Ubiquiti Networks, Manchester United, Cisco Systems, IBM and Hewlett-Packard highlighted as Zacks Bull and Bear of the Day
CHICAGO, Nov. 14, 2013 /PRNewswire/ -- Zacks Equity Research highlights Ubiquiti Networks (Nasdaq: UBNT-Free Report) as the Bull of the Day and Manchester United (NYSE: MANU-Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis ontheCisco Systems (Nasdaq: CSCO-Free Report), IBM (NYSE: IBM-Free Report) and Hewlett-Packard (NYSE: HPQ-Free Report).
Here is a synopsis of all five stocks:
Maybe you are not a religious reader of the Bull and the Bear of the day. Maybe this article will change that.
On May 31, 2013, UBNT was highlighted as the Bull of the Day. You can access that article via this link:
Since that article ran, UBNT is up 121%.
On August 15, I highlighted yet another earnings beat for UBNT. Bull Of the Day, August 15 2013 and since that article ran, the stock is 46%.
Ubiquiti Networks is a communications technology company, that offers a portfolio of communications networking products and solutions in the outdoor wireless, enterprise WLAN, video surveillance, wireless backhaul, and machine-to-machine communications markets worldwide.
A recent earnings report was met with exuberant buying on Wall Street. the June 2013 quarter was reported on August 8, and the following day saw the stock jump 28%!
It was the fourth beat in the row, following positive earnings surprises of 5.2%, 4.5% and 18.5%. The most recent positive earnings surprise was 15.4%.
Manchester United (NYSE: MANU-Free Report) the well-known English Football club, or soccer team as Americans would call it, was the Champion of the Premier League for 2012-13. Maybe the loss of their longtime coach has dampened the spirits of the analyst that cover the stock, but they have been moving estimates lower. Today the Red Devils stock is the Bear of the Day.
Performance on the field is one thing, but investors care more about the bottom line than the goal line. MANU has missed each of the last three quarters, reporting earnings that came in below the Zacks Consensus Estimate.
Zacks show the company missing all but one quarter over the last year and a half. The lone beat was the September 2012 quarter reported on November 14, 2012. Despite the beat, the stock traded lower in the session following the release by about 2%.
Manchester United Football Club is an English professional football club, based in Old Trafford, Greater Manchester, that plays in the Premier League. Founded as Newton Heath LYR Football Club in 1878, the club changed its name to Manchester United in 1902 and moved to Old Trafford in 1910.
Cisco Beats Earnings, Skids on Sales
Networking leader Cisco Systems (Nasdaq: CSCO-Free Report) reported fiscal Q1 2014 earnings after the bell Wednesday with a slight beat on earnings but a revenue miss of roughly $200 million in the quarter. Cisco posted EPS -- minus stock-based compensation but before non-recurring items -- of 48 cents per share, topping the Zacks Consensus Estimate by a penny and exactly what Zacks ESP had predicted. Sales, on the other hand, came in at $12.1 billion, missing the consensus estimate of $12.3 billion.
Analysts had expected the revenue number to be a high hurdle in the quarter, with a 5% company layoff announced in August which cost the company a charge of over half a billion dollars. Also, Cisco is by now so huge, and with so much business in and through the U.S. federal government, it stood to reason that the shutdown on Capitol Hill in the quarter would have some negative impact.
Further, Cisco today sees lots of competition from other tech giants such as IBM (NYSE: IBM-Free Report) and Hewlett-Packard (NYSE: HPQ-Free Report), and as such has taken strides to increase market share versus its competitors or maintain its dominance in other areas. For instance, in the routers/switchers market where Cisco holds a 70% share, the company developed, rolled out and fully bought Insieme, its software defined networking (SDN) solution, to the tune of more than $850 million. It also completed its acquisition of cybersecurity firm Sourcefire and privately-held Composite Software.
We've seen this from several of the tech behemoths during this earnings season -- progressing and modernizing its technology and resources to adapt to an ever-changing technological landscape. But these things take lots of capital, and oftentimes realized profits don't come for several quarters, if at all. That said, Cisco appears to be taking on its challenges steadily; the company has now posted a modest positive earnings surprise in its last 5 quarters.
Analysts had been giving a slight near-term negative outlook ahead of the Q1-14 earnings announcement, with no fewer than 8 downwardly revised estimates for fiscal 2014 in the past 90 days, and 9 downward revisions for fiscal 2015. This had helped lead Cisco to a Zacks #4 Rank (Sell). The company has a longer-term Hold recommendation.
Shares were up a bit over 1% in regular Wednesday trading, but have sunk 3% in the after-market. Cisco shares are up more that 22% year-to-date.
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.
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