Zacks Bull and Bear of the Day Highlights: ResMed, Golar LNG, Kansas City Southern, CSX and Norfolk Southern
CHICAGO, Jan. 30, 2013 /PRNewswire/ -- Zacks Equity Research highlights ResMed Inc. (NYSE: RMD) as the Bull of the Day and Golar LNG Limited (Nasdaq: GLNG) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Kansas CitySouthern (NYSE: KSU), CSX Corporation (NYSE: CSX) and Norfolk Southern Corp. (NYSE: NSC).
Full analysis of all these stocks is available at http://at.zacks.com/?id=2678.
Here is a synopsis of all five stocks:
ResMed Inc. (NYSE: RMD) is a leading designer, manufacturer and distributor of medical equipment for treating and diagnosing sleep disordered breathing. Sleep disordered breathing includes sleep apnea and related respiratory conditions. The company sells a comprehensive range of diagnostic and treatment devices in countries through a combination of wholly owned subsidiaries and independent distributors.
Another record quarter for ResMed boosted this maker of sleep apnea products back to a Zacks #1 Rank this week. In the San Diego-based company's earnings report last week, EPS for the second quarter of FY13 came in at 53 cents, a 4% beat over the analyst consensus.
This is ResMed's 5th consecutive earnings beat and its 15th beat of the last 17 quarters. And investors who were not awake for this story got on board after this report, driving the stock up 5.5% last Friday to new all-time highs above $48.
Some US energy companies and their investors are preparing for the day when they are allowed to export portions of the country's vast natural gas reserves. Golar LNG Limited (Nasdaq: GLNG) is a Norwegian ocean tanker company that specializes in the transportation of liquid natural gas, or LNG. One of its key shipping and delivery technologies are known as Floating Storage Re-Gasifiction Units (FSRUs) and would be instrumental in that energy trend.
Unfortunately, that dream may still be quite a way off in the distance. Investors who piled into the phenomenal, triple-digit earnings growth story of GLNG in early 2012 were soon disappointed about the prospects for the continued pace of that growth. Since the stock has recently become a Zacks #5 Rank (Strong Sell) again, it's a good time to look at the business and EPS trends.
Golar was originally founded in 1946 as Gotaas-Larsen Shipping Corporation. Gotaas-Larsen entered the LNG shipping business in 1970 when it ordered the LNG Carrier Hilli, which is still part of their fleet today.
In April, 2007, Golar was awarded its first firm FSRU commitments via the award of two long term leases by Petrobras to employ Golar Winter and Golar Spirit as FSRUs. Today, Golar has four FSRU projects and is actively pursuing further growth as a midstream LNG company.
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Kansas City Southern Hikes Dividend
One of the leading and oldest freight railroads, Kansas CitySouthern (NYSE: KSU) has increased its dividend by 10% to 21.5 cents per share on its common stock. The increased dividend is payable on Apr 3, to stockholders of record on Mar 11.
Moreover, the company also announced a dividend payment of 25 cents on its preferred stock. This dividend will be paid on Apr 2, to the preferred stockholders of record on Mar 11.
Historically, the company made dividend payments only on its preferred stock until last year, when it initiated dividends on its common stock. On Apr 27, 2012, the company paid a dividend payment of 19.5 cents.
We believe the increase in dividend payments on the company's common stock stems from its stellar earnings performance and encouraging outlook for the rest of the current year. In fourth quarter 2012, the company reported an earnings growth of 19.5% from year-ago results driven by higher freight rates and volumes. For the full year, the growth rate was 14.3% year over year.
Similar to the other railroads like CSX Corporation (NYSE: CSX) and Norfolk Southern Corp. (NYSE: NSC), Kansas City Southern has exercised a strong pricing discretion. This has led to average pricing gains of nearly 4–5% per annum, and a subsequent double-digit profit margin.
Apart from strong pricing fundamentals, we believe an improvement in business volumes and effective cost-control measures remain the primary catalysts for the company's growth. Additionally, improving cross-border traffic between the U.S. and Mexico and emerging business opportunities in the Mexican market supported by its cheap labor cost will boost the company's bottom line.
Over the past year, Kansas City Southern has significantly benefited from positive rail industry fundamentals supported by truckload conversion to rail. Additionally, several cost control initiatives have led to operating ratio improvement.
As a result, management expects to post consistent operating ratio improvement, taking its U.S. operating ratio down to approximately 78.0% over the next 3–5 years. Despite the ongoing economic uncertainty, management is still committed to achieve the same goals that include an operating ratio in the low 70s over the long term.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.
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