KB Home, Bravo Brio Restaurant Group, Western Gas Partners, Enterprise Products Partners and Crosstex Energy highlighted as Zacks Bull and Bear of the Day
CHICAGO, Dec. 3, 2013 /PRNewswire/ -- Zacks Equity Research highlights KB Home (NYSE:KBH-Free Report)as the Bull of the Day and Bravo Brio Restaurant Group, Inc. (Nasdaq:BBRG-Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis ontheWestern Gas Partners LP (NYSE:WES-Free Report), Enterprise Products Partners L.P. (NYSE:EPD-Free Report) and Crosstex Energy Inc. (Nasdaq:XTXI-Free Report).
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Here is a synopsis of all five stocks:
The homebuilder stocks went from "hot" to "not" in the course of the last six months of 2013. KB Home (NYSE:KBH-Free Report), however, is still expected to see triple digit earnings growth in Fiscal 2013. Is this Zacks Rank #1 (Strong Buy) now a steal?
KB Home is one of the largest homebuilders in the United States, having built over 500,000 homes across the country.
It has strung together 3 big earnings beats as the housing market recovery has gained momentum but investors have been sour of the homebuilding sector for the last several months.
The fundamentals are there. On Sep 24, KB Home reported its third quarter 2013 results and beat by 45% as earnings were $0.29 compared to the Zacks Consensus of $0.20.
Revenue jumped 29% to $549 million from $424.5 million in the year ago quarter. Each of the company's homebuilding regions saw revenue rise over 25%.
The homebuilders have gained back pricing power as well. The overall average selling price grew to $299,100 in the quarter, up 22% or $54,000 from the third quarter of 2012. Gross profit also improved, rising 150 basis points to 18.2% from 16.7% a year ago.
Consumers have not been kind to the casual dining chains in 2013. Bravo Brio Restaurant Group, Inc. (Nasdaq:BBRG-Free Report) recently lowered 2013 guidance due to the competitive market. This Zacks Rank #5 (Strong Sell) is finding "upscale affordable" to be a hard sell.
Bravo Brio operates two Italian restaurant brands, BRAVO! Cucina Italiana and BRIO Tuscan Grille, in 31 states across the country. BRIO is its bigger concept, with 56 restaurants whereas BRAVO! has 47 restaurants. It also operates one Bon Vie restaurant.
It has a big focus in its home state of Ohio as well as in Florida.
Bravo Brio markets itself as "upscale affordable" but this segment of the restaurant market has been challenging in 2013.
On Nov 5, Bravo Brio reported its third quarter results and missed the Zacks Consensus for the second quarter in a row. Earnings were $0.11 compared to the consensus of $0.14.
Additional content:
Strong Buy on Western Gas Partners
On Nov 30, Zacks Investment Research upgraded Western Gas Partners LP (NYSE:WES-Free Report) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
This oil & gas pipeline operator has delivered a 32.50% earnings beat in the most recent quarter. The long-term sales growth of the partnership is pegged at 25.0%.
Western Gas Partners has begun to realize the benefits of organic investments made in early 2012. After matching the earnings expectation for the second quarter, the partnership handsomely surpassed the consensus for the third quarter. The Street reacted positively to the earnings beat with the Zacks Consensus Estimate for 2013 increasing 9.9% in the last 30 days to $1.67 per share. This reflects projected year-over-year growth of 3.01%.
The strong performance has allowed the partnership to increase its quarterly cash distribution to 58 cents per unit, a 16% increase from the prior-year distribution of 50 cents.
The partnership offered $250 million, 2.6% senior notes in the third quarter, which received investment grade rating from the top three rating agencies. The proceeds were used to repay its dues under the revolving credit facility.
The partnership has consistently invested in capital projects like Lancaster Trains I and II to boost its future prospects. The Lancaster Trains projects are expected to come online at the end of 2014, beginning 2015.
In Jun 2013, the partnership decided to acquire a 25% at-cost interest in a joint venture with Enterprise Products Partners L.P. (NYSE:EPD-Free Report). The joint venture will own two fractionation trains in Mont Belvieu, Texas. This strategic investment will also boost the top-line of the partnership.
Other Stocks to Consider
Besides Western Gas Partners, other players in the sector, which look attractive at current levels, include Crosstex Energy Inc. (Nasdaq:XTXI-Free Report), which carries a Zacks Rank #2 (Buy).
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