Zacks Bull and Bear of the Day Highlights: XL Group, Black Diamond, Exxon Mobil, Chevron and ConocoPhillips
CHICAGO, May 13, 2013 /PRNewswire/ -- Zacks Equity Research highlights XL Group PLC (NYSE: XL) as the Bull of the Day and Black Diamond (Nasdaq: BDE) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Exxon Mobil Corp. (NYSE: XOM), Chevron Corp. (NYSE: CVX) and ConocoPhillips (NYSE: COP).
Full analysis of all these stocks is available at http://at.zacks.com/?id=2678.
Here is a synopsis of all five stocks:
Financials have been strong performers in this latest leg of the recovery, as these once beaten down companies have come back strong over the past six months. Yet while many investors might focus in on big banks for their exposure to this segment, one corner of the financial world has been doing even better; insurance.
This segment has seen even better performances than both the broad financial sector and the S&P 500 in the past few months, including a nearly 20% gain YTD for many broad insurance benchmarks. And with some shakiness on the revenue front for many big banking institutions, those who want to make a play on financials could be better served by looking at the insurance segment for exposure.
While many investors might focus in on big names like Progressiveor Travelers Companiesfor exposure, taking a closer inspection of some overlooked smaller caps could be a better way to go. This is especially true if these firms are seeing solid estimate revisions and a clear path for growth, such as in the case of XL Group PLC (NYSE: XL).
XL is an Irish-based global insurance and reinsurance company providing property, casualty and specialty products to a variety of organizations around the globe. The vast majority of their revenues are derived from premiums, though their investment income and underwriting business also contribute meaningfully as well.
Broadly speaking, the American consumer is back on track as spending levels are up year-over-year, while confidence levels remain high. This has pushed many investors back into a variety of leisure stocks, as these seem poised to lead the recovery higher.
Yet, while many of the companies in this space are seeing estimates and stock prices rise as we approach the summer months, the rosy outlook hasn't hit every firm in the space. Take for example Black Diamond (Nasdaq: BDE), a leisure product company that hasn't been able to convince investors that it too is poised for better days ahead.
BDE is a Utah-based firm that specializes in outdoor recreation equipment and active lifestyle products. This includes rock-climbing equipment, tents, skis, and generally everything you need to climb up or go down a mountain.
One might think that this is the perfect type of company to benefit from a free-spending consumer that is anxious to splurge and participate in various outdoor leisure activities. However, this has definitely not been the case so far in 2013, and it doesn't appear likely to materialize in the near term either.
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Crude Stocks Keep Climbing, Reach New High
The U.S. Energy Department's weekly inventory release showed that crude stockpiles notched up to another all-time high level, as production hit the maximum in 21 years. The report further revealed that within the 'refined products' category, gasoline stocks fell, while distillate supplies were up from the week-ago level. Meanwhile, refiners scaled up their utilization rates by 2.6%.
The Energy Information Administration (EIA) Petroleum Status Report, containing data of the previous week ending Friday, outlines information regarding the weekly change in petroleum inventories held and produced by the U.S., both locally and abroad.
The report provides an overview of the level of reserves and their movements, thereby helping investors understand the demand/supply dynamics of petroleum products. It is an indicator of current oil prices and volatility that affect the businesses of the companies engaged in the oil and refining industry.
Analysis of the Data Crude Oil: The federal government's EIA report revealed that crude inventories rose by 230,000 barrels for the week ending May 3, 2013, following a jump of 6.70 million barrels in the previous week.
The analysts surveyed by Platts had expected crude stocks to climb some 1.9 million barrels. An increase in the level of domestic production – to their highest level since Feb 1992 – led to the modest stockpile build-up with the world's biggest oil consumer even as refiners improved their utilization rates and imports pulled back sharply.
However, crude inventories at the Cushing terminal in Oklahoma – the key delivery hub for U.S. crude futures traded on the New York Mercantile Exchange – were down 652,000 barrels from the previous week's level to 49.15 million barrels. Stocks are currently just under the all-time high of 51.86 million barrels reached in January.
Following the weekly inventory increase, at 395.51 million barrels, current crude supplies are 4.2% above the year-earlier level, and comfortably exceed the upper limit of the average for this time of the year. The crude supply cover remained flat from the previous week at 26.6 days. In the year-ago period, the supply cover was 26.0 days.
Gasoline: Supplies of gasoline were down for the twelfth time in 13 weeks, as domestic consumption strengthened and production fell. This was partially offset by higher imports.
The 910,000 barrels withdrawal – ahead of analysts' projections for a 750,000 barrels decrease in supply level – took gasoline stockpiles down to 215.07 million barrels. Notwithstanding this drawdown, the existing inventory level of the most widely used petroleum product is 3.9% higher than the year-earlier level and is midway through the average range.
Distillate: Distillate fuel supplies (including diesel and heating oil) were up 1.81 million barrels last week, above analysts' expectations for a 1 million barrels gain in inventory level. The increase in distillate fuel stocks – the fourth in as many weeks – could be attributed to higher production, partially offset by decline in imports.
At 117.56 million barrels, distillate supplies are 2.6% below the year-ago level and are in the lower limit of the average range for this time of the year.
Refinery Rates: Refinery utilization was up 2.6% from the prior week to 87.0%. The analysts were expecting the refinery run rate to increase 0.6% to 85.0%.
Zacks Rank A bullish data from the EIA generally acts as a positive catalyst for crude prices and buoy producers, such as Exxon Mobil Corp. (NYSE: XOM), Chevron Corp. (NYSE: CVX) and ConocoPhillips (NYSE: COP). With an improvement in the companies' ability to generate positive earnings surprises, they can then move higher from their current Zacks Rank #3 (Hold).
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.
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