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Bear Of The Day: Bridgestone (BRDCY)

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Bridgestone Corp (BRDCY - Free Report) is a Zacks Rank #5 (Strong Sell) and it is the Bear of the Day today.  Let's take a look at why this stock fell to the lowest of all Zacks Ranks.

Description

Bridgestone is involved in the Automotive Industry. Their printing system allows for the real time, on-site creation of vehicle registration forms and license decals on blank stock, including the imprinting of the vehicle license plate number on the decal. This on-demand printing capability allows Departments of Motor Vehicles to substantially reduce fraud and theft, increase revenue collection, and reduce personnel, inventory, and facility costs as a result of increased efficiencies.

Earnings History

It is odd sometimes to see a stock with no earnings history, but that is what we have here.  Yes, there are reported numbers but there are no estimates to go along with them.

This is not the reason the stock fell to a Zacks Rank #5 (Strong Sell).

Estimate Revisions

The Zacks Rank cares the most about earnings estimate revisions.  I see the revisions for BRDCY are all negative and that isn't a good thing to see.  A week ago the estimate for the full year was $0.22, but it fell a dime and is now $0.12.

Next year's estimate fell by a nickel as to $1.04, down from $1.09.

This is why the stock has slipped to a Zacks Rank #5 (Strong Sell).  Full year earnings estimates have the greatest impact on the Zacks Rank.

Valuation

The valuation isn't so stiff here, with 130x the forward earnings jumping out at you... but the price to book is only 1.13x and that is rather low.  I do see the topline contracting about 31% and no one wants to see that.  The price to sales of less than one is also something that will keep me away from this stock.

I see margins falling over the last 3 quarterts and that is another thing that I don't like to see.  For now, this probably isn't the best investment vehicle.

Chart

No Chart was available at time of publication

 

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