Zacks Bull and Bear of the Day Highlights: Green Mountain Coffee Roasters, China Petroleum and Chemical, Rio Tinto, BHP Billiton and Denison Mines
by PR Newswire
CHICAGO, Jan. 24, 2013 /PRNewswire/ -- Zacks Equity Research highlights Green Mountain Coffee Roasters (Nasdaq:GMCR) as the Bull of the Day and China Petroleum and Chemical Corporation (NYSE:SNP) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Rio Tinto Plc. (NYSE:RIO), BHP Billiton Plc. (NYSE:BBL) and Denison Mines Corp. (AMEX:DNN).
Full analysis of all these stocks is available at http://at.zacks.com/?id=2678.
Here is a synopsis of all five stocks:
The Vermont-based company burst onto the scene with its wide variety of coffees, teas and other beverages that often come in single serve packs, an innovation that helped propel the company to fame. However, increased competition as of late has made investors sour on the company, pushing GMCR's stock well off of its lofty heights.
The company has fought off this competition though, and it continues to make a name for itself with its at home brewing accessories leading many to think that the firm is back on track. This is further confirmed by recent trends in the stock price, and some solid news on the estimate front which both suggest that the company is out of the doldrums and back on its way towards prominence.
In fact, GMCR has seen its stock price soar in the trailing three month period, with gains approaching 70% in the time frame, although it still has a ways to go before eclipsing its 52 week high. We believe that the company could be back on track to doing this, as earnings estimates have been soaring as of late making the company an interesting candidate for investors seeking a fresh play in 2013.
The perceived health of the Chinese economy has improved greatly in recent months, as many investors are once again bullish on the huge emerging market. Not every stock in the country looks to be able to continue to ride this wave of optimism though, as some bearish clouds are starting to appear for China Petroleum and Chemical Corporation (NYSE:SNP) in particular.
SNP is one of the largest oil and gas firms in China and the world, with reserves of nearly 2.9 billion barrels of crude oil and 6.7 trillion cubic feet of natural gas. The firm also has an increasingly large overseas operation, in both developed markets as well as in the Near East. Yet despite these recent acquisitions and large reserves, the earnings picture isn't exactly great for the company.
Full year estimates are pricing in negative earnings growth in the -16% range, though they are also expecting a rebound in the following year. Still, the Most Accurate Estimate and Zacks Earnings ESP for both this year and next are negative, suggesting a broad analyst trend to the downside.
Thanks in part to this, SNP currently has a Zacks Rank of 5 or 'Strong Sell', a huge change from just a week ago when the stock had a Zacks Rank of 3 or 'Hold'. The firm also receives a Zacks Recommendation of 'Underperform' implying a weak longer term outlook as well.
Latest Posts on the Zacks Analyst Blog:
Rio Tinto Downgraded to Underperform
On January 22, we downgraded metal mining giant, Rio Tinto Plc. (NYSE:RIO) to Underperform based on the company's huge write down of assets relating to its coal and aluminium business.
Why the Downgrade?
On January 17, the company announced a possible impairment of assets to be charged in fiscal 2012. The write down includes roughly $3 billion for assets relating to the Rio Tinto Coal Mozambique, whereas an exorbitant amount of $10-$11 billion relates to the aluminium business of the company. Along with this, Rio also expects additional smaller write-downs in the quarter.
It is anticipated that the current write down of assets will have a negative impact on the full year 2012 results as well. The company expects to announce results for the full year on February 14, 2013. The Zacks Consensus Estimate stands at $2.86.
With a Zacks Rank #3 (Hold) and Zacks Earnings Expected Surprise Prediction (ESP) (Read: Zacks Earnings ESP: A Better Method) of -10.84%, Rio is less likely to beat earnings next quarter. Moreover, this stock has mostly seen downward estimate revisions in the recent past. Estimates for year 2012 declined 0.2% to $5.59 per share over the past 90 days, while that for fiscal 2013 declined by a much higher percentage of 5.9% to $6.10, over a period of 90 days.
Rio also posted weak results for the half year 2012 with sales of $25.3 billion, down 12.8% year over year. Also, the earnings per share dropped 22% year over year to $3.16 per share, for the half year 2012.
Cause for Concern
The company operates in a highly competitive industry, which is impacted by micro factors such as price, quality and costs along with macro factors such as government delays on permit issues and tax policies. Also, in a scenario, where volatility in terms of demand and prices persists, it is difficult for the company to sustain and grow its margins and earnings.
Other Stocks to Consider
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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