Ambarella, Pier One, Legg Mason, AllianceBernstein Holding and SEI Investments highlighted as Zacks Bull and Bear of the Day
CHICAGO, Sept. 23, 2014 /PRNewswire/ -- Zacks Equity Research highlights Ambarella (Nasdaq:AMBA-Free Report) as the Bull of the Day and Pier One (NYSE:PIR-Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Legg Mason Inc. (NYSE:LM-Free Report), AllianceBernstein Holding L.P. (NYSE:AB-Free Report) and SEI Investments Co. (Nasdaq:SEIC-Free Report).
Here is a synopsis of all five stocks:
Ambarella (Nasdaq:AMBA-Free Report) is the company that makes the chip that allows for ultra HD photos and videos, many of which are coming from the popular GoPro cameras. While the GoPro IPO provided a halo affect for the coming holiday season, AMBA stands to benefit as much if not more than GPRO. For that reason, GPRO is the Bull of the Day today.
Yesterday I highlighted STLD as the Bull of the Day after they raised guidance. In that same vein, I want to review the guidance from AMBA in their most recent earnings report.
The Company reported EPS of $0.29 on $47M in revenue. Both numbers topped the Zacks Consensus Estimate. Again, I want to focus on the guidance and the this company gives it on the conference call.
AMBA guided next quarter revenue to a range of $60M - $64M when the consensus was much closer to $51M. At the midpoint, that is 32% ahead of the number that was just reported and more than 21% ahead of where analysts were expecting the next quarter to come in.
Ambarella develops semiconductor processing solutions for video that enable high-definition (HD) video. The company's system-on-a-chip designs integrated HD video processing, image processing, audio processing, and system functions onto a single chip for delivering video and image quality. Ambarella was founded in 2004 and is headquartered in Santa Clara, California.
Pier One (NYSE:PIR-Free Report) was the bear of the day a little over two months ago after they missed earnings and fell to a Zacks Rank #5 (Strong Sell). Tracey Ryniec wrote a great article at that time as she highlighted the lower guidance and general beating shares were taking. Since that time, the company reported and missed again. PIR is again a Zacks Rank #5 (Strong Sell), and it is the Bear of the Day.
Pier 1 Imports is engaged in the retail sale of decorative home furnishings, furniture, gifts, and related products. As of March 1, 2014, it operated 1,072 stores, including 991 stores in the United States and 81 stores in Canada under the Pier 1 Imports name. Pier 1 Imports was founded in 1970 and is headquartered in Fort Worth, Texas.
The company guided lower for the second consecutive quarter, this time moving the expected range of EPS from $1.14- $1.22 down to $0.95-$1.05. Along with an earnings miss, guiding lower has a way of really crushing the stock. PIR traded lower by nearly 18% in the session following the most recent miss.
Following the poor results and weak guidance, several brokerages lowered target prices and cut their respective ratings on the stock. Wells Fargo downgraded the stock from Outperform to Market Perform while BB&T cut their rating from Buy to Hold.
Telsey Advisory Group, a boutique shop that is led by the former Bear Stearns Managing Director Dana Telsey, specializes in retail stocks and they lowered their target price to $15 from $17. The firm believes that while the bar was lowered for a number of strategic initiatives as it completes its transition into a mature omnichannel retailer, there could be hope for the stock if management is able to stabilize gross margins.
Additional content:
Is Legg Mason's Top-Line Growth Indicating a Turnaround?
On Sep 15, 2014, we issued an updated research report on Legg Mason Inc. (NYSE:LM-Free Report). Robust top-line improvement and effective cost control continued to be the growth drivers, while net outflows remained the dampener.
Legg Mason's exclusive focus on asset management along with its international presence has assisted it in enhancing revenue generation. This could be witnessed in the first quarter of fiscal 2015, which reflected a rise in total revenues. Moreover, the global asset management firm's growth was further supported by prudent expense management attained through a consistent streamlining of businesses.
Along with the commendable organic growth strategy, Legg Mason has been concentrating on expanding its operations via acquisitions. The company is amid several beneficial deals such as acquisition of international equity specialist firm Martin Currie and New York-based private asset manager QS Investors, which are expected to augment development after their completion.
Moreover, Legg Mason continues to attract investors' attention through its strong capital deployment activities. With a steady stock repurchase program in place and frequent hikes in dividend, the company's success in gaining market confidence was evident from the 16.9% year-to-date increase in share price.
On the flip side, the equity assets under management outflows continued to keep the company's profitability under pressure. These persistent outflows keep us apprehensive as an absence of credible improvement in the company's investment management performance reflects no relief in the near term.
Though Legg Mason has the potential to capitalize on available opportunities on the back of a healthy capital position and diversified product mix, slow economic recovery and elevating regulatory pressure are bound to weigh on its financials.
This can also be observed in the Zacks Consensus Estimate for 2014 and 2015, which remained flat over the last 30 days.
Currently, Legg Mason carries a Zacks Rank #3 (Hold).
Stocks That Warrant a Look
Some better-ranked finance stocks include AllianceBernstein Holding L.P. (NYSE:AB-Free Report) and SEI Investments Co. (Nasdaq:SEIC-Free Report), which sport a Zacks Rank #1 (Strong Buy).
About the Bull and Bear of the Day
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