For Immediate Release
Chicago, IL – May 30, 2013 – Zacks Equity Research highlights Stamps.com Inc. (STMP) as the Bull of the Day and Cummins Inc. (CMI) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on OmniVision Technologies (OVTI), Pandora Media Inc. (P) and Webcom Group Inc. (WWWW).
Full analysis of all these stocks is available at https://at.zacks.com/?id=2678.
Here is a synopsis of all five stocks:
Bull of the Day:
Now's the time to take a look at Stamps.com Inc. (STMP). This Zacks Rank #1 (Strong Buy) is positioned to win additional business as post office services get pared back.
Stamps.com is one of the few "dot-com" companies left over from the dot-com era. Founded in 1996, it provides online postage services to about 465,000 registered customers. It targets small businesses, who have historically used the Post Office's postal meters for shipping.
Stamps.com software, which is an approved partner of the US Postal Service, allows businesses to print postage with just a PC, a printer and an Internet connection.
On Apr 24, Stamps.com reported record first quarter results as it crushed the Zacks Consensus by 48.5%. Earnings were 49 cents compared to the Zacks Consensus of 33 cents.
Revenue jumped 13% to $32.1 million with core PC postage revenue rising 16% year over year. The company had its highest level of total paid customers ever at 465,000. It also added the most ever in one quarter, at 30,000.
Bear of the Day:
2013 is going to be a tough year for engine maker Cummins Inc. (CMI) after first quarter sales were weak in most major end markets. While the first quarter is expected to be the worst of it, earnings are still projected to fall 7.3% for the year.
Cummins makes diesel and natural gas engines and services customers in 190 countries making it a good indicator of what is going on in the global economy.
In April, it didn't mince words as it described a "significant decline" in demand within the Engine Business in the first quarter, as total unit volumes dropped 18%. Shipments of high horsepower engines fell 24% due to weakness in the mining, oil and gas and power generation markets.
One bright spot in North America, Latin America and Korea was for engines for agricultural applications which saw demand rise modestly.
Cummins expects the first quarter to mark the low point for the year in terms of sales. However this Zacks Rank #5 (Strong Sell) also remained cautious about its full year outlook. It reaffirmed its current forecast, with revenues expected to be flat to down 5% for the year.
Latest Posts on the Zacks Analyst Blog:
OmniVision: Soft Earnings Ahead?
OmniVision Technologies (OVTI) is set to report its fourth quarter 2013 results on May 30. In the prior quarter, the company reported in line with the Zacks Consensus Estimate. Let’s see how things are shaping up for this announcement.
Growth Factors this Past Quarter
The mobile phone and entertainment markets fueled revenue growth in the third quarter. It also witnessed strength in 8 megapixel and 5 megapixel sensors due to rapid adoption of smart devices.
OmniVision has leveraged its superior technology to solidify its position in the handset market and also expanded into other areas. We like its product roadmap, growth prospects and management execution and believe that it will be able to deal with the short product life cycles and temporary slowdown in the computing and smartphone markets. We are also positive about design wins at key players, such as Apple which should boost its growth prospects further.
The Zacks Consensus Estimate for the fourth quarter stands at 8 cents while that for fiscal 2013 is 71 cents.
There were no estimate revisions for both the fourth quarter and fiscal 2013 over the past 30 days. As a result, the Zacks Consensus Estimate for both periods remains unchanged.
The chances of a big surprise are unlikely given the lack of catalysts during the quarter. The stock carries a Zacks Rank #1 (Strong Buy).
We caution against stocks with Zacks Ranks #4 and #5 (Sell rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.
Other Stocks to Consider
Our model states that a stock needs to have both a positive Zacks Earnings ESP (Read: Zacks Earnings ESP: A Better Method) and a Zacks Rank #1, #2 or #3 to beat earnings estimates. You could, therefore, consider stocks like:
Pandora Media Inc. (P), Earning ESP of +150.0% and Zacks Rank #2 (Buy)
Webcom Group Inc. (WWWW), Earnings ESP of +2.38% and Zacks Rank #3 (Hold)
Get the full analysis of all these stocks by going to https://at.zacks.com/?id=2649.
About the Bull and Bear of the Day
Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.
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Updated throughout every trading day, the Analyst Blog provides analysis from Zacks Equity Research about the latest news and events impacting stocks and the financial markets.
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