Today's Must Read
Acquisitions, Membership Growth Aid Anthem (ANTM)
T-Mobile (TMUS) Buoyed by Network Capacity & Customer Growth
Thursday, May 16, 2019
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 Cisco (CSCO), Anthem (ANTM) and T-Mobile (TMUS).These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
Cisco’s shares have gained +20.7% in the past year, outperforming the Zacks Computer Networking industry's increase of +18.1%. Cisco reported stellar third-quarter results. Moreover, both top and bottom line increased year over year. Strength witnessed in the company’s Security and Applications segments drove year-over-year growth. Order strength and improving traction of the subscription-based model were other tailwinds.
The Zacks analyst likes the strong contribution from security, Infrastructure Platforms and applications. Order strength and improving traction of the subscription-based model are other tailwinds. Strengthening collaboration portfolio which now includes Webex Teams and Accompany bodes well. Further, buyout of Duo Security and Luxtera should help the company expand its IT and data center clientele.
However, weakness in switching and routing is a headwind. Arista’s intention of manufacturing switches that connect campus networks is likely to hurt Cisco as it holds a dominant position in that market.
Shares of Buy-ranked Anthem have outperformed the Zacks Medical Insurance industry in the past year (up +11.6% vs. -2.9%). The Zacks analyst thinks the company's prudent acquisitions and collaborations complement its organic growth. Its consistently growing top line paves the way for long-term growth.
A diverse product portfolio has also helped the company enhance its underwriting results. Anthem’s strong capital position backs effective capital deployment via share buybacks and regular dividends. A strong outlook for 2019 and growing membership instills investor's confidence in the company.
However, the company has been suffering from high benefit costs and selling, general and administrative expenses. Rising level of debt is another concern.
Buy-ranked T-Mobile’s shares have outperformed the Zacks National Wireless industry over the past year, gaining +31.7% vs. +9%. T-Mobile reported solid first-quarter 2019 results, wherein both the top line and the bottom line beat expectations. The company has received shareholder approval for its game-changing merger with Sprint.
This is a step forward in creating the New T-Mobile through which it plans to bring robust competition to the 5G era. The New T-Mobile would have about 127 million customers and a strong closing balance sheet. The Zacks analyst thinks T-Mobile’s network expansion strategy continues to be superior to its rivals.
Its improvement in mobile plans, network performance, deployment of LTE-U technology and attractive unlimited data are key catalysts behind the stellar performance. This is supported by improving scale, healthy free cash flow generation and liquidity. However, a highly competitive and saturated U.S. wireless market remains a major headwind.
Other noteworthy reports we are featuring today include Roper Technologies (ROP), Williams (WMB) and HSBC Holdings (HSBC).
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?
Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.
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>>>