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Apple, Alaska Air, Ribbon Communications, Avid and Camtek highlighted as Zacks Bull and Bear of the Day
Read MoreHide Full Article
For Immediate Release
Chicago, IL – September 11, 2018 – Zacks Equity ResearchApple (AAPL - Free Report) as the Bull of the Day, Alaska Air Group (ALK - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Ribbon Communications, Inc. (RBBN - Free Report) , Avid Technology, Inc. and Camtek Ltd. (CAMT - Free Report) .
Shares of Apple have surged over 20% in the last six months to help the firm become the first publicly listed U.S. company to reach $1 trillion in market value. Now, amid some negative trade war speculation, Apple is set to announce its newest products later this week. So, let’s take a look at why Apple still looks like a must buy at this point.
Overview
Right at the top, investors should note that some of President Donald Trump’s recent tariff proposals could negatively impact Apple, which might force the company to raise prices on some of its products in the U.S., according to Bank of America Merrill Lynch and Loup Ventures.
With that said, Apple’s outlook is impressive and CEO Tim Cook is expected to introduce the firm’s latest iPhones and other products at Apple’s Steve Jobs Theater on Wednesday, September 12. The event will likely see Apple unveil the newest versions of Apple Watch, AirPods, and its updated iPhones, which will include its now-standard off-year "S" updates.
At a time when the high price of Apple’s iPhone X helped lift quarterly iPhone revenues by 20%, it is worth noting that the company has boosted its offerings outside of its flagship smartphone. One of Apple’s most talked about growth units is the firm’s Services business, which includes AppleCare, Apple Music, Apple Pay, and other non-hardware offerings. Services revenues surged 31% last quarter.
Shares of Alaska Air Group, which owns Alaska Airlines and Horizon Air, have slipped roughly 8% since the start of the year due to rising fuel costs. ALK stock has jumped over the last three months, but the firm’s outlook doesn’t seem very promising.
Overview
Alaska Air officially purchased Virgin America for $2.6 billion in the spring of 2016. The company reportedly beat out the likes of JetBlue to acquire the airline. Alaska Air has since rebranded Virgin America under its own brands, which some suggest has hurt the company.
The airline firm also grabbed some sad and negative attention in early August after an employee stole a plane and eventually crashed it on an island in the Puget Sound. Aside from this somber event, which doesn’t reflect on Alaska Air’s actual business, the company’s second-quarter revenues jumped 3% to $2.156 billion.
However, Alaska Air’s quarterly revenues fell short of our Zacks Consensus Estimate. Meanwhile, the company’s economic fuel costs surged 34.5%. This helped the company’s adjusted quarterly earnings fall on a year-over-year basis. Investors should note that Alaska Air, like other airlines, will have to try to combat rising fuel costs. Companies might pass these increased fuel costs onto customers, which could lead to less overall traffic.
Price Movement
Moving on, shares of ALK have surged roughly 120% over the last five years, which outpaces its industry’s 53% and the S&P’s 500 74%. Unfortunately, investors will notice that the last three years have been far less kind to Alaska Air stock.
Outlook & Earnings Revisions
Now let’s take a look at what to expect from Alaska Air for the rest of the year. Our current Zacks Consensus Estimate is calling for the company’s third-quarter revenues to pop by 4.15% to hit $2.21 billion. ALK’s fiscal year revenues are projected to jump by nearly the exact same percentage to reach $8.26 billion. Clearly, the company looks like it is expected to expand its top line, but its earnings outlook appears pretty grim.
ALK’s adjusted quarterly earnings are projected to plummet by 30.8% to hit $1.55 per share. Meanwhile, Alaska Air’s fiscal year EPS figure is expected to fall by over 37% to touch $4.16.
Plus, ALK has received six downward earnings estimate revisions for its third quarter over the last 60 days, against just one upward change. Alaska Air has also seen nine full-year and nine fiscal 2019 revisions during this same time period, against only a few positive revisions.
Bottom Line
Alaska Air is currently a Zacks Rank #5 (Strong Sell) based on its negative earnings revision trend, which helps to show that analysts are less positive about ALK’s future earnings outlook as fuel costs continue to cloud the industry’s near-term strength.
Additional content:
3 Tech Stocks Under $10 to Buy Now
Here at Zacks, we don’t generally classify stocks as “cheap” or “expensive”, and rather than looking at the stock’s face value, we have a system that puts an emphasis on earnings estimate revisions to find stocks that will hopefully be winners for investors.
That being said, low-priced stocks can be attractive to smaller investors that can’t necessarily afford large stakes in companies with higher priced stocks.
When looking at these low-priced stocks, we can look at the same trends in growth, value, and momentum and apply the Zacks Rank to properly analyze the potential that these companies have. We are also keenly aware of the latest sector trends and make sure to cover all of the hottest industries.
Today we’ve highlighted three stocks that fall into the broad “technology” sector. Each of these three stocks is currently trading for less than $10 per share and holds a Zacks Rank #2 (Buy) or better. Take a look at the strong estimate revision activity and other factors that make these tech companies stick out right now:
1. Ribbon Communications, Inc.
Prior Close: $6.84
Ribbon Communications is a leading provider of voice infrastructure products for the new public network, and the company offers a variety of cloud-based, VoIP, and IP-based communications solutions. Formed by the merger of Sonus and GENBAND, Ribbon is currently sporting a Zacks Rank #1 (Strong Buy).
Following the merger, earnings and revenue are expected to grow over the next year, but investors certainly are not paying a significant premium for that right now. The stock is trading at a reasonable 19.5x forward earnings and has a PEG of 1.6.
RBBN has slumped a bit over the trailing month, but shares have still surged nearly 40% since the start of April. We have seen the stock trade at almost $8.50 within the past year, so it might not take much for investors to push this thing back toward the top end of its range.
2. Avid Technology, Inc.
Prior Close: $6.27
Avid develops and sells a portfolio of software products used to create digital media content, including professionally-used music and video creation solutions. The stock is currently sporting a Zacks Rank #2 (Buy). AVID is a popular momentum pick right now, but the stock still sports a “B” grade in the Value category of our Style Scores system despite these recent gains.
Indeed, AVID has added about 32% in the past month and a half, including a nice 4% tick higher in the past five trading sessions. These gains have stretched the company’s P/E quite a bit, but its P/S ratio sits at a very attractive 0.6, and many investors find this value metric more revelatory for smaller tech and software firms like Avid.
3. Camtek Ltd.
Prior Close: $8.83
Camtek is a developer of automatic optical inspection systems that are used to enhance both production processes and yield for manufacturers in the circuit board and semiconductor industries. CAMT is holding a Zacks Rank #2 (Buy) and belongs to a group of businesses which sit in the top 1% of the Zacks Industry Rank.
Camtek is projected to see its full-year earnings improve by 96% in 2018 and an additional 25% in 2019. Still, the valuation is attractive here at just 16.8x forward earnings. The stock is also a hot momentum option and has surged about 81% over the past year. CAMT could break into new 52-week highs as investors react to its remarkable growth story.
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.
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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Apple, Alaska Air, Ribbon Communications, Avid and Camtek highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – September 11, 2018 – Zacks Equity Research Apple (AAPL - Free Report) as the Bull of the Day, Alaska Air Group (ALK - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Ribbon Communications, Inc. (RBBN - Free Report) , Avid Technology, Inc. and Camtek Ltd. (CAMT - Free Report) .
Here is a synopsis of all five stocks:
Bull of the Day:
Shares of Apple have surged over 20% in the last six months to help the firm become the first publicly listed U.S. company to reach $1 trillion in market value. Now, amid some negative trade war speculation, Apple is set to announce its newest products later this week. So, let’s take a look at why Apple still looks like a must buy at this point.
Overview
Right at the top, investors should note that some of President Donald Trump’s recent tariff proposals could negatively impact Apple, which might force the company to raise prices on some of its products in the U.S., according to Bank of America Merrill Lynch and Loup Ventures.
With that said, Apple’s outlook is impressive and CEO Tim Cook is expected to introduce the firm’s latest iPhones and other products at Apple’s Steve Jobs Theater on Wednesday, September 12. The event will likely see Apple unveil the newest versions of Apple Watch, AirPods, and its updated iPhones, which will include its now-standard off-year "S" updates.
At a time when the high price of Apple’s iPhone X helped lift quarterly iPhone revenues by 20%, it is worth noting that the company has boosted its offerings outside of its flagship smartphone. One of Apple’s most talked about growth units is the firm’s Services business, which includes AppleCare, Apple Music, Apple Pay, and other non-hardware offerings. Services revenues surged 31% last quarter.
Bear of the Day:
Shares of Alaska Air Group, which owns Alaska Airlines and Horizon Air, have slipped roughly 8% since the start of the year due to rising fuel costs. ALK stock has jumped over the last three months, but the firm’s outlook doesn’t seem very promising.
Overview
Alaska Air officially purchased Virgin America for $2.6 billion in the spring of 2016. The company reportedly beat out the likes of JetBlue to acquire the airline. Alaska Air has since rebranded Virgin America under its own brands, which some suggest has hurt the company.
The airline firm also grabbed some sad and negative attention in early August after an employee stole a plane and eventually crashed it on an island in the Puget Sound. Aside from this somber event, which doesn’t reflect on Alaska Air’s actual business, the company’s second-quarter revenues jumped 3% to $2.156 billion.
However, Alaska Air’s quarterly revenues fell short of our Zacks Consensus Estimate. Meanwhile, the company’s economic fuel costs surged 34.5%. This helped the company’s adjusted quarterly earnings fall on a year-over-year basis. Investors should note that Alaska Air, like other airlines, will have to try to combat rising fuel costs. Companies might pass these increased fuel costs onto customers, which could lead to less overall traffic.
Price Movement
Moving on, shares of ALK have surged roughly 120% over the last five years, which outpaces its industry’s 53% and the S&P’s 500 74%. Unfortunately, investors will notice that the last three years have been far less kind to Alaska Air stock.
Outlook & Earnings Revisions
Now let’s take a look at what to expect from Alaska Air for the rest of the year. Our current Zacks Consensus Estimate is calling for the company’s third-quarter revenues to pop by 4.15% to hit $2.21 billion. ALK’s fiscal year revenues are projected to jump by nearly the exact same percentage to reach $8.26 billion. Clearly, the company looks like it is expected to expand its top line, but its earnings outlook appears pretty grim.
ALK’s adjusted quarterly earnings are projected to plummet by 30.8% to hit $1.55 per share. Meanwhile, Alaska Air’s fiscal year EPS figure is expected to fall by over 37% to touch $4.16.
Plus, ALK has received six downward earnings estimate revisions for its third quarter over the last 60 days, against just one upward change. Alaska Air has also seen nine full-year and nine fiscal 2019 revisions during this same time period, against only a few positive revisions.
Bottom Line
Alaska Air is currently a Zacks Rank #5 (Strong Sell) based on its negative earnings revision trend, which helps to show that analysts are less positive about ALK’s future earnings outlook as fuel costs continue to cloud the industry’s near-term strength.
Additional content:
3 Tech Stocks Under $10 to Buy Now
Here at Zacks, we don’t generally classify stocks as “cheap” or “expensive”, and rather than looking at the stock’s face value, we have a system that puts an emphasis on earnings estimate revisions to find stocks that will hopefully be winners for investors.
That being said, low-priced stocks can be attractive to smaller investors that can’t necessarily afford large stakes in companies with higher priced stocks.
When looking at these low-priced stocks, we can look at the same trends in growth, value, and momentum and apply the Zacks Rank to properly analyze the potential that these companies have. We are also keenly aware of the latest sector trends and make sure to cover all of the hottest industries.
Today we’ve highlighted three stocks that fall into the broad “technology” sector. Each of these three stocks is currently trading for less than $10 per share and holds a Zacks Rank #2 (Buy) or better. Take a look at the strong estimate revision activity and other factors that make these tech companies stick out right now:
1. Ribbon Communications, Inc.
Prior Close: $6.84
Ribbon Communications is a leading provider of voice infrastructure products for the new public network, and the company offers a variety of cloud-based, VoIP, and IP-based communications solutions. Formed by the merger of Sonus and GENBAND, Ribbon is currently sporting a Zacks Rank #1 (Strong Buy).
Following the merger, earnings and revenue are expected to grow over the next year, but investors certainly are not paying a significant premium for that right now. The stock is trading at a reasonable 19.5x forward earnings and has a PEG of 1.6.
RBBN has slumped a bit over the trailing month, but shares have still surged nearly 40% since the start of April. We have seen the stock trade at almost $8.50 within the past year, so it might not take much for investors to push this thing back toward the top end of its range.
2. Avid Technology, Inc.
Prior Close: $6.27
Avid develops and sells a portfolio of software products used to create digital media content, including professionally-used music and video creation solutions. The stock is currently sporting a Zacks Rank #2 (Buy). AVID is a popular momentum pick right now, but the stock still sports a “B” grade in the Value category of our Style Scores system despite these recent gains.
Indeed, AVID has added about 32% in the past month and a half, including a nice 4% tick higher in the past five trading sessions. These gains have stretched the company’s P/E quite a bit, but its P/S ratio sits at a very attractive 0.6, and many investors find this value metric more revelatory for smaller tech and software firms like Avid.
3. Camtek Ltd.
Prior Close: $8.83
Camtek is a developer of automatic optical inspection systems that are used to enhance both production processes and yield for manufacturers in the circuit board and semiconductor industries. CAMT is holding a Zacks Rank #2 (Buy) and belongs to a group of businesses which sit in the top 1% of the Zacks Industry Rank.
Camtek is projected to see its full-year earnings improve by 96% in 2018 and an additional 25% in 2019. Still, the valuation is attractive here at just 16.8x forward earnings. The stock is also a hot momentum option and has surged about 81% over the past year. CAMT could break into new 52-week highs as investors react to its remarkable growth story.
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 >>
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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.