WhiteWave Foods,Credit Suisse,Tiffany, Signet Jewelers and Hanesbrands highlighted as Zacks Bull and Bear of the Day
CHICAGO, July 2, 2014 /PRNewswire/ -- Zacks Equity Research highlights WhiteWave Foods (NYSE:WWAV-Free Report) as the Bull of the Day and Credit Suisse (NYSE:CS-Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis onTiffany & Company (NYSE:TIF-Free Report), Signet Jewelers Limited (NYSE:SIG-Free Report) and Hanesbrands Inc. (NYSE:HBI-Free Report).
Here is a synopsis of all five stocks:
WhiteWave Foods (NYSE:WWAV-Free Report) has almost been left out of the huge run on the grocery store. When I say the huge run on the grocery store, I mean the large amount of M&A in the space. Today, WWAV is a Zacks Rank #1 (Strong Buy), and it is the Bull of the Day.
Over the last several weeks, there has been a lot of M&A in the food space. First there was Hillshire Brands (HSH) looking to buy Pinnacle Foods (PF) but soon there were multiple bids for the company that opened the bidding.
Pilgrims Pride and Tyson Foods exchanged a few competing offers which suggests that strategic opportunities are not fully reflected in most foods stock prices.
Along with several other stocks WWAV has seen a small move higher, but as the group continues to see buyout fever, the stock could see more.
The WhiteWave Foods Company is a consumer packaged food and beverage company that makes Silk soymilk, Silk Almond milk, Silk PureCoconut coconut milk, LAND O LAKES brands, as well as creamers under various brands, including Almond Joy, Cold Stone Creamery, Cinnabon, Dunkin Donuts, Hershey's, and YORK. The company is based in Denver, Colorado.
WWAV reported a strong 1Q14 with a blowout on the top line. The company reported $830M when the street was calling for $793M in the quarter. The $38M top line beat translated into a 4.7% revenue surprise and that helped drive a $0.02 beat on the bottom line.
As a result of the solid performance the stock moved higher by 10.8% in the session following the earnings announcement.
Credit Suisse (NYSE:CS-Free Report) might have an attractive valuation and be among the top 17% Zacks Industry Rank, but estimates have fallen dramatically in the last six months. CS is a Zacks Rank #5 (Strong Sell) and it is the Bear of the Day.
The 2014 Zacks Consensus Estimate has moved from a high of $3.58 in September of 2013 to the current level of $2.68. During that slide lower, estimates did not see a single month where Zacks Consensus Estimate increased in size. To put that another way, the consensus outlook has continuously gotten worse for CS.
The 2015 Zacks Consensus Estimate has bounced around a little more over the last twelve months. The high was reached in February of this year at $3.73, but it has recently taken a big dip lower to $3.60 in May and is now at $3.34.
The trend of how estimates move over a 60 day window has a very large impact on the Zacks Rank.
Credit Suisse Group is a financial services company that offers banking and investment services. Credit Suisse Group AG was founded in 1856 and is headquartered in Zurich, Switzerland.
Despite the Zacks Rank #5 (Strong Sell), the valuation on this stock is rather attractive. The stock trades mostly in line with the industry average, but just a hair below most metrics. The forward earnings multiple of 10.6x is just below the 11.9x industry average. The proce to book of just under 1x is also below the 1.7x industry average and the price to sales multiple of 1.1x is well below the 3x industry average. All in all, the valuation looks good, but one has to keep in mind how the earnings estimate has continued to fall.
Additional content:
Tiffany Shows Stability on Fundamentals
We believe Tiffany & Company (NYSE:TIF-Free Report) is well positioned to support robust sales and earnings growth in the long run by leveraging capital investments made over the past several years in distribution, manufacturing and diamond sourcing processes. Moreover, with nearly half of the total sales generated internationally, we believe that the company is well diversified from a regional perspective as well.
Tiffany remains committed to attain long-term objectives of at least 15% earnings growth and a 10% to 12% sales increase annually. Moreover, the company's long-term objective is to attain ROA of at least 10% and ROE of at least 15%.
The company holds a significant position in the world jewelry market due to its distinctive brand appeal. We believe that the company intends to expand its distribution network by adding stores in both new and existing markets. The company is focused on opening smaller stores that offer selected collections of lower priced higher-margin products, which in turn boosts store productivity. Tiffany concentrates on improving sales per square foot through an increase in customer traffic and converting them into potential buyers by targeted advertising, ongoing sales training and customer-oriented initiatives.
Tiffany's strong fundamentals and strategic approach facilitated it to post impressive first-quarter 2014 results, wherein earnings of 97 cents a share beat the Zacks Consensus Estimate of 77 cents and the prior-year quarter earnings of 70 cents. Results benefited from higher sales and improved operating margin. Net sales of $1,012.1 million grew 13% from the prior-year quarter, and surpassed the Zacks Consensus Estimate of $953 million.
Estimates have been showing an uptrend since the earnings announcement. This is evident from the movement witnessed in the Zacks Consensus Estimate that increased 3.1% to $4.28 for fiscal 2014 in the past 60 days. For fiscal 2015, the Zacks Consensus Estimate jumped 2.3% to $4.85 in the same period.
Tiffany, which competes with Signet Jewelers Limited (NYSE:SIG-Free Report), carries a Zacks Rank #2 (Buy).
Other Stocks to Consider
Other better ranked retail stocks that look promising include Hanesbrands Inc. (NYSE:HBI-Free Report), both sporting a Zacks Rank #1 (Strong Buy).
About the Bull and Bear of the Day
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