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Trinity Industries just reported a solid quarter and as I write this the stock is a Zacks Rank #2 (Buy). In my experience, I have seen several stocks that were Zacks Rank #2 (Buy) and following a strong quarter like this they bumped up to a Zacks Rank #1 (Strong Buy). We should see just that with TRN over the next few sessions and that is why I selected it as the Bull of the Day.
Description
Trinity Industries, Inc., is a diversified industrial company that owns complementary market-leading businesses providing products and services to the energy, chemical, agriculture, transportation, and construction sectors, among others. The company, Trinity Industries, Inc., operates in five principal business segments: the Rail Group, the Railcar Leasing and Management Services Group, the Inland Barge Group, the Construction Products Group, and the Energy Equipment Group. Trinity is engaged in the manufacture, marketing, and leasing of a wide variety of products. Trinity Industries, Inc., is traded on the New York Stock Exchange under the symbol TRN. The company is headquartered in is Dallas, Texas.
Recent Earnings
The company posted earnings of $0.43 and that was $0.06 ahead of the Wall Street Consensus. Revenues were $942M and that was below the $965M estimate.
Importantly, the rail group saw revenues of $575M and that was up from $465M in the year-ago period.
The company guided FY18 to $1.45 - $1.65 when the consensus called for $1.39.
Estimates
So clearly with the guidance coming in rather strong, we are going to see estimates move higher. I am expecting the Zacks Consensus Estimate for the year to bounce higher by 15 cents or more.
We will want to see the same for next year as well. Right now, the Zacks Consensus Estimate for 2019 is $1.70, so look for that number to move higher as well.
Earnings History
I see a solid history of beats. The company has beaten in each of the last four quarters prior to the beat tonight. The average beat over that time period is just about 20%. That means this is going to be a good long-term hold.
Valuation
There is a 26x forward earnings multiple and that is a lot for a stock that is seeing lower year over year revenue growth. Price to book at 1.13x is super low, especially for a stable business that is earning cash like this. I have to say that this could become an activist stock –meaning a big player could take a large position down here and force some changes to maximize value. The price to sales of 1.5x is low, but above the 1x barrier that I really like to see.
NVR Inc is a Zacks Rank #5 (Strong Sell) despite beating Wall Street estimates by $1.84 last week. How could a stock that posts such a big beat be the Bear of the Day? Let's find out why.
Description
NVR, Inc. operates in two business segments: homebuilding and mortgage banking. The homebuilding unit sells and constructs homes under the Ryan Homes, NVHomes and Heartland Homes brands. As a corporate entity, NVR, Inc. provides various support functions for each of its sub-entities. These include sales and marketing support, vital human resource specialists, and an advanced information technology department, which provide a network of resources utilized by NVR, Inc. holdings. NVR Mortgage is headquartered in Reston, Virginia and operates branches in the metropolitan areas in which NVR has homebuilding operations. NVR Mortgage's primary focus is to serve the needs of NVR homebuyers. NVR Settlement Services, also headquartered in Reston, VA, provides a complete range of settlement and title services to support NVR's homebuilding operations.
Recent Report
I noted above the company beat the Wall Street Consensus, but it did even better against the Zacks Consensus Estimate. I see a reported EPS number of $49.05 and that is $2.84 better than the $46.21 estimate. That is a 6.15% positive earnings surprise.
Estimates
The Zacks Rank is all about the movement in earnings estimates. When estimates move higher, the Rank follows. For NVR I see estimates for the current quarter moving lower.
Before the report the Zacks Consensus Estimate for the current quarter was at $51.95 but that has moved down to $47.64 following the print. Next quarter has the same reaction as the Zacks Consensus Estimate movd from $59.85 down to $53.76.
For the year 2018 the Zacks Consensus Estimate moved from $196 to $189.18.
Next year saw the Zacks Consensus Estimate slide from $219.21 to $203.50.
Those negative moves in the consensus estimate are the reason for the lower Zacks Rank.
Additional content:
Amazon Posts 104% Beat, Intel & Starbucks Also Outperform
After Thursday's market close, Amazon came out with a spectacular earnings beat -- $5.07 per share versus $2.49 expected in the Zacks consensus, for a positive earnings surprise of 104%. For such a gigantic company, this represents extraordinary growth. Revenues, on the other hand, slipped beneath forecasts to $52.89 billion from the $53.45 billion expected.
It's tough to get picky, however, with net sales growth of 39% year over year -- again considering the sheer size of Amazon, with its $900 billion market cap. AWS revenues topped expectations slightly to $6.1 billion, but rocketed up 49% year over year. That said, Amazon has lowered its revenue guidance looking forward; as a result, we see post-market trading on the shares start off up 4.5% but are now less than a percentage point in the green. For more on AMZN's earnings, click here.
For its part, Zacks Rank #1 (Strong Buy)-rated Intel Corp. also outperformed on its top and bottom lines: $1.04 per share in Q2 earnings beat the 96 cents expected. Revenues of $16.96 billion surpassed the $16.91 billion in the Zacks consensus. The company also upped its full-year guidance to a range of plus-or-minus $4.15 per share. However, after closing regular Thursday trading down a tad, Intel is down now another 3.5% in late trading. We'll have to delve into the conference call to see what's up there. For more on INTC's earnings, click here.
We also see top- and bottom-line beats for Starbucks Thursday afternoon, posting 62 cents per share that topped by a penny or sales of $6.31 billion, better than the $6.25 billion. Global comps were up 1%, including +1% in the Americas region and flat in Europe/Middle East/Africa. This was offset by a 1% drop in the Asian markets, and -2% in China. Yet Starbucks is in positive territory after hours, with shares slightly in the green. For more on SBUX's earnings, click here.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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 nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year. See these high-potential stocks free >>.
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Trinity Industries, NVR, Amazon, Intel and Starbucks highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – July 27, 2018 – Zacks Equity Research highlights Trinity Industries (TRN - Free Report) as the Bull of the Day, NVR Inc. (NVR - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis onAmazon (AMZN - Free Report) , Intel Corp. (INTC - Free Report) and Starbucks (SBUX - Free Report) .
Here is a synopsis of all five stocks:
Bull of the Day:
Trinity Industries just reported a solid quarter and as I write this the stock is a Zacks Rank #2 (Buy). In my experience, I have seen several stocks that were Zacks Rank #2 (Buy) and following a strong quarter like this they bumped up to a Zacks Rank #1 (Strong Buy). We should see just that with TRN over the next few sessions and that is why I selected it as the Bull of the Day.
Description
Trinity Industries, Inc., is a diversified industrial company that owns complementary market-leading businesses providing products and services to the energy, chemical, agriculture, transportation, and construction sectors, among others. The company, Trinity Industries, Inc., operates in five principal business segments: the Rail Group, the Railcar Leasing and Management Services Group, the Inland Barge Group, the Construction Products Group, and the Energy Equipment Group. Trinity is engaged in the manufacture, marketing, and leasing of a wide variety of products. Trinity Industries, Inc., is traded on the New York Stock Exchange under the symbol TRN. The company is headquartered in is Dallas, Texas.
Recent Earnings
The company posted earnings of $0.43 and that was $0.06 ahead of the Wall Street Consensus. Revenues were $942M and that was below the $965M estimate.
Importantly, the rail group saw revenues of $575M and that was up from $465M in the year-ago period.
The company guided FY18 to $1.45 - $1.65 when the consensus called for $1.39.
Estimates
So clearly with the guidance coming in rather strong, we are going to see estimates move higher. I am expecting the Zacks Consensus Estimate for the year to bounce higher by 15 cents or more.
We will want to see the same for next year as well. Right now, the Zacks Consensus Estimate for 2019 is $1.70, so look for that number to move higher as well.
Earnings History
I see a solid history of beats. The company has beaten in each of the last four quarters prior to the beat tonight. The average beat over that time period is just about 20%. That means this is going to be a good long-term hold.
Valuation
There is a 26x forward earnings multiple and that is a lot for a stock that is seeing lower year over year revenue growth. Price to book at 1.13x is super low, especially for a stable business that is earning cash like this. I have to say that this could become an activist stock –meaning a big player could take a large position down here and force some changes to maximize value. The price to sales of 1.5x is low, but above the 1x barrier that I really like to see.
Bear of the Day:
NVR Inc is a Zacks Rank #5 (Strong Sell) despite beating Wall Street estimates by $1.84 last week. How could a stock that posts such a big beat be the Bear of the Day? Let's find out why.
Description
NVR, Inc. operates in two business segments: homebuilding and mortgage banking. The homebuilding unit sells and constructs homes under the Ryan Homes, NVHomes and Heartland Homes brands. As a corporate entity, NVR, Inc. provides various support functions for each of its sub-entities. These include sales and marketing support, vital human resource specialists, and an advanced information technology department, which provide a network of resources utilized by NVR, Inc. holdings. NVR Mortgage is headquartered in Reston, Virginia and operates branches in the metropolitan areas in which NVR has homebuilding operations. NVR Mortgage's primary focus is to serve the needs of NVR homebuyers. NVR Settlement Services, also headquartered in Reston, VA, provides a complete range of settlement and title services to support NVR's homebuilding operations.
Recent Report
I noted above the company beat the Wall Street Consensus, but it did even better against the Zacks Consensus Estimate. I see a reported EPS number of $49.05 and that is $2.84 better than the $46.21 estimate. That is a 6.15% positive earnings surprise.
Estimates
The Zacks Rank is all about the movement in earnings estimates. When estimates move higher, the Rank follows. For NVR I see estimates for the current quarter moving lower.
Before the report the Zacks Consensus Estimate for the current quarter was at $51.95 but that has moved down to $47.64 following the print. Next quarter has the same reaction as the Zacks Consensus Estimate movd from $59.85 down to $53.76.
For the year 2018 the Zacks Consensus Estimate moved from $196 to $189.18.
Next year saw the Zacks Consensus Estimate slide from $219.21 to $203.50.
Those negative moves in the consensus estimate are the reason for the lower Zacks Rank.
Additional content:
Amazon Posts 104% Beat, Intel & Starbucks Also Outperform
After Thursday's market close, Amazon came out with a spectacular earnings beat -- $5.07 per share versus $2.49 expected in the Zacks consensus, for a positive earnings surprise of 104%. For such a gigantic company, this represents extraordinary growth. Revenues, on the other hand, slipped beneath forecasts to $52.89 billion from the $53.45 billion expected.
It's tough to get picky, however, with net sales growth of 39% year over year -- again considering the sheer size of Amazon, with its $900 billion market cap. AWS revenues topped expectations slightly to $6.1 billion, but rocketed up 49% year over year. That said, Amazon has lowered its revenue guidance looking forward; as a result, we see post-market trading on the shares start off up 4.5% but are now less than a percentage point in the green. For more on AMZN's earnings, click here.
For its part, Zacks Rank #1 (Strong Buy)-rated Intel Corp. also outperformed on its top and bottom lines: $1.04 per share in Q2 earnings beat the 96 cents expected. Revenues of $16.96 billion surpassed the $16.91 billion in the Zacks consensus. The company also upped its full-year guidance to a range of plus-or-minus $4.15 per share. However, after closing regular Thursday trading down a tad, Intel is down now another 3.5% in late trading. We'll have to delve into the conference call to see what's up there. For more on INTC's earnings, click here.
We also see top- and bottom-line beats for Starbucks Thursday afternoon, posting 62 cents per share that topped by a penny or sales of $6.31 billion, better than the $6.25 billion. Global comps were up 1%, including +1% in the Americas region and flat in Europe/Middle East/Africa. This was offset by a 1% drop in the Asian markets, and -2% in China. Yet Starbucks is in positive territory after hours, with shares slightly in the green. For more on SBUX's earnings, click here.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>
Get today’s Zacks #1 Stock of the Day with your free subscription to Profit from the Pros newsletter:
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 nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year. See these high-potential stocks free >>.
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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.