Datalink, Energy Recovery, PepsiCo, Coca-Cola and Mondelez International highlighted as Zacks Bull and Bear of the Day
CHICAGO, March 04, 2014 /PRNewswire/ -- Zacks Equity Research highlights Datalink (Nasdaq:DTLK-Free Report) as the Bull of the Day and Energy Recovery (Nasdaq:ERII-Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis onPepsiCo, Inc. (NYSE:PEP-Free Report), Coca-Cola Company (NYSE:KO-Free Report) and Mondelez International, Inc. (Nasdaq:MDLZ-Free Report).
Here is a synopsis of all five stocks:
Datalink (Nasdaq:DTLK-Free Report) is basking in the glow of an excellent recent quarter where the company came in ahead of the Zacks Consensus Estimate on top and on bottom. Today it is the Bull of the Day as a Zacks Rank #1 (Strong Buy).
Much has been made of companies that assist with storage on the cloud. There are now even commercials that are pushing consumers to have their own private cloud (storage space that is accessible on the internet). The idea here is that data demands continue to increase as pictures get larger, documents get richer and video transfer eat up more storage space.
Datalink is a data center solutions provider to mid and large-size companies. It is involved in assessing, designing, deploying, managing, and supporting unified infrastructures, such as servers, storage, and networks. Datalink provides its solutions through direct sales force in the United States. The company was founded in 1958 and is headquartered in Eden Prairie, Minnesota.
The company has beaten the Zacks Consensus Estimate in four of the last five quarters that Zacks has had a consensus estimate. There was one quarter, the December 2012 quarter, that there was no bottom line estimate, however, there was a topline estimate and the company was able to post a significant positive revenue surprise in the quarter.
Energy Recovery (Nasdaq:ERII-Free Report) is coming off a big miss of the Zacks Consensus Estimate and the decline in revenue might be the real driver here for the lower stock price. Today it is the Bear of the Day as a Zacks Rank #5 (Strong Sell).
The most September 2013 quarter was calling for revenues of $10M, up from $8M in the previous quarter. The company reported $5M in revenues for a $5M shortfall which translates to a 50% negative revenue surprise. That said, analysts are now calling for revenue of $21M in for the December 2013 quarter. The year ago, the company reported revenue of $14M so a good portion of the recent revenue miss might be realized in the coming quarter.
Energy Recovery is a leading global developer and manufacturer of highly efficient energy recovery devices utilized in the water desalination industry. Energy Recovery, Inc. operates primarily in the sea water reverse osmosis segment of the desalination industry. ERI manufactures ultra-high efficiency recovery products and technology, specifically the ERI PX Pressure Exchanger, that are among the enabling technologies driving the rapid growth in seawater reverse osmosis desalination, and are helping to make desalination affordable worldwide.
The company has missed the Zacks Consensus Estimate in four of the last five quarters. The lone beat came in the June 2013 quarter when the company topped estimates by 50%. As a result the stock moved higher by 4% in the session following the release.
The four other quarters that were all misses, saw the company miss the Zacks Consensus Estimate by an average of more than $0.04 per quarter.
Additional content:
Peltz, Pepsi Battle for Split Continues
The dispute between food and beverage giant, PepsiCo, Inc. (NYSE:PEP-Free Report) and its majority stake holder, Nelson Peltz to split the former's beverage and snacks businesses seems to be going on forever.
In mid-February, Peltz, renewed his campaign to push Pepsi to separate its underperforming beverage business from the stronger snacks business. Per media sources, Peltz in a 37-page letter to Pepsi's board, urged that the two businesses be separated to enable the company to concentrate on snacks, thereby accelerating its sales and profits. He argued that a split would "create two leaner and more entrepreneurial companies". Peltz also warned about taking the case directly to shareholders.
However, Pepsi's board once again rejected Peltz's proposal to split the company, as per media reports. Last week, in a letter to the activist investor, Ian Cook, presiding director of Pepsi's board, told that the two businesses were better together and splitting the two would erode instead or creating shareholder value.
Cook's letter supports the stance taken by Pepsi chief, Indra Nooyi at the fourth quarter conference call in mid-February. During the call, Nooyi announced that retaining the American beverage business would be in the best interests of the company. As per media sources, Peltz was highly disappointed with Nooyi's decision, instigating him to send the 37-page letter.
Peltz's investment company, Trian Fund Management, holds major stake in Pepsi. Shifting consumer preferences toward health and wellness and "good-for-you" products is lowering the demand for high-calorie soft drinks, especially in North America. Thus, beverage giants like Pepsi and The Coca-Cola Company (NYSE:KO-Free Report) are witnessing declining sales of carbonated beverages, especially the colas. Peltz feels Pepsi's underperforming beverage business is overshadowing its fast growing snack unit.
Peltz has been pressuring Nooyi for months to split the two businesses. Earlier, Peltz had pushed Pepsi to buy global snacks company, Mondelez International, Inc. (Nasdaq:MDLZ-Free Report). However, he put off this agenda after joining the former's board in January this year. Trian Fund Management also holds major stake in Mondelez.
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