Zacks Bull and Bear of the Day Highlights: Ryder System, Diamond Foods, DIRECTV, Viacom and Netflix
CHICAGO, Jan. 10, 2013 /PRNewswire/ -- Zacks Equity Research highlights Ryder System (NYSE:R) as the Bull of the Day and Diamond Foods (Nasdaq:DMND) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on DIRECTV (Nasdaq:DTV), Viacom, Inc. (Nasdaq:VIAB) and Netflix, Inc. (Nasdaq:NFLX).
(Logo: http://photos.prnewswire.com/prnh/20101027/ZIRLOGO)
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 Ryder System (NYSE:R) to Outperform from Neutral. The company's growth trajectory is backed by improvements in lease fleet and used vehicle sales. Further, it is experiencing an improvement in fleet age, implying more renewals and organic fleet growth.
In addition, the company's efforts in deploying a fuel-efficient fleet continue to lead the industry, strengthening its foothold in the rapidly growing market for environment-friendly vehicles. Apart from its organic growth, Ryder also seeks entry into new markets via acquisitions and remains successful in doing so.
Further, Ryder remains committed to its shareholders via dividends and share repurchase. Thus, we remain optimistic on the company's growth prospects.
We have downgraded our long-term recommendation on Diamond Foods (Nasdaq:DMND) to Underperform following its dismal first quarter fiscal 2013 results. Its adjusted earnings of $0.23 per share plunged 67.6% from the year-ago quarter, primarily due to weak top-line performance and increased operating expenses as a percentage of sales.
Total sales dipped 10.1% year over year to $258.5 million, and missed the Zacks Consensus Estimate of $274.0 million. The company's performance may also get a hit due to difficulty on its part to secure walnut supplies and repair its ties with growers.
Otherwise, a highly leveraged balance sheet may stop it from taking strategic initiatives. Further, continued macroeconomic headwinds, intense competition, product recalls and fluctuations in raw material prices may undermine the company's future growth prospects and sustainability.
Latest Posts on the Zacks Analyst Blog:
Subscriber Boost for DIRECTV
The largest U.S. satellite TV operator DIRECTV (Nasdaq:DTV) recently announced solid subscriber addition of nearly 100,000 in the final quarter of fiscal 2012.
Despite generating highest subscriber growth for fiscal 2012, DIRECTV's U.S. segment reported 20% fall in subscriber growth in the fourth quarter of 2012 as compared with last year's quarter but increased 49% as compared with the fourth quarter of 2011, hence taking its tally to a total 20.081 million subscribers, up 1% on an annualized basis.
Despite generating highest subscriber growth for the fourth quarter of fiscal 2012, DIRECTV's U.S. segment reported 20% fall in subscriber growth in the reported quarter as compared with the same quarter the year before. However, it increased 49% as compared with the fourth quarter of 2011, hence taking its tally to a total 20.081 million subscribers, up 1% on an annualized basis.
We believe that such massive improvement in subscriber growth is mainly attributable to settlement of service renewal fees with Viacom, and will restore faith of the customers. Moreover, launch of new DVR devices and other value added services may have prompted demand for DIRECTV.
During fiscal 2012, DIRECTV added 196,000 customers as compared with 661900 customers in fiscal 2011.
Dispute with Viacom, Inc. (Nasdaq:VIAB) coupled with slowdown in promotional activities due to increasing cost is seen to have reduced customer growth for the U.S. segment in 2012. Moreover, a saturated U.S. market and stiff competition from other pay-TV and online video streaming companies like Netflix, Inc. (Nasdaq:NFLX) and Hulu has continuously hurt subscriber growth for the company going forward.
However, DIRECTV's Latin American segment has continuously posted record subscriber growth mainly driven by lower penetration of the pay-TV market in the region.
Consequently, the rise in renewal fees by nearly 20% may jack up programming expenses of DIRECTV, thereby affecting margins going forward. In order to mitigate such expenses the company has decided to hike rates by 8% from February 7 onwards.
We believe that such increase in rates from next month may impact customer growth for DIRECTV in the first quarter of fiscal 2013.
We are maintaining our long-term Neutral recommendation on DIRECTV. Currently, the stock holds a Zacks Rank #3, implying a short-term Hold rating.
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.
About the Analyst Blog
Updated throughout every trading day, the Analyst Blog provides analysis from Zacks Equity Research about the latest news and events impacting stocks and the financial markets.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous analyst coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today by visiting http://at.zacks.com/?id=7158.
About Zacks
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD from MIT Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment
Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=4582.
Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Follow us on Twitter: http://twitter.com/zacksresearch
Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
[email protected]
http://www.zacks.com
SOURCE Zacks Investment Research, Inc.
Share this article