Accuray, Amazon, Allison Transmission Holdings, Dana Holding and Gentex highlighted as Zacks Bull and Bear of the Day
CHICAGO, July 23, 2014 /PRNewswire/ -- Zacks Equity Research highlights Accuray (Nasdaq:ARAY-Free Report) as the Bull of the Day and Amazon (Nasdaq:AMZN-Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis onAllison Transmission Holdings, Inc. (NYSE:ALSN-Free Report), Dana Holding Corporation (NYSE:DAN-Free Report) and Gentex Corp. (Nasdaq:GNTX-Free Report).
Here is a synopsis of all five stocks:
Accuray (Nasdaq:ARAY-Free Report) has posted two consecutive massive beats on the top line and the bottom line as well. Today, ARAY is a Zacks Rank #1 (Strong Buy), and it is the Bull of the Day.
Aggressive growth investors appreciate beats. They love them on the bottom line, but they really want to see them on top too. The last two beats delivered by ARAY have been just that.
With a strong backlog, investors may be looking for a third big beat when the company reports again in late August.
Accuray is a radiation oncology company that develops, manufactures and sells precise, innovative treatment solutions that set the standard of care with the aim of helping patients. The Company's technologies deliver a full range of radiation therapy and radiosurgery treatments.
ARAY reported a strong 1Q14 beating the Zacks Consensus Estimate by $0.10 in posting a 63% positive earnings surprise. The company reported revenues of $97M when the street was calling for $82M in the quarter. The $15M top line beat translated into a 18% revenue surprise.
The stock moved lower by 8.9% in the session following the earnings announcement. The company issued upside guidance in that release. The company noted that they see revenue of $340M-$350M for FY14, but that was moved higher to $355M-$365M when the revenue consensus was calling for $346M.
Amazon (Nasdaq:AMZN-Free Report) has estimates for 2014 and 2015 drop over the last several months. Today, AMZN is a Zacks Rank #5 (Strong Sell), and it is the Bear of the Day.
Amazon reports earnings after the close on July 24.
While the two most recent reports were both a beat and a miss, the stock slipped 6% in the session following the release. Investors have historically not focused on earnings for Amazon.
Amazon is known as the everything store, as they sell tens of thousands of items from its website. The company has sells digital services via Amazon Web Services.
AMZN reported a strong 1Q14 beating the Zacks Consensus Estimate by $0.01 in posting a 4.5% positive earnings surprise. The company reported revenues of $19.7B when the street was calling for $19.5B in the quarter. The $262M top line beat translated into a 1.5% revenue surprise.
Additional content:
3 Auto Stocks to Race Ahead
After a weak beginning to the year due to unfavorable weather conditions, U.S. auto sales have shown improvement over the past few months. Consequently, U.S. light-vehicle sales improved 4% year over year to 8.17 million units in the first half of 2014.
In fact, for the first time since Jul 2006, sales on a seasonally adjusted annualized rate (SAAR) basis reached the 17 million mark in Jun 2014. Moreover, SAAR has remained above 16 million units in the last 4 months.
The strong sales volumes raise expectations of robust revenue figures for the major automakers. However, these automakers are offering significant incentives to boost sales, which may hurt their margins. Incentives in the form of discounts led to a 2.2% sequential decline in the average transaction price for light vehicles to $30,575 in June, per TrueCar Inc.
On the other hand, rising auto sales volumes increase the revenues of car parts manufacturers and retailers. The high average age of vehicles on U.S. roads is also resulting in demand for parts replacement. Thus, overall, the automobile sector's prospects seem bright this year. In fact, for the first time since the recession in 2008, U.S. auto sales are expected to surpass 16 million units in 2014.
Thus, it may be a good idea to look at some companies in the automobile sector that have the potential to beat earnings in their upcoming releases.
The Way to Pick Right Stocks
The large number of industry participants makes it difficult to shortlist stocks that have the potential to beat earnings. This is where the Zacks proprietary methodology comes of help. It aids in narrowing down the list by looking at stocks that have the combination of a favorable Zacks Rank – Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) – and a positive Earnings ESP.
Earnings ESP shows the percentage difference between the Most Accurate estimate and the Zacks Consensus Estimate. It helps in selecting stocks that have high chances of posting a positive earnings surprise in their next earnings announcement.
Our research shows that for stocks with this combination, the chance of a positive earnings surprise is as high as 70%. Here, we have selected 3 stocks from the automobile sector that have the right combination of elements to report an earnings beat this earnings season.
Allison Transmission Holdings, Inc. (NYSE:ALSN-Free Report) has a Zacks Rank #3 and an Earnings ESP of +9.68%. The Zacks Consensus Estimate for the company's second-quarter earnings is 31 cents per share, which reflects an expected year-over-year gain of 13.89%.
Allison Transmission has a history of outperforming earnings estimates. The company delivered positive earnings surprises in the trailing four quarters with an average beat of an astounding 90.55%.
Indiana-based Allison Transmission is among the major manufacturers of commercial-duty automatic transmissions and hybrid propulsion systems globally. The company also supplies various auto parts and services customer through 1,400 independent distributor and dealer locations across the world. The company is expected to report second-quarter results on Jul 24, 2014.
Dana Holding Corporation (NYSE:DAN-Free Report) has Earnings ESP of +5.77% and a Zacks Rank #2. The Zacks Consensus Estimate for this auto parts company's second-quarter 2014 earnings is at 52 cents per share.
Ohio-based Dana Holdings supplies high technology driveline, including axles, driveshafts and transmissions, as well as sealing and thermal-management products to the light, medium and heavy vehicle and off-highway markets worldwide. The company will post second-quarter earnings on Jul 24, 2014.
Gentex Corp. (Nasdaq:GNTX-Free Report) has a Zacks Rank #1 and an Earnings ESP of +2.08%. The Zacks Consensus Estimate for the company's second-quarter 2014 earnings is 48 cents per share, an estimated increase of 32.14% over the second quarter of 2013.
Gentex delivered positive earnings surprises in the trailing four quarters with an average beat of 10.36%. The earnings beat streak is expected to continue in second-quarter 2014 as well.
Gentex is an auto parts company that provides auto-dimming rearview mirrors with advanced electronic features, including CMOS imagers/cameras to the automotive industry, commercial fire protection products to the U.S. market, as well as dimmable aircraft windows to the aerospace industry. The company will report second-quarter 2014 earnings on Jul 24, 2014.
Bottom Line
Above-expectation earnings increase investors' confidence in a stock, which leads to immediate price appreciation. Thus, investing in these companies, which have an earnings beat potential, should yield strong returns for your portfolio in the short term.
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.
About the Analyst Blog
Updated throughout every trading day, the Analyst Blog provides analysis from Zacks Equity Research about the latest news and events impacting stocks and the financial markets.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous analyst coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Click here to subscribe to this free newsletter today.
About Zacks
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros.
Get the full Report on ARAY - FREE
Get the full Report on AMZN - FREE
Get the full Report on ALSN - FREE
Get the full Report on DAN - FREE
Get the full Report on GNTX - FREE
Follow us on Twitter: http://twitter.com/zacksresearch
Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
[email protected]
http://www.zacks.com
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
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.
SOURCE Zacks Investment Research, Inc.
Share this article