CHICAGO, Nov. 12, 2014 /PRNewswire/ -- Zacks Equity Research highlights Sucampo Pharmaceuticals Inc. (Nasdaq:SCMP-Free Report) as the Bull of the Day and Titan International (NYSE:TWI-Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis onAlibaba Group Holding Limited (NYSE:BABA-Free Report), Costco Wholesale Corp. (Nasdaq:COST-Free Report) and Tesla Motors, Inc. (Nasdaq:TSLA-Free Report).
Here is a synopsis of all five stocks:
Sucampo Pharmaceuticals Inc. (Nasdaq:SCMP-Free Report) recently reported Q3 earnings data which topped both the Zacks Earnings and Revenue estimates. The main driver behind the beats was the strong sales growth of their signature drug Amitiza in both the U.S. and Japan.
This Zacks Rank #1 (Strong Buy) company is an emerging pharmaceutical company focused on the discovery, development and commercialization of proprietary drugs based on prostones, a class of compounds derived from functional fatty acids that occur naturally in the human body. Sucampo is focused on developing prostones for the treatment of gastrointestinal, respiratory, vascular and central nervous system diseases and disorders.
The higher than expected sales growth, and solid pipeline of drugs caused management to increase guidance for Q414 for both adjusted net income and adjusted diluted EPS. Management raised FY 14 revenue guidance range of $15-$20 million from $4-$6 million. Further, management raised EPS estimates to $0.35-$0.45 from $0.08-$0.13. There is one caveat with this large Q4 increase; Takeda Pharmaceutical will be making a one-time payment of $14 million dollars due to a previous agreement between the companies.
This increase in guidance has caused the Zacks Earnings Estimates to rise over the past 7 days. The announcement caused the Q4 14, FY14, Q1 15, and FY 15 estimates to all increase. Q4 rose to $0.28 from $0.25, FY 14 increased to $0.47 from 0.34, Q1 15 jumped from $0.02 to $0.07, and FY 15 rose to $0.61 from $0.45.
Titan International (NYSE:TWI-Free Report) reported earnings and revenues on October 28, and they once again missed on both the top and bottom lines. This is the seventh consecutive miss on both sides by this company. Therefore, Titan International is back as the Bear of the Day for the third time this year.
Titan International is a global manufacturer of off-highway steel wheels and tires in the agricultural, earthmoving/construction and consumer markets. Titan generally manufactures both wheels and tires for these markets and provides the value-added service of assembling the completed wheel-tire system.
For Q3 14, the Zacks Consensus Earnings Estimate was at $0.01, and Titan posted earnings of -$0.17 (-1,800% negative surprise). Further, the Zacks Consensus Revenue Estimate was estimated at $468 million, yet Titan posted revenues of only $450 million, missing by 3.9%.
As you can see in the Price and EPS Surprise graph below, Titan has been consistently missing estimates over the past several quarters, and has therefore seen their stock price decline over that timeframe.
Titan has been facing significant headwinds for the past few years, but the lack of demand for farm machinery is the biggest negative. This puts Titans core operations and end-markets at risk. Further, in the fourth quarter Titan has historically seen about a 10% decline in production due to seasonality. Adding to the negative news, the companies orders are down double-digits for both year over year, and sequentially. Also, the shutdown of the Amiens plant, closed down by Goodyear, has negatively impacted the top line due to lost sales (Titan had been attempting to acquire a portion of the plant since 2013).
Alibaba Breaks 'Singles Day' Record
Spurred by China's burgeoning Internet population and increasing online retailers, Alibaba Group Holding Limited (NYSE:BABA-Free Report) recorded sales volume of more than $2 billion in the first hour and 11 seconds of Nov 11 and is expected to carve a record this year. IDC predicts that this Singles Day could be the biggest online spending day of all times. Thanks to the surge in e-Commerce, record-breaking Internet traffic and sales were witnessed on the day.
How High Can Alibaba's Singles Day Sales Go?
Singles Day — also known as 11/11 — began to be celebrated by the Chinese youth in 2009, which gradually evolved into the world's biggest 24-hour online shopping event.
Alibaba, which heavily promotes Singles Day, encourages most retailers to give heavy discounts on this day. Additionally, majority of the brands offer special deals on such Hallmark holidays, including Valentine's Day, Singles Day and Sweetest Day to ensure that shoppers keep coming back.
Backed by the attractive deals, Alibaba's sales shot up a massive 5,740% from 2009 to over $5.7 billion on Singles Day last year. This year, Alibaba expects to touch a record $8.2 billion or 50 billion yuan in sales on Nov 11. Going by IDC's estimates, Alibaba's sales volume should reach about $8.65 billion, up nearly 50.4% from last year and soaring 184.5% from 2012. This is because more consumers will shop online on the day via mobile devices.
Alibaba has left no stones unturned to drive its Singles Day sales. The company's business-to-consumer (B2C) online platform — Tmall — solely dedicated to official brand stores and retailers, has recently allowed foreign brands, such as Costco Wholesale Corp. (Nasdaq:COST-Free Report) and Tesla Motors, Inc. (Nasdaq:TSLA-Free Report) to reach Chinese consumers via its network. Additionally, Alibaba CEO, Jack Ma, stated that the Singles Day deals will reach consumers in more than 220 countries this year. While suppliers from more than 20 countries will be participating in the event, Tmall will facilitate transactions from more than 27,000 sellers.
Since Alibaba went public on the New York Stock Exchange (NYSE) in September, its share price has surged more than 72% from its record $25 billion IPO price. Given Alibaba's strong dominance in the mobile search market, cross-border expansion and its continuous efforts to develop new products, the company's Singles Day sales could touch new heights, further strengthening its foothold in the e-Commerce market.
Alibaba is a very strong player in the Chinese e-Commerce market and its success could hurt local players, including Tencent Holdings Ltd. (700), JD.com, VIP.com and Suning, which are offering huge number of deals on this Singles Day for the first time.
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