Today's Must Read
Mondelez's (MDLZ) Margins Strong on Cost Saving Initiatives
Colgate's (CL) Innovative Products to Boost Market Share
Tuesday, January 16, 2018
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 Texas Instruments (TXN), Mondelez (MDLZ) and Colgate (CL). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Buy-rated Texas Instruments’ shares have gained +51.3% over the last 12 months, outperforming the Zacks General Semiconductor industry which has gained +50.1% over the same period. The Zacks analyst likes its prudent R&D investments in several high margin, high-growth areas of the analog and embedded processing markets. This is gradually increasing its exposure to industrial and automotive markets and dollar content at customers, while reducing exposure to volatile consumer/computing markets.
Margins continue to expand on secular strength in the auto and industrial markets, a stronger mix of analog and embedded processing products and manufacturing efficiencies that include growing 300-millimeter Analog output.
Of late, estimates have remained stable ahead of the company's Q4 earnings release. The company has positive record of earnings surprises in recent quarters. However, increasing competition, unfavorable currency effect and a high debt load remain concerns.
Shares of Buy-rated Mondelez have lost -5.4% in the last one year, compared with the -4.4% dip of the Zacks Food Preparation industry. However, the Zacks analyst likes Mondelez’s attractive portfolio of iconic brands and its commanding presence in impulsive categories and fast-growing emerging markets.
The company's margins have remained constantly strong backed by cost savings and productivity gains. Mondelez’s earnings estimates for 2018 have been trending upward in the last 30 days. This reflects analysts' optimism on the stock's prospect.
However, Mondelez’s volumes have been hurt since 2014 by the elasticity impact from higher pricing and category weakness because of soft consumer demand. Moreover, with a significant portion of its sales coming from the international markets, currency is a significant top-line headwind.
Buy-rated Colgate’s shares are up +2.8% over the last six months, outperforming the Zacks Consumer Staples sector, which has gained +1.5% over the same period. The Zacks analyst likes the progress made on its Global Growth and Efficiency Program along with additional savings anticipated from the recent expansion of the program.
However, the company has been infamous among investors with its meet or beat earnings track record. Though it posted in-line earnings and topped sales estimates in third-quarter 2017, margins remained strained due to increased raw material and packaging costs, as well as higher advertising expenses. Further, it anticipates these costs to persist and impact margins in 2017.
The company also perked up its costs guidance related to charges arising from the expansion and extension of the Global Growth and Efficiency Program through Dec 31, 2019. Nonetheless, Colgate’s shareholder-friendly moves remain noteworthy. Estimates have been stable lately ahead of the fourth quarter earnings release.
Other noteworthy reports we are featuring today include Infosys (INFY), Tesla (TSLA) and Applied Materials (AMAT).
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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>>>