The Zacks Analyst Blog Highlights:Royal Dutch Shell, Ingram Micro, Cirrus Logic, Western Digital and NCR

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Jan 16, 2014, 09:30 ET

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 Royal Dutch Shell plc (NYSE:RDS.A-Free Report), Ingram Micro (NYSE:IM-Free Report), Cirrus Logic (Nasdaq:CRUS-Free Report), Western Digital (Nasdaq:WDC-Free Report) and NCR Corp (NYSE:NCR-Free Report).

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

Here are highlights from Wednesday's Analyst Blog:

Shell Seeks $15B from Asset Sale

According to media reports, leading integrated energy firm Royal Dutch Shell plc (NYSE:RDS.A-Free Report) intends to sell some of its North Sea field interest as part of its $15 billion asset divestment target over the next two years. The news is in sync with the company's intended pickup in divestments this year.

These divestitures are to take place under the guidance of the company's new chief executive, Ben van Beurden, who assumed office two weeks ago. Shell plans to sell some of its mature upstream assets, refining assets and some projects that are yet to reach the final investment decision.

The North Sea assets are a divestment choice for the company as a major portion of production comes from only a small part of the asset base. Thus, much of the assets can be offloaded without any significant impact on output.

Royal Dutch Shell is one of the largest integrated energy firms in the world with a strong and diversified portfolio of development projects that offer attractive long-term opportunities. However, we are concerned about the company's lofty capital spending. Shell expects full-year 2013 capital expenditure to exceed by $5 billion, and touch a record level of $45 billion. The company also suffered a disappointing earnings phase, missing the Zacks Consensus Estimate in the last two quarters. While stopping major investments seem unlikely for the company (as it believes these investments will fetch good returns and dividend growth in the long run), these asset sales would bring home the much necessary cash.

Royal Dutch Shell currently holds a Zacks Rank #5 (Strong Sell), implying that it is expected to significantly underperform the broader U.S. equity market over the next one to three months.

Ingram Micro: A Strong Buy

On Jan 14, 2014, Zacks Investment Research upgraded Ingram Micro (NYSE:IM-Free Report) to a Zacks Rank #1 (Strong Buy). The company's efforts to broaden the product portfolio through strategic distribution agreements with different manufacturers and long-term expected earnings growth rate of 13.35% make it an attractive investment opportunity.

Why the Upgrade?

Ingram Micro has been striking distribution deals with a number of original equipment manufacturers, thus expanding its product portfolio. Leveraging these agreements, the company had posted a 12.4% year-over-year increase in the previous quarter.

We believe that the improving IT spending trend will help Ingram to post better results, going forward. Moreover, the company's focus on the high-margin market and strategic acquisitions to grow market share are encouraging. The Brightpoint acquisition is also expected to remain a key growth driver for the company.

Moreover, Ingram Micro's exposure in cloud computing products should also work in its favor. We believe that the cost benefits of cloud computing are pushing different companies toward massive information technology restructuring and upgrades. This is one of the reasons that small and medium sized businesses have been investing in the area despite the economic weakness that has led to a slump in overall IT spending.

Apart from this, Ingram Micro has a strong track record of beating the Zacks Consensus Estimate. The company posted an average positive earnings surprise of 15.07% over the past four quarters. The current quarter and the fiscal-year estimates stand at 80 cents and $2.28 per share, representing respective year-over-year increases of 9.0% and 16.85%. It is worth noting that the fiscal-year earnings expectation is higher than the company's long-term earnings growth expectation of 13.35%.

These factors culminated to the Zacks Rank upgrade on Ingram Micro's shares. Apart from Ingram Micro, investors can also consider stocks such as Cirrus Logic (Nasdaq:CRUS-Free Report), Western Digital (Nasdaq:WDC-Free Report) and NCR Corp (NYSE:NCR-Free Report). All these stocks sport the same Zacks Rank as Ingram Micro.

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

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