CHICAGO, April 29, 2014 /PRNewswire/ -- Zacks Equity Research highlights Myriad Genetics (Nasdaq:MYGN-Free Report) as the Bull of the Day and Granite Construction (NYSE:GVA-Free Report)as the Bear of the Day. In addition, Zacks Equity Research provides analysis oneBay Inc. (Nasdaq:EBAY-Free Report), North American Palladium Ltd. (AMEX:PAL-Free Report) and Salix Pharmaceuticals Ltd. (Nasdaq:SLXP-Free Report).
Here is a synopsis of all five stocks:
Make no mistake about it, Biotech has been hot. More specifically, the Biomedical/Genetics industry is in the top 32% of our Zacks Industry Rank. The industry has 38 stocks that are Zacks Rank #1 (Strong Buy) or Zacks Rank #2 (Buy). Among the top ranked stocks in this highly ranked industry is our Bull of the Day, Myriad Genetics (Nasdaq:MYGN-Free Report).
Myriad is a Zacks Rank #1 (Strong Buy) with earnings coming up after the close on May 6th. Myriad uses a gene-based medicine to develop therapeutic and molecular diagnostic products. Think medicine that is programmed specifically to your personal gene mix. That's what the long term goal is of Myriad. MYGN hopes that gene-specific medication will lead to more effective treatment of illness and disease.
The more you think about potential of these drugs the more excited you get about the stock. But this company is much more than just the story. MYGN has the numbers behind it as well. Not only has the company surprised earnings to the upside four quarters in a row, it's also had substantial upside revisions over the last 90 days. Current year consensus has risen from $1.98 to $2.21 and next year's numbers have risen from $1.71 to $1.92.
I came up with an interesting theory on how to find stocks I should probably avoid buying. I'll take the screen that I use to find potentially high flying momentum stocks and flip it on its head, keeping one key part of the screen.
So rather than look for Zacks Rank #1 (Strong Buy) stocks that have recently surprised to the upside and are outperforming the market, I decided I'd look for Zacks Rank #5 (Strong Sell) stocks that have recently disappointed to the downside and are underperforming the market. The one similarity between the two is I kept the part about the stock trading close to its 52-week high. I figured this way I could find stocks with the most to lose, or stocks where traders aren't looking at the earnings picture yet. With this as my logic, I ran the screen and found 5 stocks. But the stock with the chart I'd be most afraid to be long is Granite Construction (NYSE:GVA-Free Report).
When looking for potential mines in the field, I look to the price and consensus as well. If I see a stock going up and to the right while earnings are going down to the right, that tells me there could be trouble on the horizon. The price and consensus for GVA shows just that. It makes sense given current year consensus has dropped from $2.09 to $1.84 and next year from $3.18 to $2.71.
Will eBay (EBAY) Beat Earnings This Quarter?
Growth Factors This Past Quarter
eBay's strength at PayPal, fast-growing presence in the mobile space and reinvigorated Marketplaces business increased the sales growth rates in the fourth quarter of 2013. The continuous enhancement of the mobile shopping experience and rapid consumer adoption also contributed to the higher sales.
The sale of low-value items and increased expenditure on the product launches contained gross margin expansion in the last quarter.
For the first quarter, eBay expects revenues within the range of $4.150–$4.250 billion, which was short of consensus expectations of $4.30 billion. The company expects to generate a GAAP EPS of 51 to 53 cents and a non-GAAP EPS of 65 to 67 cents, better than the Zacks Consensus Estimate of 57 cents.
Our proven model does not conclusively show that eBay will beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. That is not the case here as you will see below.
Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate stand at 57 cents. Hence, the difference is 0.00%.
Zacks Rank: eBay's Zacks Rank #3 (Hold) which when combined with a 0.00% ESP makes surprise prediction difficult.
We caution against stocks with Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.
Other Stocks to Consider
You could consider other stocks with a positive earnings ESP and Zacks Rank #1, 2 or 3 such as:
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.
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.
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.
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.