Zacks Bull and Bear of the Day Highlights: Graco, Maidenform Brands, Kraft Foods Group, Mondelez International and Flower Foods

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Apr 30, 2013, 09:30 ET

CHICAGO, April 30, 2013 /PRNewswire/ -- Zacks Equity Research highlights Graco Inc. (NYSE:GGG) as the Bull of the Day and Maidenform Brands Inc. (NYSE:MFB) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Kraft Foods Group (Nasdaq:KRFT), Mondelez International (Nasdaq:MDLZ) and Flower Foods Inc. (NYSE:FLO).

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Full analysis of all these stocks is available at http://at.zacks.com/?id=2678.

Here is a synopsis of all five stocks:

Bull of the Day:

The industrial companies are hanging in there despite predictions that the end of the cycle is near. Graco Inc. (NYSE:GGG) recently beat the Zacks Consensus by 15.1%. This Zacks Rank #1 (Strong Buy) is expected to grow earnings in the double digits in both 2013 and in 2014.

Graco may not be a household name, but it makes products which influence everyday life. It makes fluid-handling equipment and systems, with one of its best known products being the spray gun which is used to apply paint to homes, businesses and cars. But its systems also have other applications including squeezing tomato paste onto millions of frozen pizzas.

Founded in 1926 in Minnesota, the company has survived many different recessions and economic conditions. It is now global, with a diverse worldwide customer base.

On Apr 24, Graco announced record sales as they jumped 15% compared to a year ago to $269 million, however some of that was driven by the acquisition of Gema powder finishing business in August of 2012.

Bear of the Day:

Estimates are sinking on Maidenform Brands Inc. (NYSE:MFB) ahead of its first quarter earnings report on May 8 after it warned in March that 2013 would be a "transitional" year. This intimate apparel maker is now a Zacks Rank #5 (Strong Sell).

Maidenform Brands makes intimate apparel products, including bras, panties and shapewear, under many well known brands including Maidenform, Control It!, Lilyette, Self Expressions and Sweet Nothings, among others.

Maidenform has been riding the hot trend in shapewear for years but reliance on that one hot product finally caught up with the company in 2012 as it saw increased competition in the shapewear category from both department and chain stores. The secret is out and there little no barrier to entry for competitors.

In March, the company reported that full year fiscal 2012 sales declined 1% to $600.3 million. The outlook for 2013 doesn't look that much better. The company isn't expecting a turnaround until 2014.

Latest Posts on the Zacks Analyst Blog:

Will Kraft Foods Beat Earnings?

Kraft Foods Group (Nasdaq:KRFT) is set to report its first-quarter fiscal 2013 results on May 2 after the market closes. Last quarter, it posted a 90% positive surprise. Let's see how things are shaping up for this announcement.

Kraft Foods Group was spun off from Kraft Foods, Inc into an independent company last year in October. Kraft Foods Group includes the North American grocery business of the old Kraft Foods which has been renamed to Mondelez International (Nasdaq:MDLZ), but now comprises only its global snacks business.

Factors to Consider This Quarter

The top line was quite weak in the fourth quarter due to the difficult year-ago comparisons and volume declines (due to retailer inventory shifts and more product pruning). Kraft Foods was not much successful in raising prices either.

Management is not too bullish for the first quarter of 2013 as well given the difficult year-ago comparison which included some price increases that are not expected to be repeated in this quarter. Moreover, management does not expect a full recovery from the consumption declines seen in the fourth quarter of 2012.

However, like the fourth quarter of 2012, the first quarter's profits could see tailwinds from strong productivity gains and cost savings which can partially offset headwinds from the sluggish top line.

Earnings Whispers?

Our proven model does not conclusively show that Kraft Foods is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP (Read: Zacks Earnings ESP: A Better Method) and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here, as you will see below.

Zacks ESP: The Zacks ESP is 0.0%.

Zacks Rank #2 (Buy): Kraft Foods carries a Zacks Rank#2 (Buy). However the Zacks #2 Rank when combined with a 0.0% ESP makes surprise prediction difficult. We caution against stocks with Zacks #4 and #5 Ranks (Sell-rated stocks) going into the earnings announcement.

Other Stocks to Consider

Here are some other food companies you may want to consider, as our model shows they have the right combination of elements to post an earnings beat this quarter:

Flower Foods Inc. (NYSE:FLO), with Earnings ESP of +14.63% and a Zacks Rank #1 (Strong Buy).

Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.

About the Bull and Bear of the Day

Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.

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