The Zacks Analyst Blog Highlights:Netflix, Amazon.com, Comcast, Time Warner Cable and JTH Holding

CHICAGO, March 21, 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 Netflix Inc. (Nasdaq:NFLX-Free Report), Amazon.com Inc. (Nasdaq:AMZN-Free Report), Comcast Corp. (Nasdaq:CMCSA-Free Report), Time Warner Cable Inc. (NYSE:TWC-Free Report) and JTH Holding, Inc. (Nasdaq:TAX-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:

Distressing Times for U.S. Pay-TV Industry

Research firm SNL Kagan recently reported that for the first time in history, the U.S. pay-TV market witnessed net subscriber loss in 2013. The U.S. pay-TV market comprises three types of service providers: cable MSOs (multi-service operators), satellite TV operators and fiber-based telecom operators.

Though the cable TV operators were facing severe competitive brunt for a long time, net subscriber gain by the satellite TV and telecom operators were more than offsetting those losses. However, the situation took a complete downturn in 2013.

In 2013, the U.S. pay-TV industry lost 251,000 subscribers despite gaining net 40,000 subscribers in the fourth quarter. The primary reason for this dismal situation is the availability of low-priced online video-streaming services offered by Netflix Inc. (Nasdaq:NFLX-Free Report), Amazon.com Inc. (Nasdaq:AMZN-Free Report) and Hulu.

In order to survive the competition, attaining scale, productivity and effective cost management become essential for the pay-TV operators. This might have led to the proposed merger nation's two largest cable TV operators, namely, Comcast Corp. (Nasdaq:CMCSA-Free Report) and Time Warner Cable Inc. (NYSE:TWC-Free Report). The proposed deal is currently awaiting regulatory approval.

According to SNL Kagan, in 2013, the cable TV operators lost nearly 2 million video subscribers including 388,000 in the fourth quarter alone. Currently, cable MSOs together provide video services to approximately 54.4 million customers in the U.S., commanding a market size of 54%.

Satellite TV operators also facing tough times, but are still adding subscribers. In 2013, satellite TV operators gained 170,000 subscribers compared with 288,000 in 2012. Currently, satellite TV operators provide video services to around 34.3 million customers in the U.S., commanding a market size of 34%.  

On the other hand, telecom operators, which provide fiber-based high-speed video services, are gradually gaining popularity. In 2013, telecom operators registered a net 1.5 million video customers compared with 1.3 million in 2012. Currently, telecom operators provide video services to over 11 million customers, holding nearly 11% of the total market.

Internal dynamics of the pay-TV market are slowly shifting toward fiber-based video offerings of large telecom and satellite TV operators. Moreover, the strong presence of online video streaming providers is posing significant threat to the existing pay-TV business model. Video offering is the core business area of the cable TV operators, which is slipping out of their hands.

JTH Holding Upped to Strong Buy

On Mar 19, Zacks Investment Research upgraded Liberty Tax Service's parent company, JTH Holding, Inc. (Nasdaq:TAX-Free Report) to a Zacks Rank #1 (Strong Buy). Estimates have been rising ever since the company reported strong third-quarter fiscal 2014 results.

Why the Upgrade?

JTH Holding posted strong third-quarter fiscal 2014 (ending Jan 31) on Mar 13. The results included a substantial positive earnings surprise of 4.8%. Following the earnings release, shares of this property and casualty insurer gained nearly 0.9% to close at $27.05 on Mar 19.

JTH Holding's third-quarter fiscal 2014 net income of 28 cents per share was significantly better than 12 cents earned in the year-ago period. The result also exceeded the Zacks Consensus Estimate of 8 cents per share.

Bottom-line growth was largely attributable to increased market share and focus on JTH Holding's high performers.

Moreover, JTH Holding's total revenue amounted to $40.7 million during the reported quarter, escalating 8.3% year over year. The increase in revenues was attributable to higher royalties and advertising fees, financial products and tax preparation fees. These were driven by increased returns and average net fees.

Additionally, total long-term debt amounted to $22 million at the end of third-quarter fiscal 2014, reflecting an improvement from $24.3 million at fiscal 2013-end.

Also, the company is witnessing rising earnings estimates following its strong financial results. The Zacks Consensus Estimate for 2015 has increased 5.6% year over year to $1.90 per share. For 2014, the Zacks Consensus Estimate is currently pegged at $1.60 per share.

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

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