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Founded in April 1992 and headquartered in Sunnyvale, CA, NetApp provides enterprise storage and data management software and hardware products and services.
The company offers cloud data services, data storage software, data backup and recovery, all-flash storage, converged systems, data infrastructure management, and hybrid flash storage.
Strong Results
The company reported strong results for its fiscal fourth-quarter 2018 ended April 27, 2018. Non-GAAP earnings of 1.05 per share were ahead of the Zacks Consensus Estimate of $1.01 per share. Earning surged 22.1% year-over-year and were also above the management’s guidance.
Revenues were up 11% from the year-ago quarter, and also beat the Zacks Consensus Estimate.
“The fourth quarter marked a great finish to a strong year. We successfully pivoted to the growth areas of the market, expanded our opportunity with HCI and new cloud partnerships, and improved operational discipline to deliver sustained and profitable growth,” said the CEO.
Rising Estimates
After a strong quarterly report, analysts have significantly raised their estimates for the company.
Zacks Consensus Estimates for the current and the next fiscal year have increased to $4.06 per share and $4.75 per share respectively, from $3.97 per share and $4.62 per share, before the results.
Returning Cash to Shareholders
During fiscal year 2018, the company returned $3.97 million to shareholders through share repurchases and cash dividends. It amounted to 76% of free cash flow.
Earlier, the company announced that it will double its quarterly dividend to $0.40 per share in Q1 of FY 2019. The quarterly dividend will be paid on July 25, 2018.
Bottom Line
The stock is up almost 50% this year, but trading at about 20 times forward earnings, it does not look too expensive and with expected EPS growth rate of 13.84%, it can continue its upward trend. In this data driven economy, the demand for its products may continue to rise.
The stock currently has a Zacks Rank #1 (Strong Buy). It has Zacks Style Scores of “A” for Growth, “B” for Momentum and a VGM Score of “B.”
Founded in 1994 and headquartered in San Diego, CA, PriceSmart is the largest operator of membership warehouse clubs in Central America and the Caribbean. It has recently entered the South American region with clubs in Colombia.
The company operates 40 warehouse clubs in 12 countries and one U.S. territory.
Disappointing Quarterly Results
The company reported quarterly earnings of 61 cents a share, missing the Zacks Consensus Estimate of 69 cents. Cost of goods sold and SG&A expenses went up during the quarter.
This was the fourth miss for the company in the trailing five quarters. Total revenues were however up 7.1% and ahead of estimates.
Shares plunged almost 8% in the after-market trading. Also, the company reported soft comparable warehouse sales performance for the month of June, further worrying investors about its outlook.
Estimates Slashed
Analysts have slashed their estimates significantly after poor results. Zacks Consensus Estimates for the current and next year are down to $3.01 per share and $3.20 per share respectively, down from $3.20 and $3.67, before the results.
The Bottom Line
Shares of this warehouse operator are down more than 10% this year but the outlook remains cloudy with consecutive misses and soft comps. The industry rank is in the bottom 20% and increases the likelihood of continued underpeformance.
Additional content:
5 Geopolitical Factors Which Have Affected Oil Prices in 2018
This year, oil prices have been spiking and hitting prices which have not been seen since 2014. However, thanks to more recent news, the continuous rally finally seems to have come to a slow halt.
Last Wednesday, with the announcement that Libya’s state-run National Oil Corp. is resuming full production of oil, oil prices plunged. Though prices seemed to rise again on Friday due to mixed signals and uncertainties, along with the latest trade threats, oil prices slid again today.
There has also speculation on the possibility that Russia might commit to increasing its oil production to contribute to the global oil supply, which also affected the slide.
However, this slump is very recent. For the last couple of months, oil has been trending upward, due to a number of international factors. Let’s take a closer look at some of the main geopolitical events in the last couple months that affected the price of oil:
1. Venezuela's Falling Oil Production
With Venezuela’s hyperinflation plaguing the welfare of the people, the country’s crude production has also been going on a downward spiral. In fact, Venezuela’s crude production has been falling for the last 25 months, according to the numbers shown by OPEC.
Venezuela now produces almost half of the oil it did two decades ago. Venezuela’s oil company, PDVSA, used to be the main source of foreign income for the government during the height of its days. Now, due to a lack of investment and maintenance, its future seems bleak.
Without any signs of a turnaround, it can be expected that Venezuela’s oil export will continue to drop. This crisis has lowered the global oil supply, lifting the price of the commodity higher.
2. U.S. Sanctions on Oil Imports from Iran
On May 8, President Donald Trump declared that, as a part of the U.S. withdrawal from the Iran nuclear deal, it will impose sanctions on the OPEC member and world’s fifth biggest oil producer.
Many analysts immediately reacted adversely, claiming that withdrawing from the Iranian deal was indirectly supporting higher oil prices. Then, on June 26, the State Department got more direct, saying that it expects all countries to eliminate Iranian oil import to zero—or else they will face their own U.S. sanctions.
Though the sanctions are for diplomatic reasons, such actions will inevitably show adverse effects on the global oil market and drive prices even higher.
3. OPEC’s and Russia’s Not-So-Promising Promise
On June 22, OPEC and Russia reached an agreement in Vienna to increase oil production by up to 1 million barrels a day. However, the meeting was generally very ambiguous, and specifics about which nations will pump how much were left out.
Furthermore, the increase in number of barrels was not as much as people had anticipated. So, ironically, this meeting to ease the spike actually caused oil prices to rally after its conclusion.
Four days later, the kingpin of OPEC, Saudi Arabia, said it plans to pump a record-high 11 million barrels of oil in July. However, even with Saudi Arabia’s promise, there is still not enough oil to fully replace the plunging inventory from Venezuela and Iran.
4. Power Outage in Canada
This past June, Canada’s oil production struggled due to a power outage that shut down the Syncrude facility in Alberta. At the time, the company reported that it will not be ready to begin producing again until July.
Last week, Canada-based Suncor Energy indicated that the Syncrude project would be returning to full production by September.
5. Dropping Inventory Levels from America
Although U.S. is producing record amounts of oil thanks to the Permian Basin in West Texas, the country still has its limits. Due to ever-high demand, which has seemingly exceeded supply, coupled with employee and supply shortages at the Permian Basin, the Energy Department said oil inventory decreased by 9.9 million barrels in the third week of June.
Some Permian Basin producers to watch include Pioneer Natural Resources and Apache Corp.
Bottom Line
As a result of these five separate, yet inter-related events from all around the globe, oil supply has been plunging, which naturally led to the high prices we see now.
Oil prices remain very volatile, as we can see from the past week’s action. However, with Libya’s plan of going full power mode again and Russia’s possibility of cooperation, it seems as if there is a possibility, for the first time in a while, for oil prices to decrease at a constant level.
Regardless, due to the volatile nature of oil prices, especially with so many factors contributing to its end, prices should continue to be followed closely.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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 https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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NetApp, PriceSmart, Suncor, Pioneer Natural and Apache highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – July 18, 2018 – Zacks Equity Research highlights NetApp (NTAP - Free Report) as the Bull of the Day, PriceSmart (PSMT - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis onSuncor Energy (SU - Free Report) , Pioneer Natural Resources (PXD - Free Report) and Apache Corp. (APA - Free Report) .
Here is a synopsis of all five stocks:
Bull of the Day:
Founded in April 1992 and headquartered in Sunnyvale, CA, NetApp provides enterprise storage and data management software and hardware products and services.
The company offers cloud data services, data storage software, data backup and recovery, all-flash storage, converged systems, data infrastructure management, and hybrid flash storage.
Strong Results
The company reported strong results for its fiscal fourth-quarter 2018 ended April 27, 2018. Non-GAAP earnings of 1.05 per share were ahead of the Zacks Consensus Estimate of $1.01 per share. Earning surged 22.1% year-over-year and were also above the management’s guidance.
Revenues were up 11% from the year-ago quarter, and also beat the Zacks Consensus Estimate.
“The fourth quarter marked a great finish to a strong year. We successfully pivoted to the growth areas of the market, expanded our opportunity with HCI and new cloud partnerships, and improved operational discipline to deliver sustained and profitable growth,” said the CEO.
Rising Estimates
After a strong quarterly report, analysts have significantly raised their estimates for the company.
Zacks Consensus Estimates for the current and the next fiscal year have increased to $4.06 per share and $4.75 per share respectively, from $3.97 per share and $4.62 per share, before the results.
Returning Cash to Shareholders
During fiscal year 2018, the company returned $3.97 million to shareholders through share repurchases and cash dividends. It amounted to 76% of free cash flow.
Earlier, the company announced that it will double its quarterly dividend to $0.40 per share in Q1 of FY 2019. The quarterly dividend will be paid on July 25, 2018.
Bottom Line
The stock is up almost 50% this year, but trading at about 20 times forward earnings, it does not look too expensive and with expected EPS growth rate of 13.84%, it can continue its upward trend. In this data driven economy, the demand for its products may continue to rise.
The stock currently has a Zacks Rank #1 (Strong Buy). It has Zacks Style Scores of “A” for Growth, “B” for Momentum and a VGM Score of “B.”
Bear of the Day:
Founded in 1994 and headquartered in San Diego, CA, PriceSmart is the largest operator of membership warehouse clubs in Central America and the Caribbean. It has recently entered the South American region with clubs in Colombia.
The company operates 40 warehouse clubs in 12 countries and one U.S. territory.
Disappointing Quarterly Results
The company reported quarterly earnings of 61 cents a share, missing the Zacks Consensus Estimate of 69 cents. Cost of goods sold and SG&A expenses went up during the quarter.
This was the fourth miss for the company in the trailing five quarters. Total revenues were however up 7.1% and ahead of estimates.
Shares plunged almost 8% in the after-market trading. Also, the company reported soft comparable warehouse sales performance for the month of June, further worrying investors about its outlook.
Estimates Slashed
Analysts have slashed their estimates significantly after poor results. Zacks Consensus Estimates for the current and next year are down to $3.01 per share and $3.20 per share respectively, down from $3.20 and $3.67, before the results.
The Bottom Line
Shares of this warehouse operator are down more than 10% this year but the outlook remains cloudy with consecutive misses and soft comps. The industry rank is in the bottom 20% and increases the likelihood of continued underpeformance.
Additional content:
5 Geopolitical Factors Which Have Affected Oil Prices in 2018
This year, oil prices have been spiking and hitting prices which have not been seen since 2014. However, thanks to more recent news, the continuous rally finally seems to have come to a slow halt.
Last Wednesday, with the announcement that Libya’s state-run National Oil Corp. is resuming full production of oil, oil prices plunged. Though prices seemed to rise again on Friday due to mixed signals and uncertainties, along with the latest trade threats, oil prices slid again today.
There has also speculation on the possibility that Russia might commit to increasing its oil production to contribute to the global oil supply, which also affected the slide.
However, this slump is very recent. For the last couple of months, oil has been trending upward, due to a number of international factors. Let’s take a closer look at some of the main geopolitical events in the last couple months that affected the price of oil:
1. Venezuela's Falling Oil Production
With Venezuela’s hyperinflation plaguing the welfare of the people, the country’s crude production has also been going on a downward spiral. In fact, Venezuela’s crude production has been falling for the last 25 months, according to the numbers shown by OPEC.
Venezuela now produces almost half of the oil it did two decades ago. Venezuela’s oil company, PDVSA, used to be the main source of foreign income for the government during the height of its days. Now, due to a lack of investment and maintenance, its future seems bleak.
Without any signs of a turnaround, it can be expected that Venezuela’s oil export will continue to drop. This crisis has lowered the global oil supply, lifting the price of the commodity higher.
2. U.S. Sanctions on Oil Imports from Iran
On May 8, President Donald Trump declared that, as a part of the U.S. withdrawal from the Iran nuclear deal, it will impose sanctions on the OPEC member and world’s fifth biggest oil producer.
Many analysts immediately reacted adversely, claiming that withdrawing from the Iranian deal was indirectly supporting higher oil prices. Then, on June 26, the State Department got more direct, saying that it expects all countries to eliminate Iranian oil import to zero—or else they will face their own U.S. sanctions.
Though the sanctions are for diplomatic reasons, such actions will inevitably show adverse effects on the global oil market and drive prices even higher.
3. OPEC’s and Russia’s Not-So-Promising Promise
On June 22, OPEC and Russia reached an agreement in Vienna to increase oil production by up to 1 million barrels a day. However, the meeting was generally very ambiguous, and specifics about which nations will pump how much were left out.
Furthermore, the increase in number of barrels was not as much as people had anticipated. So, ironically, this meeting to ease the spike actually caused oil prices to rally after its conclusion.
Four days later, the kingpin of OPEC, Saudi Arabia, said it plans to pump a record-high 11 million barrels of oil in July. However, even with Saudi Arabia’s promise, there is still not enough oil to fully replace the plunging inventory from Venezuela and Iran.
4. Power Outage in Canada
This past June, Canada’s oil production struggled due to a power outage that shut down the Syncrude facility in Alberta. At the time, the company reported that it will not be ready to begin producing again until July.
Last week, Canada-based Suncor Energy indicated that the Syncrude project would be returning to full production by September.
5. Dropping Inventory Levels from America
Although U.S. is producing record amounts of oil thanks to the Permian Basin in West Texas, the country still has its limits. Due to ever-high demand, which has seemingly exceeded supply, coupled with employee and supply shortages at the Permian Basin, the Energy Department said oil inventory decreased by 9.9 million barrels in the third week of June.
Some Permian Basin producers to watch include Pioneer Natural Resources and Apache Corp.
Bottom Line
As a result of these five separate, yet inter-related events from all around the globe, oil supply has been plunging, which naturally led to the high prices we see now.
Oil prices remain very volatile, as we can see from the past week’s action. However, with Libya’s plan of going full power mode again and Russia’s possibility of cooperation, it seems as if there is a possibility, for the first time in a while, for oil prices to decrease at a constant level.
Regardless, due to the volatile nature of oil prices, especially with so many factors contributing to its end, prices should continue to be followed closely.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>
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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 https://www.zacks.com/performance for information about the performance numbers displayed in this press release.