The Zacks Analyst Blog Highlights:Intel, Hewlett Packard, IBM, Apple and Meritage Homes
CHICAGO, Jan. 16, 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 Intel (Nasdaq:INTC-Free Report), Hewlett Packard (NYSE:HPQ-Free Report), IBM Corp. (NYSE:IBM-Free Report), Apple (Nasdaq:AAPL-Free Report) and Meritage Homes Corporation (NYSE:MTH-Free Report).
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Here are highlights from Wednesday's Analyst Blog:
Intel Delays Arizona Chip Plant
Despite investments worth $5 billion, Intel (Nasdaq:INTC-Free Report) shelved the opening of its chip plant Fab 42 in Arizona, which was once cited by President Obama as an example of U.S. manufacturing potential.
This crucial decision came in the wake of a slump in demand for PC microprocessors, which happen to be the main source of revenues for Intel. As per research reports, global PC shipments fell by approximately 10% in 2013.
Intel is one of the world's top chip manufacturers, but of late it has been hit hard by the slowdown in demand for PCs. Despite its endeavors to become a top supplier for smartphones and tablets, which have been gaining strength, Intel's success in this regard has been limited.
Intel is not the only company to have suffered due to the PC shipment decline. PC makers including companies like Hewlett Packard (NYSE:HPQ-Free Report), Dell Inc., IBM Corp. (NYSE:IBM-Free Report) and Apple (Nasdaq:AAPL-Free Report) have also experienced a sharp decline in revenues. As per reports, the main reason for the decline in PC sales is the relatively higher cost of PCs, which is leading customers to opt for smartphones and tablets.
In order to reduce the cost of production and thus increase profitability, Intel and some of its competitors like Samsung Electronics have decided to manufacture larger-sized wafers. Intel had planned to equip the Arizona fab with machinery needed to manufacture these large-sized wafers.
Reportedly, the majority of Intel's existing plants are operating at less than 80% capacity, indicating that either demand remains below expectations or that Intel is gearing up for significant growth in the not-too-distant future. Since the company recently recruited more than a 1,000 employees at the site, it's very likely that the second theory is correct.
Currently, Intel has a Zacks Rank # 3 (Hold).
Meritage Gears Up for Investments
With the housing market recovery expected to gain further traction in 2014 and buyers adjusting to higher mortgage rates and increased home prices, most homebuilding companies are maintaining a strong liquidity position to increase investments and capitalize on the housing momentum.
One of the homebuilding companies, Meritage Homes Corporation (NYSE:MTH-Free Report) recently offered 2,200,000 shares of its common stock. On Jan 10, The company priced the stock offering at $95.9 million or $45.75 per share. The company plans to use the proceeds from the offering for expansion in new or existing markets, which includes acquisitions and for other general corporate purposes.
Meritage Homes recently reported preliminary results for the fourth quarter and fiscal 2013, the full results of which are slated to be released on Feb 05. The company expects double-digit increase in home closing revenues; number of homes closed, net order and order value in the fourth quarter and fiscal 2013. The company also expects significant increase in home closing gross margin during the period.
The company has been witnessing strong top-line growth and margin expansion for the past few quarters. However, the sales pace of the company has slowed down recently owing to headwinds like recent spike in mortgage rates, rising home prices, tight credit availability and the political uncertainty in Washington. The recent increase in cash will help the company improve its inventory by building more homes thus, strengthening its position in the upcoming quarter.
Meritage Homes Corporation currently carries a Zacks Rank #3 (Hold).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
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