CHICAGO, Feb. 7, 2013 /PRNewswire/ -- Zacks Equity Research highlights Herbalife (NYSE: HLF) as the Bull of the Day and Corinthian Colleges (Nasdaq: COCO) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Fujifilm Holdings Corporation (OTC: FUJIY), Diodes Incorporated (Nasdaq: DIOD) and Interdigital Inc. (Nasdaq: IDCC).
Full analysis of all these stocks is available at http://at.zacks.com/?id=2678.
Here is a synopsis of all five stocks:
Herbalife (NYSE: HLF) the subject of a lot of controversy but it is also a Zacks Rank #2 (Buy).
Herbalife is a network marketing company that sells weight management, nutritional supplements, energy, sports and fitness, and personal care products worldwide. Herbalife offers its products through retail stores, sales representatives, sales officers, and independent service providers. The company was founded in 1980 and is based in Grand Cayman, the Cayman Islands.
Herbalife topped the Zacks Consensus Estimate in each of the last six quarters with the smallest beat coming in the most recent quarter. The largest percentage beat of the last six was the December 2011 quarter which came in 17.8% ahead of the Zacks Consensus Estimate.
The September 2012 quarter was the most recent report and came just weeks before Pershing Square's Bill Ackman called the company a pyramid scheme. The company reported earnings per share of $1.04 when the Zacks Consensus Estimate called for $1.01. That means a beat of $0.03 or 3%. The stock traded flat in the session following the release. Revenue was $1.017 billion, compared to the Zacks Consensus Estimate of $999 million.
Corinthian Colleges (Nasdaq: COCO) is coming off a large negative earnings surprise and is a Zacks #4 Rank (Sell).
Corinthian Colleges operates as a post-secondary education company. It offers various diploma programs, as well as associate's, bachelor's, and master's degrees. As of June 30, 2012, it operated 100 schools in 26 states of the United States and 16 schools in the province of Ontario, Canada with a total of 91,460 student enrollments under the Everest, WyoTech, and Heald brand names. The company was founded in 1995 and is based in Santa Ana, California.
The most recent quarter saw the company miss the Zacks Consensus Estimate by a large amount. The company reported earnings of $0.05 per share while the consensus estimate was calling for $0.07. That translates to a $0.02 miss or 28.5%. The stock fell 8% in the session following the release.
The for profit education sector has seen a large shift in the landscape. More traditional college like Stanford and The Ohio State University have begun offering courses online and in many cases for free. This has resulted in significant pressure on new enrollment numbers for all the companies in this sector.
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Fujifilm Downgraded to Underperform
We have downgraded Fujifilm Holdings Corporation (OTC: FUJIY), to Underperform based on the company's disappointing outlook for fourth quarter 2013.
Why the Downgrade?
Estimates for Fujifilm, which focuses mainly on the photo imaging business, have been declining ever since it reported a bleak outlook for the fourth quarter of 2013. Fujifilm reported impressive results in the third quarter, which grew year over year as well as beat Zacks Consensus Estimates. However, it reduced its overall outlook for the upcoming quarter. The company reduced its operating income forecast to ¥105.0 billion from the previously announced ¥110.0 billion. However, the company now expects its net income for the year to come at ¥50.0 billion compared with the previously announced ¥45.0 billion. Fourth quarter revenue guidance was maintained at ¥2,210 billion,
Following the not-so-great outlook for the fourth quarter, the Zacks Consensus Estimate for 2013 has gone down 18.1% to $1.04 per share. The Zacks Consensus Estimate for 2014 has also declined 0.6% to $1.49.
Causes for Concern
The deterioration of the company's traditional photography business is a major threat to its prosperity. Also, the vast presence of Fuji's operation beyond Japan exposes it to various regulations in different regions. The major source of income generating Document Solutions segment is also not performing as desired and is losing market share.
On top of this, yen appreciation is a major drawback for the company. As most of the businesses of Fuji are done outside Japan, an increase in the value of yen leads to lower earnings for the company. Based on these factors, it seems difficult for Fuji to attain its revenue guidance for the upcoming quarter.
Other Stocks to Consider
While we remain bearish on Fuji, other technology stocks worth a look are Diodes Incorporated (Nasdaq: DIOD), holding a Zacks Rank #1 (Strong Buy); while Interdigital Inc. (Nasdaq: IDCC) holds a Zacks Rank #2 (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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