AngioDynamics, Container Store Group, Wynn Resorts, MGM Resorts International and Caesars Entertainment highlighted as Zacks Bull and Bear of the Day
CHICAGO, Nov. 25, 2014 /PRNewswire/ -- Zacks Equity Research highlights AngioDynamics (Nasdaq:ANGO-Free Report) as the Bull of the Day and Container Store Group (NYSE:TCS-Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis onWynn Resorts Ltd. (Nasdaq:WYNN-Free Report), MGM Resorts International (NYSE:MGM-Free Report) and Caesars Entertainment Corp. (Nasdaq:CZR-Free Report).
Here is a synopsis of all five stocks:
AngioDynamics (Nasdaq:ANGO-Free Report) recently posted a solid earnings report making it a good fundamental play as well as a stock with a good technical chart. ANGO has become a Zacks Rank #1 (Strong Buy). Today it is the Bull of the Day.
ANGO posted a huge beat at the start of October, with sales coming in at $87M, $2M ahead of the Zacks Consensus Estimate. That marked the sixth straight quarter that the company was able to beat the Zacks Revenue Consensus Estimate.
The bottom line was even better, with the company reporting earnings of $0.16 when the Zacks Consensus Estimate was calling for $0.04. That $0.12 beat translates into a positive earnings surprise of 300%. The quarter prior to his one was also a big beat with the company posting a 50% positive earnings surprise.
AngioDynamics makes medical, surgical, and diagnostic devices. As the name implies, the products and devices that they make and sell are centered around the heart and blood flow. AngioDynamics was founded in 1988 and is headquartered in Latham, New York.
Estimates for ANGO had been moving the wrong way for most of this year. Starting out at $0.48, analysts lowered numbers every month over a period of April through July sending the Zacks Consensus lower by ten cent. But with the recent beat, analysts have pushed estimates up to $0.69 - that is a huge move higher.
The 2015 Zacks Consensus Estimate also launched higher, moving from $0.53 to $0.86 following the most recent earnings release.
Container Store Group (NYSE:TCS-Free Report) is down about 50% YTD, but stock performance is not a factor of the Zacks Rank. Earnings estimates are a big factor so let's take a look at why it is a Zacks Rank #5 (Strong Sell), and it is the Bear of the Day.
The Container Store Group is engaged in the retailing of storage and organization products in the United States. As of March 1, 2014, it operated 63 stores with an average size of approximately 19,000 selling square feet in 22 states and the District of Columbia. The company was founded in 1978 and is headquartered in Coppell, Texas.
The Zacks Rank is based on the revisions of earnings estimates. The stock price has nothing to do with the Zacks Rank. When estimates fall, the Zacks Rank will usually fall as well.
TCS has had a poor earnings history as the company has missed in three of the last four quarters.
The Zacks Consensus Estimate has fallen from $0.64 in April to $0.57 in June and down to $0.50 before the most recent earnings release in October. Seeing as it was the third time in the last six months that the company lowered guidance, the estimates were slashed down to their current level of $0.42.
The Zacks Consensus Estimate for 2015 has seen a similar decrease, moving from a high of $0.82 to a low of $0.60 but recently kicked higher by a penny.
Additional content:
Gambling Stock Roundup
The last week saw a series of strategic moves by gambling companies in order to gain a competitive advantage over their peers. Two Las Vegas-based casino companies Wynn Resorts Ltd. (Nasdaq:WYNN-Free Report) and MGM Resorts International (NYSE:MGM-Free Report) announced that they have taken debt for construction and development of their casinos. Meanwhile, Caesars Entertainment Corp. (Nasdaq:CZR-Free Report) announced a real estate investment trust (REIT) plan that aims at minimizing the debt pressure being faced by the company.
Per media reports and not quite surprisingly, Macau is once again set to report a significant decline in revenues for the month of November. (Read last to last week's development: Gambling Stock Round Up for Nov 17, 2014)
Recap of the Week's Important Stories:
1. Caesars Entertainment presented a plan to its creditors to restructure the obligations of its indebted unit, Caesars Entertainment Operating Co. (CEOC). Per the plan, CEOC would be converted into a REIT which will be divided into two companies. One of the companies will own the casinos and hotels while the other one will rent and manage them.
A REIT is a corporate structure that is permitted to pay at least 90% of its taxable income in the form of dividends to shareholders, which lowers income tax liability. Therefore, we believe Caesars Entertainment is trying to capitalize on a seemingly more favorable tax environment through this move. (Read: Will Caesars Entertainment's REIT Plan Offset Debt Issue?)
2. MGM Resorts has made a public offering of $1.15 billion of 6% senior unsecured notes due in 2023 at par. The proceeds of the offering are expected to be used for general corporate purposes, which include repayment of certain indebtedness maturing in 2015 and financing a portion of the development costs related to its Maryland and Massachusetts resort projects. Also, the company intends to invest the net proceeds in short-term interest-bearing accounts, securities or similar investments. The transaction is expected to close on Nov 25, 2014.
3. Wynn Resorts announced that its Wynn America subsidiary has secured a line of credit worth $375 million and a loan worth $875 million to cover some of the costs, including construction of its $1.6 billion casino-resort near Boston.
In one other development, Wynn Resorts is reportedly under scrutiny by federal agencies and offices. They are trying to determine whether the casino operator has violated money laundering laws – one of the areas of concern in Macau since May 2014.
Besides working to reveal any potential evidence that Wynn has violated laws as part of its sports-betting and casino gambling operations, the Internal Revenue Service and the Drug Enforcement Administration are also working together with U.S. Attorney's offices in Manhattan and Las Vegas to find out what steps the company has taken to prevent money-laundering.
4. After five straight months of gross gaming revenue declines, Macau is expected to once again experience a decline of 20% in November and in December, per the media reports. As evidence, Macau reported average daily revenue of 797 million Pataca for the 16 days of November, down from 850 million Pataca in October. Moreover, the second week of November was worse than the first week. Revenues in Macau had declined 23%.
This severe slowdown is the result of high-stake gamblers curtailing spending amid a cooling Chinese economy. Also, the nationwide crackdown on corruption in China has compelled Macau officials to impose restrictions on high rollers in order to stop billions of dollars from being siphoned off illegally from mainland China to Macau.
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