The Zacks Analyst Blog Highlights: H&E Equipment Services, Manitowoc, BlackBerry, Apple and Google

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Mar 14, 2014, 09:30 ET

CHICAGO, March 14, 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 H&E Equipment Services Inc. (Nasdaq:HEES-Free Report), Manitowoc Company, Inc. (NYSE:MTW-Free Report), BlackBerry Limited (Nasdaq:BBRY-Free Report), Apple Inc. (Nasdaq:AAPL-Free Report) and Google Inc. (Nasdaq:GOOG-Free Report).

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

Here are highlights from Thursday's Analyst Blog:

2 Great Construction Equipment Stocks

Construction spending moved up 0.1% in January, defying the effects of a harsh winter. Private sector residential construction was primarily responsible for the upsurge, increasing 0.9%. However, the story was radically different for nonresidential construction spending, which declined for the second month in a row. The figure fell 0.3% in January.

Outlook for 2014

Harsh winter weather is being attributed as the primary reason for the misfortunes of nonresidential construction. During 2013, residential construction improved substantially, even as non-residential construction struggled somewhat.

But non-residential construction is expected to recover in 2014. According to Ken Simonson, chief economist for Associated General Contractors of America (AGC): "We will see 10 to 15 percent improvement in private residential construction and about a 10 percent increase in private non-residential work in 2014."

Increase in Sectoral Employment

An analysis of the government's employment report released last week by the AGC revealed that non-residential construction contributed 15,000 jobs in February. More importantly, construction employment came in at 5,941,000. This is the highest figure in four and a half years and a 2.6% increase from the year-ago period.

Heavy and civil engineering construction added 12,300 jobs in February. Employment in this segment has increased by 1.4% since last year. Meanwhile, job additions by nonresidential specialty trade contractors have increased by 1.2% annually.

Crucial Subsectors Gain

On closer examination of the construction spending report we find that expenditure has fallen in 11 of the 16 nonresidential construction subsectors. However, three of the six largest subsectors registered increases over the period.

According to Associated Builders and Contractors Chief Economist Anirban Basu: "This is a reflection of a number of factors, including technological innovation in the nation's energy sector, led by North Dakota and Texas, and the start of two large manufacturing projects: a $450 million oil refinery in North Dakota and a $1.2 billion propane dehydration facility in Alvin, Texas."

Below we present two construction equipment stocks which will gain from this trend, each of which also has a good Zacks Rank.

H&E Equipment Services Inc.

H&E Equipment Services Inc. (Nasdaq:HEES-Free Report) rents, sells and provides parts and service support for hi-lift or aerial work platform equipment, crane, earthmoving equipment and industrial lift truck categories. It offers heavy construction and industrial equipment for rent on a daily, weekly and monthly basis.

The company is set for market expansion in the industrial markets and in the commercial construction sector. Construction activity in the industrial arenas, particularly the oil patch and petrochemicals industries, is currently at the highest levels seen since the last peak cycle. It is expected to grow further going forward.

H&E Equipment Services holds a Zacks Rank #1 (Strong Buy) and has expected earnings growth of 23.10%. The forward price-to-earnings Ratios (P/E) for the current financial year (F1) is 21.59.

The Manitowoc Company, Inc.

The Manitowoc Company, Inc. (NYSE:MTW-Free Report) operates across multiple industry segments, primarily cranes and related products and food service equipment. The crane segment produces several products such as tower cranes, mobile telescopic cranes, lattice-boom cranes, and boom trucks.

Crane utilization and rental rates continue to improve with demand. Going forward, demand from the wind sector as well as from oil and gas markets is expected to grow. Manitowoc remains optimistic about its new products, which include an array of technologically advanced products that have been launched at ConExpo, the premier construction-equipment trade show that was held in Las Vegas last week.

Currently the company holds a Zacks Rank #2 (Buy) and has expected earnings growth of 14.30%. It has a P/E (F1) of 18.97.

The oil and gas related boom is expected to provide significant impetus to the nonresidential construction sector in the future. This is why these stocks would make good additions to your portfolio.

BlackBerry Vends U.S. Headquarters

As part of its streamlining program, BlackBerry Limited (Nasdaq:BBRY-Free Report) sold its U.S. headquarters in Irving, Texas to Canadian real estate company, Brookfield Property Group. However, financial details of the deal have not been revealed.

In 2009, BlackBerry had bought the 460,000-square-foot Irving property for headquarters. However, the company will leaseback 37% of the property to maintain operations. In 2013, the company announced its intent to lay off around 40% of its employees and halve its operating cost by May 2014. The company is also planning to sell its offices in Canada in the soon.

BlackBerry is facing severe headwinds such as an ever-increasing competitive landscape, a stagnant product portfolio and an unfavorable product mix. The company is also facing stiff competition from Apple Inc.'s (Nasdaq:AAPL-Free Report) iPhone and Google Inc.'s (Nasdaq:GOOG-Free Report) Android. Thus, the company is gradually shifting focus from handset business to enterprise services.

In the third quarter of fiscal 2014, BlackBerry sold a mere 4.3 million smartphones as against Samsung and Apple's 83 million and 50 million smartphones, respectively. Quarterly operating loss of $5,025 million compared unfavorably with an operating loss of just $230 million in the year-ago quarter. The dismal performance was mainly buoyed by writing down of long-lived assets valued nearly $2.74 billion.

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

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