CHICAGO, May 14, 2014 /PRNewswire/ -- Zacks Equity Research highlights Ubiquiti Networks (Nasdaq: UBNT-Free Report) as the Bull of the Day and Meritage Homes (NYSE: MTH-Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis onCarnival Corporation (NYSE: CCL-Free Report), Royal Caribbean Cruises Ltd. (NYSE: RCL-Free Report) and Regal Entertainment Group (NYSE: RGC-Free Report).
Here is a synopsis of all five stocks:
Ubiquiti Networks (Nasdaq: UBNT-Free Report) was one of the best technology hardware stories of the past year, with the stock climbing over 300% from $13 in April of last year to its recent March highs above $55. Our own Brian Bolan picked this wireless broadband innovator for the Home Run Portfolio last June under $17.
But the good times were recently interrupted, first by the spring "tech-wreck" and then by a company earnings report that was not well-received by some analysts who were scared off when they got a big inventory build instead of another big raise in guidance.
Ubiquiti specializes in wireless broadband communication platforms at attractive price points for underserved and underpenetrated markets across the globe. Their key products include radios, antennas, management tools and other network applications in the unlicensed radio frequency spectrum.
Last week's quarterly report delivered another earnings and revenue beat but 2014 guidance was viewed as barely above consensus by one house who downgraded shares to Neutral and lowered their price target from $48 to $41. That analyst action accelerated the stock drop and resulted in a 24% haircut on Friday on big volume of 10 million shares.
Meritage Homes (NYSE: MTH-Free Report) and many of its home-building peers have had a challenging year so far, and this is surprising with long-term interest rates trending downward and keeping mortgages very affordable. The group is in the bottom third of industries among the 250+ classified by the Zacks Rank.
And Meritage was one of the weak leaders, from an earnings momentum standpoint, right out of the gate. On January 8 when the stock was trading $47, it slipped to Zacks #4 Rank Sell. This week, it finally dropped to a #5 Strong Sell.
The housing market data this year has definitely taken on a slower pace of growth than the strong bullish readings we saw most of last year. And this is clearly reflected in the industry group's earnings momentum.
Carnival Cruising to Shanghai
Carnival Corporation (NYSE: CCL-Free Report) announced that it was redirecting a European liner to Shanghai to capitalize on the growing Chinese market in cruises. The liner — Costa Serena — which will sail all year round starting Apr 2015, will help the company to tap into the demand surge in China which is projected to become the world's second largest cruise market by 2017.
The 3,780-passenger Costa Serena joins Costa Victoria and Costa Atlantica operational in China, in addition to the Sapphire Princess under the Princess Cruises brand, to be launched later this month. This redeployment will expand overall capacity of Costa – one of Carnival's top brands – in Asia by 74%. In 2015, with four ships based in China, Carnival's industry-leading capacity is projected to leap 140% over a two-year period.
Carnival's decision to dispatch a fourth ship to China intensified the competition in the fast-growing Chinese market. Last month, reflecting the growing importance of Asia for the cruise industry, Royal Caribbean Cruises Ltd. (NYSE: RCL-Free Report) announced that the 4,180-passenger ship Quantum of the Seas will sail from Shanghai to Japan and Korea next year.
China has emerged as a strong revenue generating market for the cruiser lines. The vast population and a fast-growing middle class, not yet familiar with cruising, make China an attractive bet for these companies striving to make the most of the opportunity by making an early entry. Additionally, Shanghai -- China's largest city -- plans to invest substantially to develop its cruising infrastructure, such as building larger ports.
Not only China, but the Asian continent is steadily emerging as a major revenue generating market for the cruise companies. Carnival is looking to tap into this demand by investing significantly in other Asian growth markets like Japan, Singapore, Hong Kong, Taiwan and Korea as well.
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