Zacks Bull and Bear of the Day Highlights: Safeway, Hospira, Montpelier Re Holdings, CNO Financial Group and Progressive
CHICAGO, March 25, 2013 /PRNewswire/ -- Zacks Equity Research highlights Safeway (NYSE:SWY) as the Bull of the Day and Hospira (NYSE:HSP) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Montpelier Re Holdings Ltd. (NYSE:MRH), CNO Financial Group Inc. (NYSE:CNO) and Progressive Corp. (NYSE:PGR).
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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:
Safeway (NYSE:SWY) has been consistently delivering positives earnings surprises as it continues to grow its margins and the market share. Further the company had been rewarding its investors with a solid dividend growth rate and attractive share repurchases. No wonder, the stock has been on a strong uptrend, but it still looks good on some of the valuation metrics.
Excellent growth potential and a solid record of returning cash to shareholders make this Zacks Rank #1 (Strong Buy) stock an attractive long-term investment.
With 1,641 stores in the Western, Southwestern, Rocky Mountain, and Mid-Atlantic regions of the United States and in western Canada, Safeway is one of the largest food and drug retailers in North America. The company operates stores under a variety of names including Vons, Dominick's, and Randalls and Tom Thumb.
Safeway reported its fourth quarter 2012 results on February 21, 2013. Fourth-quarter earnings were$1.06 per share, up 58% from the prior-year quarter, and significantly above Zacks consensus estimate.
Hospira (NYSE:HSP) has been facing some serious manufacturing quality concerns related its injectable drugs as well as infusion pump systems. Its remediation efforts may be successful in the long-run but they will hurt the bottom line in the short-run.
Further, the time frame for remediation remains uncertain and the company may continue to lose its market share during this time.
In view of the cloudy outlook, investors should avoid this Zacks Rank # 5 (Strong Sell) stock for the time being.
Headquartered in Lake Forest, IL, Hospira is the world's leading provider of injectable drugs and infusion technologies. Hospira was spun off from Abbott Laboratories in 2004.
In the last 2-3 years, the company has received several notices from the US Food and Drug Administration (FDA) regarding quality control issues at its Rocky Mountain facility and other facilities. The remediation efforts are likely to be costly and time consuming. Further, manufacturing will likely remain constrained during the remediation period.
Latest Posts on the Zacks Analyst Blog:
Montpelier Re: Strong Buy
On Mar 21, 2013, Zacks Investment Research upgraded Montpelier Re Holdings Ltd. (NYSE:MRH) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Montpelier has been experiencing rising earnings estimates on the back of improved fourth-quarter 2012 results. Moreover, the company swung to profit in 2012, paving the way for a brighter outlook for 2013. Additionally, this property-casualty insurer delivered positive earnings surprises in all of the last 4 quarters with an average beat of 44.7%.
On Feb 7, Montpelier reported fourth-quarter 2012 loss of 31 cents per share, which stood far less than the Zacks Consensus Estimate loss of 80 cents. The results were supported by 2.9% growth in gross premiums written and 5.6% improvement in net insurance and reinsurance premiums earned.
Meanwhile, operating earnings came in at $2.58 per share in 2012, exceeding the Zacks Consensus Estimate of $2.12. Results rebounded from a loss of $2.50 incurred in 2011.
A steady improvement in operating performance is also reflected by Montpelier's escalated book value per share. Moreover, the company has been retaining shareholders' confidence by returning wealth via share repurchases worth $121 million in 2012 along with a 9.5% hike in common dividends. These factors also bode well with the ratings agencies and augur long-term growth.
Based on Montpelier's fundamental strength and focus on its underwriting operations, the Zacks Consensus Estimate for 2013 rose 3.8% to $2.47 per share in the last 60 days, with one upward revision in estimates. The estimate for 2014 is pegged at $2.55, rising 1.6% in the last 60 days, with no estimate revisions.
Other Stocks to Consider
Apart from Montpelier, other stocks that are outperforming in the insurance sector include CNO Financial Group Inc. (NYSE:CNO) and Progressive Corp. (NYSE:PGR), which also carry 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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