Rite Aid, PHH,Intel, UnitedHealth Group and Microsoft highlighted as Zacks Bull and Bear of the Day
CHICAGO, Dec. 22, 2014 /PRNewswire/ -- Zacks Equity Research highlights Rite Aid Corporation (NYSE:RAD-Free Report)as the Bull of the Day and PHH Corp (NYSE:PHH-Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis onIntel Corporation (Nasdaq:INTC-Free Report), UnitedHealth Group Inc. (NYSE:UNH-Free Report) and Microsoft Corp. (Nasdaq:MSFT-Free Report).
Here is a synopsis of all five stocks:
Rite Aid's shares surged after the company reported excellent results and raised its guidance. As the turnaround appears to be back on track on now, shares are likely to continue to move higher.
Headquartered in Camp Hill, Pennsylvania, Rite Aid Corporation (NYSE:RAD-Free Report) is the third largest retail drugstore in the U.S., based on revenues. The company has about 4,600 stores across the country.
Rite Aid reported its third quarter fiscal 2015 results on December 18. Revenues for the quarter increased 5.3% to $6.7 billion thanks mainly to 5.4% increase in same store sales from the previous year quarter.
Net income came in at $104.8 million or $0.10 per share, up from $71.5 million or $0.04 per share, a year ago and much ahead of the Zacks Consensus Estimate of $0.05 per share.
Based on third quarter results, the management raised their guidance for fiscal 2015. They now expect net income to be between $315 million and $370 million or between $0.31 and $0.37 per share. The management expects script growth to benefit from the Affordable Care Act, favorable demographics filed by acquisitions and growth in immunizations.
This guidance was significantly better than the previous guidance of $0.22 - $0.33 per share and the Zacks Consensus Estimate of $0.30 per share.
The partnership with McKesson for drug distribution and purchasing process now appears to be paying dividends as all stores were converted to this new distribution process by early in the third quarter.
PHH Corp (NYSE:PHH-Free Report) provides outsourced solutions to financial institutions, real estate companies, credit unions, corporations and government agencies through its mortgage subsidiary. They are one of the top 10 originators of retail residential mortgages in the country. They also provide home financing directly to consumers.
In July, they completed the sale of their fleet management services business. The company was founded in 1946 and is currently headquartered in Mount Laurel, New Jersey.
On November 4, the company reported its financial results for Q3 2014. Net loss from continuing operations (excluding gains from the sale of fleet management business) was $88 million or $1.64 per share. Core loss (excluding unfavorable market related mortgage servicing rights fair value adjustment) came in at $1.19 per share. This was significantly worse than the Zacks Consensus Estimate for a loss of $0.23 per share.
Mortgage Production segment reported a loss of $28 million, compared to a loss of $27 million in the second quarter, primarily due to a lower gain on mortgage loans partially offset by growth in mortgage fees. Mortgage Servicing segment's loss in the third quarter of 2014 was $71 million, compared to a profit of $10 million in the previous quarter.
Due to disappointing results, quarterly and annual estimates have been revised sharply downwards in the past few weeks by analysts.
Additional content:
3 Best-Performing Dow Stocks for 2014
Here is a short analysis of our current outlook for the top 3 performers:
Intel Corporation's (Nasdaq:INTC-Free Report) third-quarter earnings exceeded the Zacks Consensus Estimate and forward guidance did not disappoint. Intel's promise of success in the mobile segment is encouraging.
Intel's leading position in PCs, strength in servers, growing position in software and Internet Of Things segments and headway in process technology will remain its key areas of strength.
Intel holds a Zacks Rank #3 (Hold) and has expected earnings growth of 18.8%. The forward price-to-earnings ratio (P/E) for the current financial year (F1) is 16.49.
UnitedHealth Group Inc.'s (NYSE:UNH-Free Report) third-quarter earnings of $1.63 per share beat the Zacks Consensus Estimate by 10 cents. Earnings also grew 6.5% year over year. The improvement came on the back of higher revenues.
The company is consistently gaining from robust Medicaid and Medicare businesses and superior performance by its international operations. The company's expanding business on public exchange markets and continued strong growth at Optum are also driving growth.
Apart from a Zacks Rank #2 (Buy), the company has current year expected earnings growth of 2.7%. It has a P/E (F1) of 18.11x.
Microsoft Corp.'s (Nasdaq:MSFT-Free Report) first quarter 2015 earnings exceeded the Zacks Consensus Estimate. The reorganization of the business and "cloud-first mobile-first" focus are encouraging.
The enterprise refresh cycle, new subscription model, Azure and promising new products will continue to generate sizeable cash flows. Microsoft holds a Zacks Rank #3 (Hold) and has expected earnings growth of 0.4%. It has a P/E (F1) of 17.80.
Outlook for 2015
Historically, December is considered to be beneficial for investors. This is because it is the second month of what is considered to be the best period for investors.
The outlook for the next year continues to be bright. Faster-than-expected growth in GDP is the major positive on the domestic front. Meanwhile, stimulus measures in China, Europe and the Eurozone have somewhat replaced the tailwind provided by the Fed's bond repurchase program.
At the same time, the Fed has made several encouraging statements. While it has expressed satisfaction on the improvement in economic indicators, it has said that it will show patience before taking a decision on raising the interest rate. If strong domestic economic data continues to pour in, 2015 could see stocks moving higher. Only significant international headwinds can alter the course of markets southward.
Be among the first to see Zacks Top 10 Stocks for 2015, a portfolio that consists of our Best-of-the-Best fundamentally sound long-term picks designed to perform in any type of market. Get in before the stocks are released on January 2 by clicking here.
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 RAD - FREE
Get the full Report on PHH - FREE
Get the full Report on INTC - FREE
Get the full Report on UNH - FREE
Get the full Report on MSFT - 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.
Logo - http://photos.prnewswire.com/prnh/20101027/ZIRLOGO
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/rite-aid-phhintel-unitedhealth-group-and-microsoft-highlighted-as-zacks-bull-and-bear-of-the-day-300013040.html
SOURCE Zacks Investment Research, Inc.
Share this article