Zacks Bull and Bear of the Day Highlights: Green Mountain Coffee, Dell, KBR, Suncor Energy and Michael Baker
CHICAGO, May 28, 2013 /PRNewswire/ -- Zacks Equity Research highlights Green Mountain Coffee (Nasdaq:GMCR) as the Bull of the Day and Dell Inc. (Nasdaq:DELL) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on KBR Ltd. (NYSE:KBR), Suncor Energy Inc. (NYSE:SU) and Michael Baker Corporation (AMEX:BKR).
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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:
Initially it was thought that Starbucks would do everything in its power to crush today's Zacks Rank #1 bull, Green Mountain Coffee (Nasdaq:GMCR) and their remarkable growth rate. But Starbucks, the world's largest coffee retailer, and Green Mountain recently signed an agreement that provides for the expansion of their successful partnership for the manufacturing, marketing, distribution, and sale of Starbucks- and Tazo-branded single serve packs for use in GMCR's Keurig single serve brewing systems around the world.
This changes the game quite a bit and shifts the balance to Green Mountain.
Starbucks and GMCR have actually been successful partners since March 2011. In that time, Starbucks has shipped more than 860 million Starbucks brand K-Cup packs. The recent expansion and 5 year partnership extension should only mean good things for Green Mountain as well; it also triples the amount of Stabucks products Green Mountain can sell.
Sure, Starbucks launched their Verismo coffee machines last year, which compete with the Keurig line, but Green Mountain's strength lies in their brands, diversity and loyal following. Now that you can still use your Keurig machine to drink Starbucks products, it seems like a win-win for Green Mountain as opposed to the lose-lose proposition that many anticipated.
In the years of have been trading and interacting with other investors of all kinds, I have found that acquisitions can be a source of tremendous excitement; more importantly they can be a breeding ground for horrendous mistakes, especially by retail investors.
Activist investors like Carl Ican, T. Boone Pickens, Daniel Loeb and others make a good portion of their living through the various processes of mergers, acquisitions and liquidations. Their actions or even intentions alone can motivate thousands of ill-prepared investors to "coattail" these trades in an effort to capitalize on what they believe could be a home run. But more often than not it's either too late or the process turns out to be a long drawn out one in which the investor bails on as their patience and pockets run thin.
Dell Inc. (Nasdaq:DELL) has been at the center of a flurry of buyout activity and is attracting speculators even though their profits are slipping away faster than a 16 cylinder Bugatti Veyron burns fuel at full throttle (you'll get about 1 mile per gallon).
While I believe that DELL will most likely go private, it's my bear of the day because their fundamentals are going in the wrong direction, analyst are jumping ship (on earnings growth estimates) and I don't think that even the great Carl Icahn can improve the situation in short order.
More importantly, you should see the caution flags here and heed them unless you are expert in merger and acquisition analysis. For most investors, it might be a better move to avoid Zacks Rank 5 Dell Inc and look to companies with better ranking and positive earnings growth.
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Another Contract for KBR
Recently, KBR Ltd. (NYSE:KBR) announced that it has received a contract by the Dos Republicas Coal Partnership to provide detailed engineering and technical assistance services for the Eagle Pass Mine near Eagle Pass, Texas. The financial details of the contract were not disclosed. The scope of the contract includes option analysis, detailed engineering for the material handling system and technical assistance during the construction phase of the project.
KBR's Minerals business unit is a leading provider of large-scale mining developments that include engineering, procurement and construction management (EPCM) services for coal, iron ore, bulk material handling and coal processing systems.
Some of the major global contracts for KBR in the area of mining include the EPCM work on the Hope Down North and South mines in Australia, the development of housing for workers at the Rio Tinto mine sites in the remote region of Pilbara, and project risk management for the Koniambo nickel mine.
After the acquisition of Roberts & Schaefer Company, in 2010, KBR has strengthened its position in the mining and minerals sector with strong capabilities ranging from project management to port infrastructure.
During the last few quarters, a number of new contracts have been showering upon KBR. Two of them were turnaround contracts. These include a contract from a leading chemical company to perform turnaround services for its pyrolysis gasoline (pygas) unit on the US Gulf Coast and another from Suncor Energy Inc. (NYSE:SU) to provide turnaround services for its refinery in Edmonton, Canada.
Given the favorable scenario, we expect the KBR stock to experience a revision and show a rising trend in the coming quarters. KBR also recently hit a 52-week high on May 22, with a price of $36.27, beating its previous high of $35.67 attained on May 15, 2013.
KBR currently has Zacks Rank #3 (Hold). Other stocks from the same sector that look promising include Michael Baker Corporation (AMEX:BKR) with a Zacks Rank #1 (Strong Buy).
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.
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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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