Today's Must Read
HP's (HPQ) Product & Marketing Initiatives to Drive Growth
Anthem's (ANTM) Growing Membership Aids Revenues, Debt Hurts
Friday August 25 2017
The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including Occidental Petroleum (OXY), HP (HPQ) and Anthem (ANTM). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Occidental Petroleum shares have suffered this year, as have shares of all oil producers, to reflect the commodity's price slide and uneven outlook. That said, it has done better than its E&P peers (the stock is down -14.9% in the year-to-date period vs. -19.3% decline for the Zacks E&P industry), reflecting Occidental's strong position in the Permian basin and solid balance sheet. The company’s earnings per share and total revenues in the second quarter exceeded expectations.
The Zacks analyst likes the company’s stable cash flow generation and its attempts to reach cash flow breakeven at low oil prices. However, like other oil and natural gas companies, it faces the risks of cost overruns and development interruptions due to delays in drilling and other approvals, property or border disputes, and equipment failures.
Shares of HP have gained +32.7% year to date, underperforming the Zacks Minicomputers industry, which has gained +38.3% over the same period. However, HP recently reported stellar Q3 results. The Zacks analyst likes the performance of HP’s PC segment, which experienced a year-over-year improvement due to growth in Commercial and Consumer revenues.
HP’s efforts to turn around the business have been commendable. The company is working on product innovation, differentiation and enhancing the capabilities of its printing business to stabilize the top line. Nevertheless, pricing pressure due to intense competition remains a major concern. A tepid IT spending environment also adds to its woes.
Anthem’s shares have gained +57.1% over the last one year, outperforming the Zacks HMO industry’s increase of +43.3%. The Zacks analyst likes the company’s diverse product portfolio, which has helped in improving underwriting results. Anthem’s strategic acquisitions, divestures and ACO arrangements are expected to pave the way for long-term growth. Its rising level of medical membership continues to boost the top line.
The company’s strong capital position backs effective capital deployment. Followed by strong results in first half of 2017, the company has raised earnings and revenue guidance for 2017. However, the company’s high-debt level poses financial risk. The company’s weak public exchange business is another worry.
Other noteworthy reports we are featuring today include Medtronic (MDT), Markel (MKL) and Ulta Beauty (ULTA).
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Note: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly Earnings Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here>>>