The Zacks Analyst Blog Highlights: SIRIUS XM Holdings, LIN Media, AMC Networks, Cumulus Media and RadioShack
CHICAGO, June 9, 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 SIRIUS XM Holdings Inc. (Nasdaq:SIRI-Free Report), LIN Media LLC (NYSE:LIN-Free Report), AMC Networks Inc. (Nasdaq:AMCX-Free Report), Cumulus Media Inc. (Nasdaq:CMLS-Free Report) andRadioShack Corp. (NYSE:RSH-Free Report).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Friday's Analyst Blog:
SIRIUS XM to Air U.S. Open Championship
The largest satellite radio company in the U.S. – SIRIUS XM Holdings Inc. (Nasdaq:SIRI-Free Report) – is all set to broadcast the 114th U.S. Open Golf Championship live from Jun 12, 2014 to Jun 15.
SIRIUS XM will not only be airing the U.S. Open Golf Championship live but will also feature a live program related to the tournament all through the week, hosted by top golfers like Ben Crenshaw, Hubert Green and others. Live coverage of the U.S. Open Golf Championship will be provided by ESPN Radio and it can be heard on Sirius channel 208, XM channel 93 and SiriusXM channel 85.
In fiscal 2013, the company had 1.66 million subscribers, significantly above the projected 1.60 million customers. Continuous launch of innovative services are likely to act as tailwinds for the company moving ahead and also safeguard its position against rivals like LIN Media LLC (NYSE:LIN-Free Report), AMC Networks Inc. (Nasdaq:AMCX-Free Report) and Cumulus Media Inc. (Nasdaq:CMLS-Free Report).
SIRIUS XM is set to diversify its business model from being a pure radio entertainment provider to a web-based safety and navigation information provider for cars in the face of competitive threat from several fronts. The iTunes online radio service of Apple and Pandora's streaming services for BlackBerry and Android-based smartphones will offer considerable competition for SIRIUS XM going forward. Consequently, the company is partnering with major car manufacturers like Acura, BMW, Honda, Hyundai, Infiniti, Lexus, Nissan and Toyota in order to provide telematics solutions.
SIRIUS XM believes that new cars sold with satellite radios should reach 11 million in 2014 as against 10.7 million last year. The figure is expected to double in the next five years. As a result, management remains highly optimistic about achieving nearly $100 million in revenues in 2014 from its connected vehicle services business. Moreover, the acquisition of the connected vehicle services division of Agero is expected to be a long-term growth driver for the company.
SIRIUS XM currently carries a Zacks Rank #3 (Hold).
Will RadioShack (RSH) Disappoint on Earnings?
The struggling American franchise of electronics retail stores, RadioShack Corp. (NYSE:RSH-Free Report), is slated to report first-quarter fiscal 2015 earnings before the opening bell on June 10, 2014.
The company has reported dismal quarterly numbers in all the last four quarters with an average negative earnings surprise of 309.8%, including earnings miss of 706.3% in the previously concluded quarter alone. Let's see how the company is positioned prior to the first-quarter earnings announcement.
Factors Likely to Influence This Quarter
RadioShack is facing bottom-line pressure at its lucrative wireless platform. The company is also suffering from costs associated with transitions from an adverse product mix to low-margin smartphones, and from T-Mobile to a wireless carrier partnership, along with underperformance of its businesses with Sprint.
Although management remains confident about achieving business from Verizon, RadioShack believes that the latter's business needs aggressive marketing efforts to enhance consumer awareness. We expect revenues from the Wireless division to remain weak for the rest of 2014.
Consumers nowadays prefer purchasing online to visiting retail stores. Declining foot traffic has severely affected RadioShack's business. Most gadget-freak consumers prefer tablets and smartphones today, which however, ring in less profit for the retail industry. The core retail businesses of RadioShack, namely, the consumer electronics (including digital TVs, digital music players, and digital cameras) platform thus continues its free fall.
Earnings Whispers?
Our proven model does not conclusively show that RadioShack is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. Unfortunately, this is not the case here as elaborated below.
Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate are poised at a loss of 52 cents. Hence, the ESP is 0.00%.
Zacks Rank: RadioShack has a Zacks Rank #5 (Strong Sell).
We caution investors against the stock going into the earnings announcement, as a Zacks Earnings ESP of 0.0% combined with a Zacks Rank #5 lowers the possibility of an earnings surprise.
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
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