The Zacks Analyst Blog Highlights:TD Ameritrade Holding, Toronto-Dominion Bank, General Electric, United Technologies and Lockheed Martin
CHICAGO, Dec. 24, 2013 /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 TD Ameritrade Holding Corporation (NYSE:AMTD-Free Report), The Toronto-Dominion Bank (NYSE:TD-Free Report), General Electric Company (NYSE:GE-Free Report), United Technologies Corp. (NYSE:UTX-Free Report) and Lockheed Martin Corporation (NYSE:LMT-Free Report)
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Here are highlights from Monday's Analyst Blog:
Should You Invest in TD Ameritrade?
Shares of TD Ameritrade Holding Corporation (NYSE:AMTD-Free Report) have recorded a year-to-date return of 81%. Impressive asset growth, strong capital deployment activities of the company and high client trades per day acted were the driving factors. However, we are not confident that these positives will translate to further strength down the road, as there will be considerable pressure on its bottom line owing to pressure on net interest income.
After analyzing the company's fundamentals following the third-quarter 2013 earnings release, our suggestion is to keep its shares in your portfolio. However, adding more shares of TD Ameritrade may not be a good idea due to the prevalent headwinds.
Why this Stance?
TD Ameritrade's fiscal fourth-quarter 2013 adjusted earnings came in at 36 cents per share, marginally beating the Zacks Consensus Estimate. Further, this was up 38% from the year-ago quarter figure.
Better-than-expected results came on the back of increased revenues. Further, rise in total client assets and daily average client trades were positives. However, higher expenses were a headwind.
With a strong financial position and solid cash flow, TD Ameritrade enjoys flexibility in returning capital to shareholders and investing for future growth. In Oct 2013, the company declared a 33% hike in its quarterly dividend and a special dividend of $0.50 per share.
Notably, the company also announced a special dividend of the same amount in Dec 2012. Given its solid capital position, we expect such deployment activities to continue and further enhance investors' confidence in the stock.
Additionally, we are encouraged by the company's healthy asset growing capabilities and higher trading volumes amid a sluggish macroeconomic environment. Also, the company's association with The Toronto-Dominion Bank (NYSE:TD-Free Report) increases chances of expanding its footprint by opening brokerage offices within many of the bank's current branches. This is expected to be significant growth driver going forward.
However, the company's top line growth is expected to be under pressure in the near term. The current low interest rate environment is expected to weigh on the company's expansion and net interest income. Even though interest rates are rising, global macroeconomic uncertainty is keeping many retail investors away from the market. The real estate sector is also under pressure.
When it comes to estimate revision, the company has witnessed a mixed movement. The Zacks Consensus Estimate has not been in trend either. Hence, TD Ameritrade currently has a Zacks Rank #3 (Hold). Over the last 30 days, the Zacks Consensus Estimate for 2013 moved up 2% to $1.34 per share. However, for 2014, it moved down 1% to $1.62 per share.
GE, UTX Win U.S. Defense Deals
Diversified conglomerates General Electric Company (NYSE:GE-Free Report) and United Technologies Corp. (NYSE:UTX-Free Report) recently procured three Department of Defense contracts each. A total of 37 Pentagon Defense Contracts were awarded, which had a total value of $2.2 billion. The contracts signify a thaw in defense budget as the government slowly eases its purse strings.
GE Aviation, an operating unit of General Electric, won a $7.5 million cost-plus-fixed-fee delivery order relating to the F404 Engine Component Improvement Program. This contract entails GE Aviation to offer engineering and engine system improvement support for the U.S. Navy and also for the respective governments of Australia, Canada, Finland, South Korea, Kuwait, Malaysia, Spain, Sweden, and Switzerland through Dec 2014.
In addition, General Electric received a $7.8 million cost-plus-fixed-fee delivery order for the F414 engine. The contract, scheduled to end in Dec 2014, has the U.S. Navy and the government of Australia as its customers. CFM International, a subsidiary of General Electric, also won an $8.5 million firm-fixed-price contract to supply engine combustion liners to the U.S. Air Force through Apr 2015.
On the other hand, United Technologies' Pratt & Whitney procured a contract worth $231.5 million relating to the F119-PW-100 engines that power Lockheed Martin Corporation's (NYSE:LMT-Free Report) F-22 Raptor stealth fighter jet. Sikorsky, one of the operating segments of United Technologies, won a $105.3 million deal to modify eight UH-60M Black Hawk Helicopters for the Saudi Arabian National Guard. At the same time, Sikorsky also received an $18.3 million maintenance contract for the U.S. Navy.
Based in Hartford, Conn., United Technologies provides high-end technology products and services to the building systems and aerospace industries worldwide. The company is a diversified business conglomerate serving various end markets such as aerospace, defense and commercial construction. The business diversification allows the company to remain profitable amid tough economic times.
General Electric is one of the largest and the most diversified technology and financial services corporations in the world. With products and services ranging from aircraft engines, power generation, water processing, and security technology to medical imaging, business and consumer financing, media content, and industrial products, the company serves over 100 million customers worldwide. Its segments include Power & Water, Oil & Gas, Energy Management, Aviation, Healthcare, Transportation, Home & Business Solutions, and GE Capital.
Both General Electric and United Technologies currently have a Zacks Rank #3 (Hold).
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