CHICAGO, Nov. 22, 2013 /PRNewswire/ -- Zacks Equity Research highlights Motorcar Parts of America (Nasdaq: MPAA-Free Report) as the Bull of the Day and Rockwood Holdings (NYSE: ROC-Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis onthePandora (NYSE: P-Free Report), Facebook (Nasdaq: FB-Free Report) and SIRIUS XM (Nasdaq: SIRI-Free Report).
Here is a synopsis of all five stocks:
Motorcar Parts of America (Nasdaq: MPAA-Free Report) car sales have been solid this year, and many expect them to keep rolling along. One supplier to the big car companies is MPAA and as a Zacks Rank #1 (Strong Buy) it is the Bull of the Day.
For the past several months, US auto sales have shown consistent growth. The sequential growth has small, but the year over year growth was impressive. There was a big drop off in September as new models hit the showroom floors, but as we rolled into the November 1 sales numbers, the growth returned.
This page from the Wall Street Journal breaks down auto sales in a fairly high level of detail. Its interesting stuff no doubt, but the overwhelming idea that you should get from scanning that page is that people are buying new cars.
Motorcar Parts of America makes and distributes aftermarket automobile parts. They focus on brakes, wheels, alternators, starters, and wheel hub assembly products for import and domestic cars, light trucks, heavy duty, agricultural, and industrial applications. Motorcar Parts of America was founded in 1968 and is headquartered in Torrance, California.
You probably have heard of beats and raises, but how about beat and refinances? Well that just happened for MPAA, as they recently beat estimates and refinance a $95M term loan which should dramatically reduce interest expense charges. The decrease in that line item in the income statement should send more cash flowing through to net income, and thus higher earnings.
Rockwood Holdings (NYSE: ROC-Free Report) recently posed a big negative earnings surprise and has seen estimates drop significantly. The stock has a Zacks Rank #5 (Strong Sell) and is today's Bear of the Day.
On November 12, the company reported earnings of $0.14, which was $0.34 below the Zacks Consensus Estimate. That translates to a -70% earnings surprise. Investors, however, shrugged off the big miss and sent the stock higher by 7% in the session following the report.
Rockwood Holdings develops specialty chemicals and advanced materials for industrial and commercial applications. The company operates in four segments: Specialty Chemicals, Performance Additives, Titanium Dioxide Pigments, and Advanced Ceramics. Rockwood Holdings was incorporated in 2000 and is based in Princeton, New Jersey.
Despite a stock prices that has moved higher for most of the year, estimates have been dropping on all year. At the start of 2013, the Zacks Consensus Estimate was calling for 2013 EPS of $3.86. That was the high-water mark for the year.
By April, the estimate was down to $3.57 and the number tumbled to $2.82 in August and is now down to $2.20.
Pandora EPS Slips, but Beats Sales
Internet music servicePandora (NYSE: P-Free Report) posted earnings results after the closing bell on Thursday, with mixed results overall. Earnings per share (before non-recurring items) came in at $0.00, whereas analysts had expected a 1-cent gain. Revenues, however, reached $182 million in the October-ended Q3, above the expected $177 million.
Because smallish companies like Pandora are still looking for big growth, revenue numbers are a bit more important than earnings per share at this stage. And Pandora has indeed demonstrated strong growth with revenues up 50% year-over-year and mobile advertising going up 58% compared to the October quarter a year ago. These types of gaudy figures help explain Pandora shares having gained 223% year-to-date.
That said, the company's Q3 performance was not as outstanding as its Q2 was, when it posted revenues +58% and mobile revenues +92%. In fact, total mobile revenues have actually come down a bit sequentially, from $116 million last quarter to $105 million this quarter. Yet because Pandora competes against actual radio stations, another positive is its share of overall radio listening in the U.S. is now up to 8.1%, an increase from 6.6% a year ago.
Can Pandora keep taking big hunks of market share for the forseeable future? If so, will it be able to successfully monetize its new and more regular users? In this way, Pandora seems to share a similar balancing act as Facebook (Nasdaq: FB-Free Report) does, increasing the profits from its service without decreasing the quality of the user's experience with too many ads. Pandora has a subscription service, too (as does SIRIUS XM [Nasdaq: SIRI-Free Report])... but then again, regular radio does not.
Analysts have had a mixed impression regarding earnings expectations for this quarter and next, as well as both fiscal 2014 and 2015. This has earned the company a Zacks Rank #3 (Hold) and a longer-term Neutral stance. Guidance from the company for its Q4 revenues is in line with consensus expectations.
Pandora stock was modestly up in day trading before the earnings report, and it's basically given back those gains thus far in the after-market. It must be tough to keep climbing when you're already up 200+% on the year, especially when there's no price-to-earnings multiple to calculate.
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