E*TRADE Financial, PennyMac Mortgage Investment Trust, Toyota Motor, General Motors and Tata Motors highlighted as Zacks Bull and Bear of the Day
CHICAGO, May 27, 2014 /PRNewswire/ -- Zacks Equity Research highlights E*TRADE Financial Corporation (Nasdaq:ETFC-Free Report) as the Bull of the Day and PennyMac Mortgage Investment Trust (NYSE:PMT-Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis onToyota Motor Corporation (NYSE:TM-Free Report), General Motors Co. (NYSE:GM-Free Report) and Tata Motors Ltd. (NYSE:TTM-Free Report).
Here is a synopsis of all five stocks:Headquartered in New York, E*TRADE Financial Corporation (Nasdaq:ETFC-Free Report) provides online brokerage and related products and services individual investors and stock plan participants.
The Company provides these services to customers both online and through their network of customer service representatives and financial consultants. The company also operates a bank for deposits generated through its brokerage business.
ETFC was incorporated in 1982 and had its IPO in 1996.
On April 23, E*TRADE reported its Q1 results. Net income for the quarter was $97 million-- highest in about seven years, and up from $35 million in Q1 of 2013. At $0.33 per share, it was also substantially better than the Zacks Consensus Estimate of $0.23 per share. ETFC has beat/met Zacks estimates in all of last four quarters, with an average quarterly surprise of 52.5%.
According the management, "overall positive investor sentiment elevated brokerage activity to its highest level in nearly five years, which aided our record net new brokerage assets and brokerage account retention".
Daily average revenue trades (DARTs) for the quarter were 198,000—up 24% from the prior quarter and 33% from the prior-year quarter.
PennyMac Mortgage Investment Trust (NYSE:PMT-Free Report) is a REIT that invests primarily in residential mortgage loans and mortgage-related assets. The company operates as a REIT for tax purposes. PMT is an externally managed by PNMAC Capital Management, LLC (PCM) an investment adviser.
PennyMac invests in residential mortgage-related opportunities including mortgage loans, mortgage servicing rights and mortgage-backed securities. PMT invests in both newly originated prime mortgage loans and distressed mortgage loans.
PMT reported it Q1 results on May 7, 2014. Net income for the quarter was $37.9 million, down 28% from the prior quarter, mainly due to lower income from correspondent lending as well as reduced gains in the distressed loan portfolio.
Net investment income was $76.6 million, down 20% from the prior quarter. At $0.50 per share, net income was 27% short of the Zacks Consensus Estimate of $0.68 per share.
ROE declined to 10% from 14% in the prior quarter but the book value increased to $20.88 from $20.82 in the prior quarter.
Additional content:
Toyota Announces 3 Global Recalls
Toyota Motor Corporation (NYSE:TM-Free Report) is recalling 516,000 vehicles worldwide, according to media reports. Of these, 430,500 cars were recalled in the U.S. The automaker recalled the vehicles due to three different safety issues.
The largest recall is of 450,000 Sienna minivans of model years 2004–2011, particularly those sold in cold areas. Toyota recalled the minivans as road salt corroded the spare tire carrier under the vehicle leading to the fall of the tire. The automaker had recalled the vehicles for the same reason in 2010 and installed a splash protector and anti-rust protection but it was of no help. Of the total Sienna minivans recalled, 370,000 minivans were sold in the U.S., 80,000 in Canada and 400 in Europe.
Next, Toyota recalled 16,000 Lexus GS 250 and 350 sedans of model year 2013 due to a manufacturing defect in the brakes. Due to the defect, the brakes get activated without warning, and without turning the brake lights on. Of the vehicles recalled, 10,500 were sold in the U.S. The recall also includes the left-hand-drive sedans which were sold in Canada, China and Europe.
Finally, Toyota recalled 50,000 Highlander and Highlander hybrid SUVs of model year 2014. The automaker recalled the vehicles due to a software glitch which might cause problem in calculating the size of the front passenger in case of deploying the air bags. Of the recalled vehicles, 45,287 were sold in the U.S., 3,400 in Canada and the rest in Mexico and Europe.
Toyota mentioned that there is no report of any causality due these defects and that the dealer will repair the defects free of cost.
Product recalls have adverse impact on the brand image. In April, Toyota announced its second largest recall of 6.36 million vehicles globally. 27 Toyota models were recalled for 5 different issues and some of the cars were recalled for multiple issues. If we double-count such vehicles, the total number of recall increased to 6.76 million.
Toyota's rival, General Motors Co. (NYSE:GM-Free Report), is also in a difficult situation with a slew of recalls. The latest is a recall of 284,913 Chevrolet Aveo and Optra vehicles of model years 2004 to 2008 in the U.S. and other markets. Of these, 218,000 Chevrolet Aveo cars were recalled in the U.S. The automaker recalled the vehicles due to fire hazard.
Toyota currently holds a Zacks Rank #4 (Sell). Tata Motors Ltd. (NYSE:TTM-Free Report) is a better-ranked automobile stocks worth considering. It carries a Zacks Rank #1 (Strong Buy).
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