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Analog Devices, Bunge and Buffalo Wild Wings as Zacks Bull and Bear of the Day
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For Immediate Release
Chicago, IL – November 29, 2017 – Zacks Equity Research highlights Analog Devices (ADI - Free Report) as the Bull of the Day and Bunge Limited (BG - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Buffalo Wild Wings .
Founded in 1965 and headquartered in Norwood, Massachusetts, Analog Devices is an original equipment manufacturer of semiconductor devices, specifically, analog, mixed signal and digital signal processing (DSP) integrated circuits.
The company’s products include data converters, amplifiers and linear products, radio frequency integrated circuits, power management products, and sensors and processing products.
Solid Quarterly Results and Upgraded Guidance
The chipmaker reported excellent results for its Q4 ended October 28, beating our estimates on both the top and bottom lines. Adjusted earnings of $1.45 per share beat were ahead of the Zacks Consensus Estimate by 8 cents and up 38.1% year over year.
Revenues jumped 53.6% year over year to $1.54 billion. Results were driven by strong growth across all segments.
"The fourth quarter of 2017 drove a strong finish to the fiscal year, with high-quality revenue growth and operational execution that expanded gross and operating margins, and delivered stellar earnings per share growth," said the CEO.
Returning Cash to Shareholders
The company has retuned approximately $8 billion to shareholders via dividends and share repurchases in the past 10 years.
They have been consistently increasing their dividends and aim to increase their dividend by 5% to 10% annually.
Acquisition of Linear Technologies
Earlier this year, the company completed the acquisition of another analog chipmaker Linear Technology for about $14.8 billion. The merger is expected to reduce Analog’s reliance on Apple while deepening its competitive moat and adding products in other fast-growing categories.
Surging Estimates
Analysts have significantly raised their estimates for the company after strong earnings and upgraded guidance. Zacks Consensus Estimates for the current and next year are now $5.23 per share and $5.61 per share, up from $4.96 and $5.42, 30 days ago.
The company has a pretty good record at beating estimates, with not a single miss in the past five years; the average quarterly beat for the last four quarters was more than 16%.
Global oversupply of grains is creating headwinds for agribusiness stocks.
Headquartered in White Plains, NY, Bunge Limited is a leading agribusiness and food company with integrated operations all over the world. It is a global leader in oilseed processing, and grain & oilseed marketing. The company has five business segments: Agribusiness, Edible Oil Products, Milling Products, Sugar and Bioenergy, and Fertilizer.
The company IPO’d in 2001 and has expanded though many significant acquisitions since then.
Disappointing Results
The company reported adjusted earnings of 75 cents per share, missing the Zacks Consensus Estimate of 79 cents. Their Sugar & Bioenergy was impacted by lower than expected Brazilian ethanol prices.
"Our earnings improved sequentially and year-over-year, although they continued to be impacted by market and industry headwinds. As a result, we are reducing our earnings guidance for the year in Agribusiness and Sugar & Bioenergy,” said the CEO.
Falling Estimates
Analysts have been slashing their estimates for the company after weak results. Zacks Consensus Estimates for the current and next year have fallen to $2.97 per share and $4.85 per share from $3.42 and $5.14 respectively, 30 days back.
The Bottom Line
Farmers and agribusinesses have been struggling due to bumper crops over the past few years.
As the company generates most of its revenues from its Agribusiness segment, it remains vulnerable to commodity price, weather and foreign exchange trends. Further the company does not have any pricing power and operates on thin margins.
The stock is down more than 10% this year but a rebound does not appear likely any time soon.
Additional content:
Buffalo Wild Wings Soars on Arby’s Buyout Plan
Shares of Buffalo Wild Wings gained more than 6.3% in morning trading Tuesday after the company announced that it was being acquired by Arby’s Restaurant Group. Arby’s will pay about $2.4 billion, or $157 per share, for the chicken wing chain.
“Buffalo Wild Wings is one of the most distinctive and successful entertainment and casual dining restaurant companies in America,” said Arby’s CEO Paul Brown in a statement. “We look forward to leveraging the combined strengths of both organizations into a truly differentiated and transformative multi-brand restaurant company.”
Roark Capital Group, a private equity firm that owns Arby’s, will finance the deal. Roark and Arby’s will also assume the debt of Buffalo Wild Wings.
At $157 per share, the deal values the home of “wings, beer, and sports” at a 7.2% premium to its Monday close. This buyout price is a 34% premium to BWLD’s close on Nov. 13, which was the last trading day before media reports that a buyout offer had been made started to emerge.
Buffalo Wild Wings has struggled recently, as industry-wide pressures and the rising price of chicken wings have put a damper on shares. These challenges brought criticism from investors, culminating in Mick McGuire's activist firm Marcato Capital Management encouraging long-time CEO Sally Smith’s departure this summer.
Still, Buffalo Wild Wings has worked to bolster foot traffic to its restaurants with new wing promotions, and management has touted its investments in delivery. Nevertheless, investors have been clamoring for a sale to a private equity firm, which is becoming a trend in today’s restaurant space.
Last month, casual dining chain Ruby Tuesday was purchased by NRD Capital for about $335 million. JAB Holdings, a Luxembourg-based firm, has taken U.S.-based chains Panera Bread and Krispy Kreme private over the past two years.
Once the deal closes, Buffalo Wild Wings will operate as an independent, privately held unit of Arby’s. Looking ahead, lower grocery prices and competition from fast-casual chains will continue present challenges for the company, so it will be important for management to successfully adapt.
Want more stock market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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 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.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
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Analog Devices, Bunge and Buffalo Wild Wings as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – November 29, 2017 – Zacks Equity Research highlights Analog Devices (ADI - Free Report) as the Bull of the Day and Bunge Limited (BG - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Buffalo Wild Wings .
Here is a synopsis of all three stocks:
Bull of the Day:
Founded in 1965 and headquartered in Norwood, Massachusetts, Analog Devices is an original equipment manufacturer of semiconductor devices, specifically, analog, mixed signal and digital signal processing (DSP) integrated circuits.
The company’s products include data converters, amplifiers and linear products, radio frequency integrated circuits, power management products, and sensors and processing products.
Solid Quarterly Results and Upgraded Guidance
The chipmaker reported excellent results for its Q4 ended October 28, beating our estimates on both the top and bottom lines. Adjusted earnings of $1.45 per share beat were ahead of the Zacks Consensus Estimate by 8 cents and up 38.1% year over year.
Revenues jumped 53.6% year over year to $1.54 billion. Results were driven by strong growth across all segments.
"The fourth quarter of 2017 drove a strong finish to the fiscal year, with high-quality revenue growth and operational execution that expanded gross and operating margins, and delivered stellar earnings per share growth," said the CEO.
Returning Cash to Shareholders
The company has retuned approximately $8 billion to shareholders via dividends and share repurchases in the past 10 years.
They have been consistently increasing their dividends and aim to increase their dividend by 5% to 10% annually.
Acquisition of Linear Technologies
Earlier this year, the company completed the acquisition of another analog chipmaker Linear Technology for about $14.8 billion. The merger is expected to reduce Analog’s reliance on Apple while deepening its competitive moat and adding products in other fast-growing categories.
Surging Estimates
Analysts have significantly raised their estimates for the company after strong earnings and upgraded guidance. Zacks Consensus Estimates for the current and next year are now $5.23 per share and $5.61 per share, up from $4.96 and $5.42, 30 days ago.
The company has a pretty good record at beating estimates, with not a single miss in the past five years; the average quarterly beat for the last four quarters was more than 16%.
Bear of the Day:
Global oversupply of grains is creating headwinds for agribusiness stocks.
Headquartered in White Plains, NY, Bunge Limited is a leading agribusiness and food company with integrated operations all over the world. It is a global leader in oilseed processing, and grain & oilseed marketing. The company has five business segments: Agribusiness, Edible Oil Products, Milling Products, Sugar and Bioenergy, and Fertilizer.
The company IPO’d in 2001 and has expanded though many significant acquisitions since then.
Disappointing Results
The company reported adjusted earnings of 75 cents per share, missing the Zacks Consensus Estimate of 79 cents. Their Sugar & Bioenergy was impacted by lower than expected Brazilian ethanol prices.
"Our earnings improved sequentially and year-over-year, although they continued to be impacted by market and industry headwinds. As a result, we are reducing our earnings guidance for the year in Agribusiness and Sugar & Bioenergy,” said the CEO.
Falling Estimates
Analysts have been slashing their estimates for the company after weak results. Zacks Consensus Estimates for the current and next year have fallen to $2.97 per share and $4.85 per share from $3.42 and $5.14 respectively, 30 days back.
The Bottom Line
Farmers and agribusinesses have been struggling due to bumper crops over the past few years.
As the company generates most of its revenues from its Agribusiness segment, it remains vulnerable to commodity price, weather and foreign exchange trends. Further the company does not have any pricing power and operates on thin margins.
The stock is down more than 10% this year but a rebound does not appear likely any time soon.
Additional content:
Buffalo Wild Wings Soars on Arby’s Buyout Plan
Shares of Buffalo Wild Wings gained more than 6.3% in morning trading Tuesday after the company announced that it was being acquired by Arby’s Restaurant Group. Arby’s will pay about $2.4 billion, or $157 per share, for the chicken wing chain.
“Buffalo Wild Wings is one of the most distinctive and successful entertainment and casual dining restaurant companies in America,” said Arby’s CEO Paul Brown in a statement. “We look forward to leveraging the combined strengths of both organizations into a truly differentiated and transformative multi-brand restaurant company.”
Roark Capital Group, a private equity firm that owns Arby’s, will finance the deal. Roark and Arby’s will also assume the debt of Buffalo Wild Wings.
At $157 per share, the deal values the home of “wings, beer, and sports” at a 7.2% premium to its Monday close. This buyout price is a 34% premium to BWLD’s close on Nov. 13, which was the last trading day before media reports that a buyout offer had been made started to emerge.
Buffalo Wild Wings has struggled recently, as industry-wide pressures and the rising price of chicken wings have put a damper on shares. These challenges brought criticism from investors, culminating in Mick McGuire's activist firm Marcato Capital Management encouraging long-time CEO Sally Smith’s departure this summer.
Still, Buffalo Wild Wings has worked to bolster foot traffic to its restaurants with new wing promotions, and management has touted its investments in delivery. Nevertheless, investors have been clamoring for a sale to a private equity firm, which is becoming a trend in today’s restaurant space.
Last month, casual dining chain Ruby Tuesday was purchased by NRD Capital for about $335 million. JAB Holdings, a Luxembourg-based firm, has taken U.S.-based chains Panera Bread and Krispy Kreme private over the past two years.
Once the deal closes, Buffalo Wild Wings will operate as an independent, privately held unit of Arby’s. Looking ahead, lower grocery prices and competition from fast-casual chains will continue present challenges for the company, so it will be important for management to successfully adapt.
Want more stock market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>
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 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.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>.
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
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
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Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performancefor information about the performance numbers displayed in this press release.