Zacks Bull and Bear of the Day Highlights: Popular, Garmin, Mylan, Lannett and QLT
CHICAGO, March 15, 2013 /PRNewswire/ -- Zacks Equity Research highlights Popular Inc (Nasdaq:BPOP) as the Bull of the Day and Garmin (Nasdaq:GRMN) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Mylan Inc. (Nasdaq:MYL), Lannett Company, Inc. (AMEX:LCI) and QLT Inc. (Nasdaq:QLTI).
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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:
The financial sector has broadly been leading the market higher as of late. In fact, the segment has crushed the S&P 500's return over the past one year period by about 500 basis points, suggesting to many that the sector is back on track.
Yet while investors have seen big gains across the board in this corner of the market, there is one industry that has been doing even better; regional banks. These smaller banking institutions have avoided the worst of the financial crisis, and are in many ways, leading the pack in the financial space.
A great example of this industry trend is in the case of Popular Inc (Nasdaq:BPOP), a small, Puerto Rico-based banking institution. The company has seen its shares surge over the past few months, and based on some ongoing trends in the space, could see a continuation of this trend heading into Q2 as well.
A big reason for the optimism over BPOP is the company's ability to crush earnings estimates. In the past four quarters, the company has posted an average positive surprise of 42%, including a 58% beat in the previous quarter. This demonstrates that the company is more than capable of exceeding analyst expectations, even when sentiment is broadly positive over the industry.
There was a time when Garmin (Nasdaq:GRMN) was the key player in the navigation equipment space. The firm's automotive and aviation products led the way for many consumers, and allowed the company to rise to prominence over the past few years.
However, with the advent of numerous competitors and near-universal availability of GPS devices in phones, Garmin is now facing an extremely rough period. In fact, its most important segment, the automotive/mobile space, accounts for over half the company's net sales, but has not seen any growth over the past three annual reports.
Obviously, when half of your business is flat it is tough to turn make a turn higher, and that is largely why Garmin is now sporting a Zacks Rank of 5 or 'Strong Sell.'
This low Rank, which puts GRMN into terrible company, is due to how unfavorably analysts are viewing these aforementioned trends. Estimates have broadly come down in the past sixty days, with only one estimate going higher in the past month, compared to five lower in the same time period.
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Mylan Settles Patent Dispute
Mylan Inc. (Nasdaq:MYL) recently announced that it has inked a deal with Shionogi Inc. and Andrx to settle a patent-related dispute pertaining to the generic version of Shionogi's Fortamet. The drug is marketed as an adjunct to diet and exercise to bring down the level of glucose in the blood.
Following the agreement, Mylan can start selling its generic version of Fortamet from Aug 1, 2013, or earlier under certain circumstances. Mylan did not disclose the other terms of the deal. The transaction will be reviewed by the US Department of Justice and the Federal Trade Commission.
The resolution of the patent-related dispute regarding Fortamet has removed a significant overhang for Mylan and represents further good news for the generic unit of the company. We note that the company has received quite a few approvals on the generic front over the past few months.
Our Take
Mylan's geographic reach and product depth, along with a robust generic pipeline, are contributing to its overall growth. We are also pleased with Mylan's focus on emerging markets. Over the long term, the biggest opportunities for growth in the generics industry would be expansion in emerging markets.
However, we remain cautious of the company's performance in Europe, Middle East and Africa. Additionally, as most of the large branded drugs are due to lose patent exclusivity within the 2017–2018 period, we have little visibility on the growth prospects of generic companies like Mylan beyond that timeframe.
Mylan carries a Zacks Rank #2 (Buy). Companies like Lannett Company, Inc. (AMEX:LCI) and QLT Inc. (Nasdaq:QLTI) look more attractive in the pharma space with 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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