Motorcar Parts of America, FLIR Systems, Herbalife, NuSkin and Avon highlighted as Zacks Bull and Bear of the Day
CHICAGO, Feb. 19, 2014 /PRNewswire/ -- Zacks Equity Research highlights Motorcar Parts of America (Nasdaq:MPAA-Free Report) as the Bull of the Day and FLIR Systems (Nasdaq:FLIR-Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis onHerbalife (NYSE:HLF-Free Report), NuSkin (NYSE:NUS-Free Report) and Avon (NYSE:AVP-Free Report).
(Logo: http://photos.prnewswire.com/prnh/20101027/ZIRLOGO)
Here is a synopsis of all five stocks:
Motorcar Parts of America (Nasdaq:MPAA-Free Report) recently delivered another impressive quarter as net sales jumped 29% and EPS more than doubled year-over-year. And once again, analysts revised their estimates significantly higher after the earnings report, sending the stock to a Zacks Rank #1 (Strong Buy).
Since the company's former subsidiary Fenco has been shuttered and liquidated, the company has delivered 3 consecutive positive earnings surprises, with an average beat of 43%. And since my colleague Brian Bolan first wrote about Motorcar Parts (MPAA - Snapshot Report) as the 'Bull of the Day' on November 22, 2013, shares have jumped more than +50%.
Motorcar Parts of America remanufactures, manufactures and distributes automotive aftermarket parts, including alternators, starters and wheel hub assembly products. The company sells its products automotive retailers like AutoZone and O'Reilly. The market for aftermarket auto parts remains strong as the age of vehicles in North America is approximately 10 years.
Motorcar Parts of America recently owned a subsidiary called Fenco that lost it a lot of money. Fenco sold undercar products like steering components, pumps and gears, brake calipers and master cylinders. MPAA acquired the company in May 2011 and tried to turn it around, but it was unsuccessful. On June 10, 2013, Fenco filed for Chapter 7 bankruptcy. It is now shuttered and has no recourse back to MPAA. Fortunately, because of the riskiness of the original acquisition, MPAA kept its debt isolated from the entire company.
FLIR Systems (Nasdaq:FLIR-Free Report) recently reported its third consecutive earnings miss. Management also provided 2014 guidance below consensus, prompting a flurry of negative estimate revisions from analysts.
It is a Zacks Rank #5 (Strong Sell).
Despite the disappointing financial results, shares of Flir Systems trade at a premium to their peers on a forward P/E basis. Investors should consider avoiding this stock until its earnings momentum improves.
FLIR Systems designs, manufactures, and markets sensor systems used in a variety of thermal imaging, situational awareness, and security applications.
FLIR Systems delivered disappointing Q4 results on February 7. Adjusted EPS came in at 35 cents, missing the Zacks Consensus Estimate of 39 cents. It was a -30% decrease from the same quarter last year.
Revenue rose 4% to $400.3 million as strength from its 'Commercial Systems' division offset weakness in 'Government Systems'. CEO Andy Teich stated that its sales "were impacted by slowed activity from domestic defense customers."
Additional content:
Herbalife Meets Estimates, Guides Higher
The long-running Wall Street soap opera known as Herbalife (NYSE:HLF-Free Report) reported earnings for its fiscal 4th quarter after the bell Tuesday. Both earnings and revenues came in-line with Zacks Consensus Estimates, but what's driving HLF shares higher in the after-market is its fiscal year earnings guidance, which has been raised to $5.85 - $6.05 per share -- well above our consensus of $5.37.
Revenues of $1.27 billion in the quarter matched the Zacks estimate exactly, as did earnings per share of $1.28. These numbers had been bumped northward following Herbalife's preliminary guidance a couple weeks ago, which did not at the time see much love from investors upon the update. Some observers found this a bit strange, however, especially seeing Herbalife increased its share buyback program to $1.5 billion, which was 50% higher than was expected.
Herbalife is, however, seeing some love now: HLF was up 3.8% prior to the earnings announcement in regular-day trading, and it's up another 2.4% as of this moment.
Shares of HLF fell three weeks ago amid the continued controversy regarding its business model as an unsafe investment by Senator Ed Markey (D-MA), following the insistent table-pounding from activist investor Bill Ackman that Herbalife is a "pyramid scheme." Herbalife endured an audit in mid-December 2013 and came out with a clean bill of health. This didn't stop Ackman from writing as letter to Herbalife investors about the company's "improper" sales recruiting methods inflating sales figures.
For an excellent and comprehensive -- if completely pro-biased -- account of this and many other aspects of the story surrounding this Zacks Rank #2 (Buy) company, please read Zacks Aggressive Growth Strategist Brian Bolan's Bull of the Day article from January 24, 2014 -- one day after shares fell 10% on Sen. Markey's actions inquiring to the SEC and FTC regarding Herbalife's operations.
Herbalife's business model is not as straightforward as some, but it isn't one-of-a-kind, either. Multi-level marketing companies like Herbalife, NuSkin (NYSE:NUS-Free Report) and Avon (NYSE:AVP-Free Report) all rely or had previously relied on recruitment of sales reps to sell their products. Herbalife, which specializes in nutritional supplies, seems to have precedent on its side... at least for the moment. Stay tuned!
About the Bull and Bear of the Day
Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.
About the Analyst Blog
Updated throughout every trading day, the Analyst Blog provides analysis from Zacks Equity Research about the latest news and events impacting stocks and the financial markets.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous analyst coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Click here to subscribe to this free newsletter today.
About Zacks
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros.
Get the full Report on MPAA - FREE
Get the full Report on FLIR - FREE
Get the full Report on HLF - FREE
Get the full Report on NUS - FREE
Get the full Report on AVP - FREE
Follow us on Twitter: http://twitter.com/zacksresearch
Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
[email protected]
http://www.zacks.com
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
SOURCE Zacks Investment Research, Inc.
Share this article