The Zacks Analyst Blog Highlights: Facebook, Yahoo, Twitter, Google and Montpelier Re Holdings
CHICAGO, May 20, 2014 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Facebook Inc. (Nasdaq:FB-Free Report), Yahoo (Nasdaq:YHOO-Free Report), Twitter (NYSE:TWTR-Free Report), Google (Nasdaq:GOOGL-Free Report) and Montpelier Re Holdings Ltd. (NYSE:MRH-Free Report).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Monday's Analyst Blog:
Facebook's Slingshot for Video Sharing
Reportedly, Facebook Inc. (Nasdaq:FB-Free Report) is working on the development of its new video-chat app known as Slingshot. However, the launch date of this new app is not yet known and the possibility of it never turning into a reality cannot be ignored completely either.
The new app supposedly allows users to send short video messages. Slingshot is likely to be a standalone app from Facebook's popular text app Facebook Messenger.
Per source, this initiative was undertaken by Facebook soon after its efforts to acquire mobile-messaging startup, Snapchat failed in Oct 2013. This new app is considered to be an endeavor on Facebook's part to clone its rival Snapchat's messaging app.
However, it is noteworthy that there are some striking differences between the two mobile apps.
Snapchat enables users to send photos that automatically disappear after a few seconds, while in Slingshot users tap a contact's profile picture to instantly send a photo or short video, which the recipient can view only for once.
This is not the first time that Facebook has tried to copy Snapchat's ideas to pose stiff competition and thus increase its market share. In 2012, Facebook launched a similar video-sharing app known as Poke which failed to gain popularity and compelled the company to discontinue the service last month.
Currently, Facebook is the world's largest social media platform with over 1.0 billion monthly visitors. It aims to take this number to 7.0 billion in the near future. However, to do so it will have to attract users from all age groups.
Stiff competition from Yahoo's (Nasdaq:YHOO-Free Report) Tumblr, Twitter's (NYSE:TWTR-Free Report) Vine, Kik, Pheed and Snapchat remains a major headwind going forward. Increased usage of these apps by teenagers poses a serious threat to Facebook's leading position in the social media space. Moreover, intensifying competition from Google (Nasdaq:GOOGL-Free Report) is expected to hurt ad revenues in the near term.
Nevertheless, we believe that Facebook's growing mobile user base, Instagram's increasing popularity, frequent launch of new products and international expansions will boost the company's top line and profitability, going forward.
Currently, Facebook has a Zacks Rank #2 (Buy).
Montpelier Re: A Strong Buy
On May 15, Zacks Investment Research upgraded Montpelier Re Holdings Ltd. (NYSE:MRH-Free Report) to a Zacks Rank #2 (Buy).
Why the Upgrade?
Montpelier Re has been witnessing rising earnings estimates on the back of strong first–quarter 2014 results. Moreover, this property and casualty insurer delivered positive earnings surprises the last 4 quarters with an average beat of 57.04%.
Montpelier Re reported first-quarter operating net earnings of $1.48 a share, outperforming the Zacks Consensus Estimate by 48% and improving 25% from the year-ago earnings. The outperformance was largely aided by solid underwriting results. A lower share count attributable to continued buybacks also boosted the bottom line.
Net premiums written in the quarter improved 5% year over year on the back of higher premiums written in Montpelier at Lloyd's and Collateralized Reinsurance segments.
Underwriting income of $77.8 million in the quarter was up 29% from the prior-year period. While loss ratio of 17.5% in the first quarter improved significantly from 31.7% in the year ago quarter, combined ratio improved remarkably by 1,200 basis points year over year to 50.4%.
With respect to returning value to shareholders, Montpelier Re spent $70.3 million to buy back 2.5 million common shares in the first quarter. In the second quarter, the company has already spent nearly $17 million to repurchase 0.571 million shares.
The Zacks Consensus Estimate for 2014 earnings increased 15% to $3.60 per share over the last 30 days as all the 6 estimates rallied north. For 2015 as well, the Zacks Consensus Estimate moved up by 1% to $3.15 per share as 3 of 6 estimates were raised over the same time frame.
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