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The bid came back on Wall Street yesterday, but that doesn’t mean that you should run out there and blindly buy every stock that moves. Remember, price momentum can come and go, changing on a dime at the whim of the market. However, earnings trends, those stay intact for weeks, months, even quarters at a time. Finding stocks with strong earnings trends can be a smart way to ride momentum even higher. One way to find stocks with strong earnings trends is by leaning on the time-tested power of the Zacks Rank.
Today’s Bull of the Day is one of those stocks with a very strong earnings trend. I’m talking about Zacks Rank #1 (Strong Buy) stock Douglas Dynamics. Douglas Dynamics, Inc. operates as a manufacturer and upfitter of commercial work truck attachments and equipment primarily in North America. It operates in two segments, Work Truck Attachments and Work Truck Solutions.
The Work Truck Attachments segment manufactures and sells snow and ice control attachments, including snowplows, and sand and salt spreaders for light and heavy-duty trucks, as well as various related parts and accessories. It also provides customized turnkey solutions to governmental agencies, such as Departments of Transportation and municipalities. This segment offers snow and ice management attachments under the BLIZZARD, FISHER, HENDERSON, SNOWEX, and WESTERN brand names; turf care equipment under the TURFEX brand; and industrial maintenance equipment under the SWEEPEX brand name.
This is a cyclical name with the busy season obviously being the winter. So why then would you want to buy a snow plow company in the summer? The Zacks Rank has a lot to do with it. Recently, analysts have increased their earnings estimates for the current quarter and the current year. That bullish sentiment has pushed up our Zacks Consensus Estimate for the current quarter from 43 cents to 52 cents while the current year estimate has surged from $2.12 to $2.28. That would represent year-over-year EPS growth of 11.76% for the current year. This quarter’s year-over-year growth number would come in at 18.18%. That’s on revenue growth of 5.5% for the year and 7.9% for the quarter.
With the market coming strong off the lows, it may seem tempting to find the hottest stock and jump on board. Most of us simply can’t call the exact bottom, nor the exact top of these hot stocks, I’ll admit it. However, by buying stocks with strong earnings trends, you give yourself the best chance of finding long-term profits. You should also try to avoid stocks doing the opposite. That is, stocks with earnings trends that are sinking. Making less and less every year is not a compelling story for astute investors.
One of these stocks with a weaker earnings trend is today’s Bear of the Day. I’m talking about Zacks Rank #5 (Strong Sell) Louisiana Pacific. Louisiana-Pacific Corporation, together with its subsidiaries, manufactures building products primarily for use in new home construction, repair and remodeling, and outdoor structure markets. It also markets and sells products for use in light industrial and commercial construction applications. It operates through four segments: Siding; North America Oriented Strand Board (OSB); Engineered Wood Products; and South America.
The reason for the unfavorable Zacks Rank lies in the series of earnings estimate revisions to the downside coming from analysts. Over the last sixty days, two analysts have cut their estimates for the current quarter. Four analysts have cut estimates for the current year. Those bearish moves have dropped our Zacks Consensus Estimates for the current quarter from 46 cents to 25 cents while current year estimates have come down from $1.54 to 83 cents. Next year’s numbers are down as well, dipping from $2.47 to $2.01. It’s no wonder that shares have gone from trading north of $30 in September 2018 to the $23 level where they trade at currently.
The Building Products – Wood industry sits in the Bottom 37% of our Zacks Industry Rank.
Additional content:
Facebook Roundup: Regulatory Matters a Constant Headache
The list of governments and their lists of concerns about Facebook continue to grow even as the company does everything possible to remain dominant and generate solid results quarter upon quarter.
Investors love the solid results part while remaining wary of government actions and user reactions. With that being the background, let’s see what recent regulatory challenges have been thrown up.
But first, some good news. Facebook has won an appeal at a Dusseldorf court that overturns an order by the Bundeskartellamt, which is Germany’s federal cartel office (FCO). The order sought to use existing law to restrain Facebook from combining data it was collecting across its Facebook, Instagram and WhatsApp platforms and change its terms and conditions accordingly.
The existing law provides separately for privacy-related violations and abuse of dominant position. The FCO was trying to combine the provisions to make the privacy violation a part of the antitrust complaint.
However, it failed because the Dusseldorf court didn’t agree that privacy violations by a dominant platform automatically led to antitrust issues. It also found that users agreed of their own volition to Facebook’s terms and conditions and that because they weren’t barred from sharing that same data with other companies, the anti-competitive complaint didn’t hold water.
This was for once a timely intervention, because once Facebook combines the data pools it will become more difficult to split the company. But now the case will be stuck in appeals for years. Governments have had a hard time taking big technology companies to task because the legal process is lengthy. And like other big technology companies, Facebook spends considerably on lobbying ($12.6 million in 2018, up 45% from 2016 and up 60X from 2009, CNBC reports).
Here are the other stories-
Cambridge Analytica Update
According to a string of emails that were recently brought into the public domain, it appears that Facebook staff suspected improper/illegal data scraping by Cambridge Analytica in September 2015, two months before the Guardian published its article exposing the data breach.
The company maintains that it and Mark Zuckerberg were unaware of these “unconfirmed rumors” until the Guardian article, standing by the company’s statement to legal prosecutors.
It’s significant that the so-called scraping was common among the “sketchy apps” referred to in the emails. It didn’t arouse excitement at Facebook because it was more or less business as usual.
2018 Data Breach Update
In a recent filing in the San Francisco District Court, Facebook users say that the company was aware of the access token vulnerability that led to the massive breach of 29 million user accounts in September last year. But while the company took measures to protect its own employees, it left user accounts to fate.
As a result, hackers stole profile information like birth dates, employers, education history, religious preference, types of devices used, pages followed and recent searches and location check-ins from 14 million users. The remaining 15 million users were luckier, they had just their name and contact details stolen although around 400,000 of them had posts and friends lists exposed.
Unashamed Eavesdropping
Bloomberg recently broke a story about how Facebook uses humans to transcribe some conversations between its Messenger users. Once caught, Facebook said it is a system widely used by technology companies like Apple and Microsoft to improve their artificial intelligence systems.
The company said it has now stopped the practice, as did Google and some others. Amazon said it has given users the right to opt out. Moreover, Facebook said it made sure that conversations were anonymized and user permissions taken before it acted.
Although the company said this affected U.S. users and not those in the EU, Ireland's Data Protection Commission, its lead regulator in the region, is seeking information on the matter. "Further to our ongoing engagement with Google, Apple and Microsoft in relation to the processing of personal data in the context of the manual transcription of audio recordings, we are now seeking detailed information from Facebook on the processing in question and how Facebook believes that such processing of data is compliant with their GDPR obligations," it said.
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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Douglas Dynamics, Louisiana Pacific, Facebook, Apple and Microsoft highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – August 29, 2019 – Zacks Equity Research Shares of Douglas Dynamics (PLOW - Free Report) as the Bull of the Day, Louisiana Pacific (LPX - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Facebook , Apple (AAPL - Free Report) and Microsoft (MSFT - Free Report) .
Here is a synopsis of all five stocks:
Bull of the Day:
The bid came back on Wall Street yesterday, but that doesn’t mean that you should run out there and blindly buy every stock that moves. Remember, price momentum can come and go, changing on a dime at the whim of the market. However, earnings trends, those stay intact for weeks, months, even quarters at a time. Finding stocks with strong earnings trends can be a smart way to ride momentum even higher. One way to find stocks with strong earnings trends is by leaning on the time-tested power of the Zacks Rank.
Today’s Bull of the Day is one of those stocks with a very strong earnings trend. I’m talking about Zacks Rank #1 (Strong Buy) stock Douglas Dynamics. Douglas Dynamics, Inc. operates as a manufacturer and upfitter of commercial work truck attachments and equipment primarily in North America. It operates in two segments, Work Truck Attachments and Work Truck Solutions.
The Work Truck Attachments segment manufactures and sells snow and ice control attachments, including snowplows, and sand and salt spreaders for light and heavy-duty trucks, as well as various related parts and accessories. It also provides customized turnkey solutions to governmental agencies, such as Departments of Transportation and municipalities. This segment offers snow and ice management attachments under the BLIZZARD, FISHER, HENDERSON, SNOWEX, and WESTERN brand names; turf care equipment under the TURFEX brand; and industrial maintenance equipment under the SWEEPEX brand name.
This is a cyclical name with the busy season obviously being the winter. So why then would you want to buy a snow plow company in the summer? The Zacks Rank has a lot to do with it. Recently, analysts have increased their earnings estimates for the current quarter and the current year. That bullish sentiment has pushed up our Zacks Consensus Estimate for the current quarter from 43 cents to 52 cents while the current year estimate has surged from $2.12 to $2.28. That would represent year-over-year EPS growth of 11.76% for the current year. This quarter’s year-over-year growth number would come in at 18.18%. That’s on revenue growth of 5.5% for the year and 7.9% for the quarter.
Bear of the Day:
With the market coming strong off the lows, it may seem tempting to find the hottest stock and jump on board. Most of us simply can’t call the exact bottom, nor the exact top of these hot stocks, I’ll admit it. However, by buying stocks with strong earnings trends, you give yourself the best chance of finding long-term profits. You should also try to avoid stocks doing the opposite. That is, stocks with earnings trends that are sinking. Making less and less every year is not a compelling story for astute investors.
One of these stocks with a weaker earnings trend is today’s Bear of the Day. I’m talking about Zacks Rank #5 (Strong Sell) Louisiana Pacific. Louisiana-Pacific Corporation, together with its subsidiaries, manufactures building products primarily for use in new home construction, repair and remodeling, and outdoor structure markets. It also markets and sells products for use in light industrial and commercial construction applications. It operates through four segments: Siding; North America Oriented Strand Board (OSB); Engineered Wood Products; and South America.
The reason for the unfavorable Zacks Rank lies in the series of earnings estimate revisions to the downside coming from analysts. Over the last sixty days, two analysts have cut their estimates for the current quarter. Four analysts have cut estimates for the current year. Those bearish moves have dropped our Zacks Consensus Estimates for the current quarter from 46 cents to 25 cents while current year estimates have come down from $1.54 to 83 cents. Next year’s numbers are down as well, dipping from $2.47 to $2.01. It’s no wonder that shares have gone from trading north of $30 in September 2018 to the $23 level where they trade at currently.
The Building Products – Wood industry sits in the Bottom 37% of our Zacks Industry Rank.
Additional content:
Facebook Roundup: Regulatory Matters a Constant Headache
The list of governments and their lists of concerns about Facebook continue to grow even as the company does everything possible to remain dominant and generate solid results quarter upon quarter.
Investors love the solid results part while remaining wary of government actions and user reactions. With that being the background, let’s see what recent regulatory challenges have been thrown up.
But first, some good news. Facebook has won an appeal at a Dusseldorf court that overturns an order by the Bundeskartellamt, which is Germany’s federal cartel office (FCO). The order sought to use existing law to restrain Facebook from combining data it was collecting across its Facebook, Instagram and WhatsApp platforms and change its terms and conditions accordingly.
The existing law provides separately for privacy-related violations and abuse of dominant position. The FCO was trying to combine the provisions to make the privacy violation a part of the antitrust complaint.
However, it failed because the Dusseldorf court didn’t agree that privacy violations by a dominant platform automatically led to antitrust issues. It also found that users agreed of their own volition to Facebook’s terms and conditions and that because they weren’t barred from sharing that same data with other companies, the anti-competitive complaint didn’t hold water.
This was for once a timely intervention, because once Facebook combines the data pools it will become more difficult to split the company. But now the case will be stuck in appeals for years. Governments have had a hard time taking big technology companies to task because the legal process is lengthy. And like other big technology companies, Facebook spends considerably on lobbying ($12.6 million in 2018, up 45% from 2016 and up 60X from 2009, CNBC reports).
Here are the other stories-
Cambridge Analytica Update
According to a string of emails that were recently brought into the public domain, it appears that Facebook staff suspected improper/illegal data scraping by Cambridge Analytica in September 2015, two months before the Guardian published its article exposing the data breach.
The company maintains that it and Mark Zuckerberg were unaware of these “unconfirmed rumors” until the Guardian article, standing by the company’s statement to legal prosecutors.
It’s significant that the so-called scraping was common among the “sketchy apps” referred to in the emails. It didn’t arouse excitement at Facebook because it was more or less business as usual.
2018 Data Breach Update
In a recent filing in the San Francisco District Court, Facebook users say that the company was aware of the access token vulnerability that led to the massive breach of 29 million user accounts in September last year. But while the company took measures to protect its own employees, it left user accounts to fate.
As a result, hackers stole profile information like birth dates, employers, education history, religious preference, types of devices used, pages followed and recent searches and location check-ins from 14 million users. The remaining 15 million users were luckier, they had just their name and contact details stolen although around 400,000 of them had posts and friends lists exposed.
Unashamed Eavesdropping
Bloomberg recently broke a story about how Facebook uses humans to transcribe some conversations between its Messenger users. Once caught, Facebook said it is a system widely used by technology companies like Apple and Microsoft to improve their artificial intelligence systems.
The company said it has now stopped the practice, as did Google and some others. Amazon said it has given users the right to opt out. Moreover, Facebook said it made sure that conversations were anonymized and user permissions taken before it acted.
Although the company said this affected U.S. users and not those in the EU, Ireland's Data Protection Commission, its lead regulator in the region, is seeking information on the matter. "Further to our ongoing engagement with Google, Apple and Microsoft in relation to the processing of personal data in the context of the manual transcription of audio recordings, we are now seeking detailed information from Facebook on the processing in question and how Facebook believes that such processing of data is compliant with their GDPR obligations," it said.
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Zacks Investment Research
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support@zacks.com
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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.