Zacks Bull and Bear of the Day Highlights: Hanger Orthopedic Group, Skechers USA, JPMorgan Chase & Co, Visa Inc. and Mastercard
CHICAGO, March 24, 2011 /PRNewswire/ -- Zacks Equity Research highlights: Hanger Orthopedic Group (NYSE: HGR) as the Bull of the Day and Skechers USA (NYSE: SKX) as the Bear of the Day. In addition, Zacks Equity Research provides analysis JPMorgan Chase & Co. (NYSE: JPM), Visa Inc. (NYSE: V) and Mastercard Inc. (NYSE: MA).
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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:
We upgrade our recommendation on Hanger Orthopedic Group (NYSE: HGR) to Outperform based on our assessment of the company's forecast-beating fourth-quarter fiscal 2010 results and increased visibility on its business prospects.
Earnings for the quarter topped the Zacks Consensus Estimate. Healthy contributions from the company's patient-care and distribution businesses as well as acquisitions fueled double-digit growth in the top line. Hanger is the leader in the orthotic and prosthetic (O&P) patient care services market and is enjoying healthy demand for its services. The company's economies of scale are unmatched by its competitors.
Hanger continues to pursue acquisitions to expand its geographic presence and revenues. Moreover, the company is poised to achieve meaningful cost synergies from its corporate relocation.
Skechers USA's (NYSE: SKX) fourth-quarter 2010 earnings missed the Zacks expectations, and plunged 87.9% from the prior-year quarter. Skechers indicated that it has witnessed order cancellations as the market was flooded with lower-priced toning product.
Consequently, total inventories increased 77.9% to $398.6 million, over the prior-year quarter. However, Skechers indicated that it would try to lower its inventory level over the next two quarters, while generating reasonable margins.
The stock is trading at a premium to the peer group, based on fiscal 2011 forward earnings estimates. We have a long-term Underperform recommendation on the stock. Our target price of $17.00, 12.2X 2011 EPS, reflects this view.
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JPMorgan Pauses Debit Card Rewards
On Monday, Bloomberg reported that JPMorgan Chase & Co. (NYSE: JPM) had started notifying its debit card users that they would not be able to garner rewards point after July 19. It is an attempt on the company's part to reduce its losses from the projected cap on debit-interchange fees, as proposed by the Durbin Amendment.
For every swipe of a debit card, the related bank charges a fee to the retailer. The bank then shares the amount with its card partners such as Visa Inc. (NYSE: V) and Mastercard Inc. (NYSE: MA). The charged amount is called interchange fees.
According to the Federal Reserve's data for 2009, on average, banks charge a retailer 44 cents per transaction as interchange fee. Though the amount seems small, the extensive use of debit cards totals it to a solid $16 billion for the industry every year.
JPMorgan's present rewards program was free and open to every cardholder who had a checking account. The debit card users earned 1 reward point for every $5 spent compared with 1 reward point for every $1 spent for credit card users. To earn rewards point faster (4 points for every $5 spent), customers had to pay an annual fee of $25.
In December 2010, the Fed had proposed a limit on debit-interchange fees at 12 cent per transaction effective July 21. This represents about 73% decrease from the previous average, draining huge revenues from the industry. For JPMorgan, such a limit is expected to result in annual losses of about $1.3 billion.
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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