For Immediate Release
Chicago, IL – July 5, 2013 – Zacks Equity Research highlights Dreamworks Animation SKG (-Free Report) as the Bull of the Day and Southern Copper ((SCCO - Snapshot Report) -Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on the Hasbro Inc. (HAS - Analyst Report) -Free Report), Electronic Arts Inc. (EA - Analyst Report) -Free Report) and Zynga Inc. (ZNGA - Snapshot Report) -Free Report).
Here is a synopsis of all five stocks:
Bull of the Day:
Although global markets might be facing some significant uncertainty, the U.S. is still holding up better than most. This is particularly true in the consumer market, where spending is holding up quite well.
Plus, there has also been some modest progress on the job creation front, while housing has been an especially strong component of the renewed consumer confidence. After all, with prices surging at a roughly 10% annual rate, many are likely feeling much better about their financial situations, and thus eager to spend in the second half of the year.
There are a number of ways to play this trend with stocks, such as by targeting retail companies, automotive firms, or even movie studios. Companies in the movie studio space represent an especially intriguing way to invest in this environment, as they are often overlooked as a way to play a strong consumer market. While there are a few publicly traded firms in this sector, one that is looking really good now is Dreamworks Animation SKG (-Free Report).
DWA was founded by some of the biggest names in the entertainment industry (Steven Spielberg, David Geffen, and former Disney executive Jeffrey Katzenberg), and has grown into a major studio specializing in animated films. Some of its biggest hits include ultra-popular names like those in the Shrek, Madagascar, and Kung Fu Panda series, all of which have grossed over $1 billion in their respective franchises.
Bear of the Day:
Global markets are once again reeling thanks to a number of political issues. Emerging markets are under pressure thanks to a variety of protests, while developed markets in Europe are facing uncertainty thanks to more debt concerns.
This trend has led to devastating consequences for a variety of commodity producers, as the dollar has strengthened against a number of global currencies. Plus, many key markets such as China could see reduced demand levels in the months ahead, further adding to commodity producers’ woes.
In particular, gold and silver miners have seen weakness in this environment, falling by well over 45%, as represented by the Gold Mining ETF, since the start of 2013. Yet, while many investors have been laser-focused on the precious metal market, there has also been significant weakness in the base metal world as well.
Companies in this space have been hit hard by the same issues of a strong dollar and sluggish international demand, and could thus be ones to avoid as well. One firm in particular that could struggle in this environment is Southern Copper ((SCCO - Snapshot Report) -Free Report).
SCCO is a major U.S.-based producer of copper in key Latin American countries, but especially in Peru and Mexico. The firm mines over one billion pounds of copper—for the last full year—while it smelts and refines a similar amount as well.
The company saw soaring stock prices for much of 2012, although the firm did see extreme price volatility. However, the stock has since cratered in 2013, falling by about 30% in the first half of the year.
Hasbro, EA Ink Mobile Gaming Deal
In order to cater to the increasing preference for digital toys, toy maker Hasbro Inc. (HAS - Analyst Report) -Free Report) recently inked a licensing agreement with the global leader in digital interactive entertainment business, Electronic Arts Inc. (EA - Analyst Report) -Free Report). Per the four-year deal, Electronic Arts will develop mobile compatible versions of some of Hasbro’s popular games like Monopoly, Scrabble, Game of Life, Battleship, Boggle, Clue, Risk and Yahtzee. Financial terms and conditions of the deal have not been disclosed yet.
Electronic Arts has a long-standing relationship with Hasbro and has been regularly developing digital versions of the latter’s popular games. Deals like these provide Hasbro an opportunity to participate in faster-growing digital gaming/casual entertainment category, a market that is expected to grow significantly in the years ahead.
Hasbro has been working hard to transition its product portfolio from traditional board games/toys to digital solutions to cope with recent trends. Actually, these days, toy manufacturers have been negatively impacted by age “compression” as children are growing up faster. Toy manufacturers have to battle a broad array of alternative modes of entertainment including video games, MP3 players, tablets, smartphones and other electronic devices.
Hasbro has been highly active in signing gaming deals. Some of Hasbro’s recent associations include partnerships with Callaway Digital Arts, PopCap Games, which is an operating unit of Electronic Arts and The Tetris Company, which is one of the world’s most successful video game development companies. Apart from these, in 2012, Hasbro launched a new line of gaming products in the U.S., U.K., Australia and Canada in collaboration with the world’s largest social game developer – Zynga Inc. (ZNGA - Snapshot Report) -Free Report).
Hasbro currently carries a Zacks Rank #3 (Hold).
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