand platform and multimedia creative campaign. The new logo and brand have been designed to create a leading talent consulting organization. Korn Ferry is introducing the brand through an all-new corporate website, kornferry.com.

This staffing firm witnessed sharp upward estimate revisions after announcing its second quarter fiscal 2014 results. Most of the estimates for fiscal 2014 and 2015 increased over the past 30 days. The Zacks Consensus Estimate for fiscal 2014 increased 5.1% while that for fiscal 2015 went up 1.8% over the same time frame.

Other Stocks to Consider

Other players worth considering in the staffing industry include Cross Country Healthcare, Inc. (Nasdaq: CCRN-Free Report) and CTPartners Executive Search Inc. (AMEX: CTP-Free Report), both with a Zacks Rank #2 (Buy).

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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