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For Immediate Release
Chicago, IL – July 12, 2013 – Zacks Equity Research highlights Pilgrim's Pride ((PPC - Snapshot Report)-Free Report) as the Bull of the Day and HomeStreet ((HMST - Snapshot Report)-Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on the Amazon.com Inc. (AMZN - Analyst Report)-Free Report), Apple Inc. (AAPL - Analyst Report)-Free Report) and Microsoft Corp. (MSFT - Analyst Report)-Free Report).
Here is a synopsis of all five stocks:
Bull of the Day:
Pilgrim's Pride ((PPC - Snapshot Report)-Free Report) has seen some big action on recent Friday's, carries a great valuation and will be reporting earnings soon. It is a Zacks Rank #1 (Strong Buy). It is the Bull of the Day.
If the title line of this section is lost on you then I am showing my age a bit. That was a popular tag line from a commercial in the 80's but it’s clear that the sentiment still rings true.
With a 19% share of the domestic market, Pilgrim's Pride has a firm grip on second place behind Tyson's 22%. The 36 million bird weekly capacity also tells you that plenty of people are eating chicken.
Pilgrim's Pride produces, processes and markets fresh, frozen, and value-added chicken products in the United States, Mexico, and Puerto Rico. The company was founded in 1945 and is headquartered in Greeley, Colorado. As of December 28, 2009, Pilgrim's Pride Corporation operates as a subsidiary of JBS USA Holdings, Inc.
Looking to the earnings history, I see a stock that has beaten the number in two of the three most recent reports. The most recent quarter was a miss of $0.02, which translated into a negative earnings surprise of 8.7%. The two previous quarters had the analyst guessing where the number was going to come in and they were pretty light. The September 2012 quarter was s beat of $0.11 or 183%, and that was followed up by an even more impressive $0.17 beat for the December 2012 quarter. That translated to a beat of 212%, which isn't exactly chicken feed.
PPC has approximately 37,500 employees and 30 hatcheries. They also have 3,900 growers and 26 feed mills with production facilities throughout the Southeast of the United States, Mexico and Puerto Rico.
Bear of the Day:
HomeStreet ((HMST - Snapshot Report)-Free Report) missed the mark on the most recent earnings release and has seen estimates drop substantially over the last six months. It is a Zacks Rank #5 (Strong Sell). It is the Bear of the Day.
Over the last few weeks, interest rates have moved higher and that has caused rates for mortgages to increase as well. Along with a light housing inventory, this will keep some buyers on the sidelines which could hurt the real estate lending business for HMST.
HomeStreet is a diversified financial services company headquartered in Seattle, WA serving consumers and businesses in the Pacific Northwest, California and Hawaii. The company operates four primary lines of business: Community Banking, Single Family Lending, Commercial Real Estate Lending and Residential Construction Lending. Its principal subsidiaries are HomeStreet Bank and HomeStreet Capital Corporation.
The most recent quarter was a big miss, with the company reporting earnings of $0.74 when the Zacks Consensus Estimate was calling for $0.84. The ten cent negative earnings surprise translates to a 11.9% miss. The topline also came in $5 million light, so another miss of 6% on top.
HomeStreet Bank is a WA state chartered savings bank with a network of 23 retail bank branches, 28 stand-alone lending centers and three stand-alone commercial lending centers in Washington, Oregon, California and Hawaii. Its size may keep some investors out of it beyond its limited geographical footprint.
Amazon Cuts Kindle Prices
Amazon.com Inc. (AMZN - Analyst Report)-Free Report) recently slashed the price of Kindle Fire high-definition (HD) 7 inch tablets in the U.S. and U.K.
Amazon has always been very competitive and in the current environment, where competitors like Barnes & Noble and H-P are cutting prices, it is only expected that Amazon would follow suit. The company usually upgrades once a year, so the price cut should also help inventory clearance ahead of the new announcement.
The company stated that the 16 GB model will be available at $169 instead of $199. The 32GB model is now priced at $199, down from $229 earlier. In the U.K., the 16GB model is available for £139 while the 32GB variant is priced at £159.
A few days back, Amazon also slashed the price of its 8.9 inch Kindle Fire HD tablets across the U.K., Germany, France, Italy, Spain and Japan. The Kindle Fire HD 8.9 inch tablet is now available in the U.S. for $269 instead of $299 while the price of the 4G version has come down to $399 from $499.
The Kindle Fire HD 7.0 inch is used for web browsing, email, gaming, streaming TV shows and movies, reading e-books and more. It comes with IPS technology and runs a forked version of Google's Android OS (Wikipedia). For Amazon, the Kindle is more than a product generating revenue. It’s more important function is to serve as a platform for the sale of digital goods. Amazon is a very big player in this segment and while it started out in the digital book segment, it is now a major player in the video segment as well.
Even if Amazon does not make big money from tablets, it intends to increase the number of customers buying both physical and digital products from the company, such as movies, music, games and apps, thus increasing its revenues.
Amazon entered the tablet market with the shipping of Kindle Fire in late 2011. The tablet market is getting more competitive by the day. Apple Inc. (AAPL - Analyst Report)-Free Report) leads the race so far with record shipments of its iconic iPad. However, Amazon’s lower-priced Kindle Fire has also witnessed strong demand. Other players like Microsoft Corp. (MSFT - Analyst Report)-Free Report) have also stepped in to grab a share of the pie.
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