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Teck Resources Limited and WideOpenWest have been highlighted as Zacks Bull and Bear of the Day
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For Immediate Release
Chicago, IL – March 3, 2022 – Zacks Equity Research shares Teck Resources Limited (TECK - Free Report) as the Bull of the Day and WideOpenWest (WOW - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on BP plc (BP - Free Report) , Sunoco LP (SUN - Free Report) and Valero Energy Corp. (VLO - Free Report) .
Teck Resources Limited, a Zacks Rank #1 (Strong Buy), has surged nearly 600% since the March 2020 bottom after dropping to roughly $5/share during the pandemic-induced market plunge. A very low percentage of companies complete the journey from penny stock to mid-double digits. These companies all experience remarkable growth in terms of both revenue and earnings, and TECK is no exception. The stock is currently hitting decade-long highs even as the general market continues in correction mode.
Teck Resources boasts the highest Zacks Momentum Style Score of 'A.' The company is part of the Zacks Mining – Miscellaneous industry group which ranks in the top 34% out of more than 250 Zacks Ranked Industries. Despite TECK's impressive run, the stock is still relatively undervalued.
Historical research studies suggest that approximately half of a stock's future price appreciation is due to its industry grouping. By targeting stocks contained within the top industry groups, we provide a constant 'tailwind' to our investing success.
The Mining – Miscellaneous industry group is a component of the Zacks Basic Materials sector, which ranks in the top 32% of all 16 Zacks Ranked Sectors.
Company Description
Teck Resources is engaged in the exploration, development, and production of natural resources in Asia, Europe, and North America. TECK's primary products include steelmaking coal as well as copper and zinc concentrates. The company also produces gold, silver, germanium, and cadmium, as well as chemicals and fertilizers. TECK Resources was founded in 1913 and is headquartered in Vancouver, Canada.
Earnings Trends and Future Estimates
TECK has exceeded earnings estimates in six of the past seven quarters. The lone miss came in Q4 of last year when the metals producer posted EPS of $2.02, barely missing the $2.04 estimate by -0.98%. Investors have been able to look past the slight miss as the stock has continued to outperform the market. TECK has delivered a trailing four-quarter average earnings surprise of +12.98%.
Earnings estimates for the current quarter have seen positive changes as of late. The Q1 consensus estimate has been revised upward by 55.83% to $1.87 in just the past 60 days. If the company is able to achieve this, it would translate to growth of 289.58% relative to the same quarter last year.
Analysts have also increased their full-year EPS estimates for TECK by 29.91% in the past two months. The 2022 Zacks Consensus EPS Estimate now stands at $5.56, translating to potential growth of 23.01% relative to last year. Sales are seen rising 12.15% to $12.05 billion.
What the Zacks Model Reveals
The Zacks Earnings ESP (Expected Surprise Prediction) seeks to identify companies that have recently witnessed positive earnings estimate revision activity. The technique has proven to be quite useful for finding positive surprises. In fact, when combining a Zacks Rank #3 or better with a positive Earnings ESP, stocks produced a positive surprise 70% of the time according to our 10-year backtest.
TECK has a substantial +26.91% Earnings ESP for the first quarter. Another earnings beat may be in the cards when the company reports its Q1 results on April 27th.
Let's Get Technical
Shares of TECK are up over 80% in the past year. The price ascent has not slowed down in 2022, as the stock has risen more than 33% this year.
Notice how the 50, 100, and 200-day moving averages are all sloping upward as evidenced by the blue, red, and green lines, respectively. The stock does appear a bit extended in the short-term, and bullish investors may consider waiting for a slight pullback before initiating a new purchase.
However, empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. And as we know, Teck Resources has seen a steady batch of positive revisions as of late. As long as this trend remains intact (and TECK continues to post earnings beats), the stock should continue its bullish move this year.
Bottom Line
Higher prices of the company's principal products along with a solid pipeline of projects have contributed to TECK's bullish run. Historically viewed as a hedge against inflation and currency devaluation, precious metals can be a great portfolio diversifier – particularly during times when most equities are falling. Gold in particular is perceived as a long-term store of value.
One of the best ways to target these metals from an investment perspective is to own the stocks of a mining company such as TECK. While the past few months have been treacherous for passive equity investors, gold and silver have made a stealthy move higher. Both gold (+4.79%) and silver (+7.86%) have outperformed the S&P 500 (-7.79%) year-to-date.
Buoyed by a leading industry group and sector combination, it's not difficult to see why TECK is a compelling investment. Robust sales and earnings growth along with a strong technical trend certainly warrant a closer look. Recent positive earnings estimate revisions should also serve to create a 'floor' in terms of any sudden or unexpected downside moves. If you haven't already done so, be sure to put TECK on your shortlist.
WideOpenWest operates as a cable provider primarily in the United States. The company offers high speed data, cable television, and digital telephony services to residential and business customers. WOW's basic cable services are comprised of local broadcast television and community programming as well as ultra-video products. In addition, WOW! tv+ offers traditional cable video and cloud DVR functionality, voice remote with Google Assistant, and Netflix and Google Play Store integration. WideOpenWest was founded in 2001 and is headquartered in Englewood, CO.
Flying Against the Wind
Formerly known as WideOpenWest Kite, WOW has been fighting an uphill battle. A Zacks #5 Rank (Strong Sell), WOW is a component of the Zacks Cable Television industry group, which currently ranks in the bottom 11% out of more than 250 Zacks Ranked Industries. As such, we expect this industry group as a whole to underperform the market over the next 3 to 6 months. Candidates in the bottom tiers of industry groups can often represent solid potential short candidates.
While individual stocks have the ability to outperform even when included in a poor-performing industry, the inclusion in a weaker group serves as a headwind for any potential rallies. The odds are stacked against WOW and the stock is agreeing with this notion after making a series of lower lows.
WOW is also relatively overvalued relative to its industry group.
Recent Earnings and Future Estimates
The cable provider reported Q4 results last Thursday of -$0.03/share, a -127.27% surprise compared to the $0.11 consensus. WOW has missed the mark in terms of earnings estimates in each of the past five quarters. The company has posted a trailing four-quarter average earnings miss of -183.9%. As a company, when you're missing consensus by that amount over time, you're going to be fighting against the current when it comes to the stock price.
For the current quarter, analysts have decreased their EPS estimate by -15.38% in just the past week. Declining earnings estimates are a big red flag and need to be respected. The Q1 Zacks Consensus Estimate now sits at $0.11, which would exactly match the figure from the same quarter in 2021 – not exactly the type of trend bulls are looking for. Q1 revenues are anticipated to slide -39.3% to $173.78 million, a steep decline from the $286.3 million a year ago.
Technical Outlook
As illustrated below, WOW is in a sustained downtrend. Notice how the stock has plunged below both the 50-day (green line) and 200-day (blue line) moving averages and is making a series of lower lows. It's also important to point out that both moving averages have rolled over and are sloping downward – a good sign for the bears.
Unless the stock makes some significant headway in the coming days, it appears likely that WOW will experience the dreaded death cross, wherein the 50-day moving average crosses below the 200-day moving average. With a history of earnings misses and an unpredictable equity market, the odds aren't exactly in WOW's favor.
Bottom Line
Our Zacks Style Scores depict a weakening outlook for this stock, as WOW is rated a worst-possible 'F' in both our Growth and overall VGM categories. A deteriorating fundamental and technical backdrop show that this stock is fighting an uphill battle. The fact that WOW is included in one of the worst-performing industry groups simply adds another headwind to a long list of concerns.
Potential investors should only think about including this stock in their portfolio as part of a hedge or short strategy. Bulls will want to steer clear of an overvalued WOW until the situation shows major signs of improvement.
Additional content:
BP Exits Rosneft Holdings Amid Russia-Ukraine Conflict
BP plc announced that it is withdrawing its stake in Russia-based oil and gas company, Rosneft, after operating for more than 30 years in the country.
The announcement marks the most significant movement by a western company in retaliation to Russia's attack on Ukraine.
BP was one of the biggest foreign investors in Russia before exiting its position. The company has been under immense pressure from the UK government to offload its stake in Russia.
BP has a 19.75% ownership interest in Rosneft, which it has owned since 2013. Rosneft is responsible for almost 50% of BP's oil and gas reserves and a third of its production. Notably, offloading the stake will result in charges of up to $25 billion.
In 2021, BP received revenues from Rosneft in the form of dividends, which totaled $640 million, nearly 3% of its net cash flow from operations. The company cited that it would no longer account for its share of reserves, production and profit from its stake in the exploration company.
BP is also planning an exit strategy from its other businesses in Russia, which involves three joint ventures, with a carrying value on its books of $1.4 billion. The company's board believes that these decisions are in the best long-term interests of all shareholders.
BP will take an $11-billion foreign exchange non-cash charge after exiting Rosneft, which it will no longer include in its accounts. The company also expects a non-cash charge of up to $14 billion for the carrying value of Rosneft.
BP mentioned that its move would not impact its short and long-term financial targets. Notably, it will be worth noticing if other western companies follow BP's bold stroke.
Company Profile & Price Performance
Headquartered in London, the U.K., BP is a fully integrated energy company, with a strong focus on renewable energy.
Shares of the company have underperformed the industry in the past six months. The stock has gained 17.5% compared with the industry's 37.5% growth.
Sunoco LP is a master limited partnership that engages in distributing motor fuel to roughly 10,000 customers, including independent dealers, commercial customers, convenience stores and distributors.
Sunoco currently has a Zacks Style Score of A for Value. For the quarter ended Dec 31, 2021, Sunoco declared a quarterly cash distribution of 82.55 cents per unit or $3.3020 on an annualized basis.
Valero Energy Corp. is the largest independent refiner and marketer of petroleum products in the United States. At the fourth-quarter end, VLO had cash and cash equivalents of $4,122 million.
Valero's earnings for 2022 are expected to surge 152.7% year over year. VLO currently has a Zacks Style Score of A for both Value and Growth, and B for Momentum. Through the December-end quarter, Valero returned $401 million to stockholders as dividend payments.
Bitcoin, Like the Internet Itself, Could Change Everything
Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the "Internet of Money" and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we're still in the early stages of this technology, and as it grows, it will create several investing opportunities.
Zacks' has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly.
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Teck Resources Limited and WideOpenWest have been highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – March 3, 2022 – Zacks Equity Research shares Teck Resources Limited (TECK - Free Report) as the Bull of the Day and WideOpenWest (WOW - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on BP plc (BP - Free Report) , Sunoco LP (SUN - Free Report) and Valero Energy Corp. (VLO - Free Report) .
Here is a synopsis of all five stocks:
Bull of the Day:
Teck Resources Limited, a Zacks Rank #1 (Strong Buy), has surged nearly 600% since the March 2020 bottom after dropping to roughly $5/share during the pandemic-induced market plunge. A very low percentage of companies complete the journey from penny stock to mid-double digits. These companies all experience remarkable growth in terms of both revenue and earnings, and TECK is no exception. The stock is currently hitting decade-long highs even as the general market continues in correction mode.
Teck Resources boasts the highest Zacks Momentum Style Score of 'A.' The company is part of the Zacks Mining – Miscellaneous industry group which ranks in the top 34% out of more than 250 Zacks Ranked Industries. Despite TECK's impressive run, the stock is still relatively undervalued.
Historical research studies suggest that approximately half of a stock's future price appreciation is due to its industry grouping. By targeting stocks contained within the top industry groups, we provide a constant 'tailwind' to our investing success.
The Mining – Miscellaneous industry group is a component of the Zacks Basic Materials sector, which ranks in the top 32% of all 16 Zacks Ranked Sectors.
Company Description
Teck Resources is engaged in the exploration, development, and production of natural resources in Asia, Europe, and North America. TECK's primary products include steelmaking coal as well as copper and zinc concentrates. The company also produces gold, silver, germanium, and cadmium, as well as chemicals and fertilizers. TECK Resources was founded in 1913 and is headquartered in Vancouver, Canada.
Earnings Trends and Future Estimates
TECK has exceeded earnings estimates in six of the past seven quarters. The lone miss came in Q4 of last year when the metals producer posted EPS of $2.02, barely missing the $2.04 estimate by -0.98%. Investors have been able to look past the slight miss as the stock has continued to outperform the market. TECK has delivered a trailing four-quarter average earnings surprise of +12.98%.
Earnings estimates for the current quarter have seen positive changes as of late. The Q1 consensus estimate has been revised upward by 55.83% to $1.87 in just the past 60 days. If the company is able to achieve this, it would translate to growth of 289.58% relative to the same quarter last year.
Analysts have also increased their full-year EPS estimates for TECK by 29.91% in the past two months. The 2022 Zacks Consensus EPS Estimate now stands at $5.56, translating to potential growth of 23.01% relative to last year. Sales are seen rising 12.15% to $12.05 billion.
What the Zacks Model Reveals
The Zacks Earnings ESP (Expected Surprise Prediction) seeks to identify companies that have recently witnessed positive earnings estimate revision activity. The technique has proven to be quite useful for finding positive surprises. In fact, when combining a Zacks Rank #3 or better with a positive Earnings ESP, stocks produced a positive surprise 70% of the time according to our 10-year backtest.
TECK has a substantial +26.91% Earnings ESP for the first quarter. Another earnings beat may be in the cards when the company reports its Q1 results on April 27th.
Let's Get Technical
Shares of TECK are up over 80% in the past year. The price ascent has not slowed down in 2022, as the stock has risen more than 33% this year.
Notice how the 50, 100, and 200-day moving averages are all sloping upward as evidenced by the blue, red, and green lines, respectively. The stock does appear a bit extended in the short-term, and bullish investors may consider waiting for a slight pullback before initiating a new purchase.
However, empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. And as we know, Teck Resources has seen a steady batch of positive revisions as of late. As long as this trend remains intact (and TECK continues to post earnings beats), the stock should continue its bullish move this year.
Bottom Line
Higher prices of the company's principal products along with a solid pipeline of projects have contributed to TECK's bullish run. Historically viewed as a hedge against inflation and currency devaluation, precious metals can be a great portfolio diversifier – particularly during times when most equities are falling. Gold in particular is perceived as a long-term store of value.
One of the best ways to target these metals from an investment perspective is to own the stocks of a mining company such as TECK. While the past few months have been treacherous for passive equity investors, gold and silver have made a stealthy move higher. Both gold (+4.79%) and silver (+7.86%) have outperformed the S&P 500 (-7.79%) year-to-date.
Buoyed by a leading industry group and sector combination, it's not difficult to see why TECK is a compelling investment. Robust sales and earnings growth along with a strong technical trend certainly warrant a closer look. Recent positive earnings estimate revisions should also serve to create a 'floor' in terms of any sudden or unexpected downside moves. If you haven't already done so, be sure to put TECK on your shortlist.
Bear of the Day:
WideOpenWest operates as a cable provider primarily in the United States. The company offers high speed data, cable television, and digital telephony services to residential and business customers. WOW's basic cable services are comprised of local broadcast television and community programming as well as ultra-video products. In addition, WOW! tv+ offers traditional cable video and cloud DVR functionality, voice remote with Google Assistant, and Netflix and Google Play Store integration. WideOpenWest was founded in 2001 and is headquartered in Englewood, CO.
Flying Against the Wind
Formerly known as WideOpenWest Kite, WOW has been fighting an uphill battle. A Zacks #5 Rank (Strong Sell), WOW is a component of the Zacks Cable Television industry group, which currently ranks in the bottom 11% out of more than 250 Zacks Ranked Industries. As such, we expect this industry group as a whole to underperform the market over the next 3 to 6 months. Candidates in the bottom tiers of industry groups can often represent solid potential short candidates.
While individual stocks have the ability to outperform even when included in a poor-performing industry, the inclusion in a weaker group serves as a headwind for any potential rallies. The odds are stacked against WOW and the stock is agreeing with this notion after making a series of lower lows.
WOW is also relatively overvalued relative to its industry group.
Recent Earnings and Future Estimates
The cable provider reported Q4 results last Thursday of -$0.03/share, a -127.27% surprise compared to the $0.11 consensus. WOW has missed the mark in terms of earnings estimates in each of the past five quarters. The company has posted a trailing four-quarter average earnings miss of -183.9%. As a company, when you're missing consensus by that amount over time, you're going to be fighting against the current when it comes to the stock price.
For the current quarter, analysts have decreased their EPS estimate by -15.38% in just the past week. Declining earnings estimates are a big red flag and need to be respected. The Q1 Zacks Consensus Estimate now sits at $0.11, which would exactly match the figure from the same quarter in 2021 – not exactly the type of trend bulls are looking for. Q1 revenues are anticipated to slide -39.3% to $173.78 million, a steep decline from the $286.3 million a year ago.
Technical Outlook
As illustrated below, WOW is in a sustained downtrend. Notice how the stock has plunged below both the 50-day (green line) and 200-day (blue line) moving averages and is making a series of lower lows. It's also important to point out that both moving averages have rolled over and are sloping downward – a good sign for the bears.
Unless the stock makes some significant headway in the coming days, it appears likely that WOW will experience the dreaded death cross, wherein the 50-day moving average crosses below the 200-day moving average. With a history of earnings misses and an unpredictable equity market, the odds aren't exactly in WOW's favor.
Bottom Line
Our Zacks Style Scores depict a weakening outlook for this stock, as WOW is rated a worst-possible 'F' in both our Growth and overall VGM categories. A deteriorating fundamental and technical backdrop show that this stock is fighting an uphill battle. The fact that WOW is included in one of the worst-performing industry groups simply adds another headwind to a long list of concerns.
Potential investors should only think about including this stock in their portfolio as part of a hedge or short strategy. Bulls will want to steer clear of an overvalued WOW until the situation shows major signs of improvement.
Additional content:
BP Exits Rosneft Holdings Amid Russia-Ukraine Conflict
BP plc announced that it is withdrawing its stake in Russia-based oil and gas company, Rosneft, after operating for more than 30 years in the country.
The announcement marks the most significant movement by a western company in retaliation to Russia's attack on Ukraine.
BP was one of the biggest foreign investors in Russia before exiting its position. The company has been under immense pressure from the UK government to offload its stake in Russia.
BP has a 19.75% ownership interest in Rosneft, which it has owned since 2013. Rosneft is responsible for almost 50% of BP's oil and gas reserves and a third of its production. Notably, offloading the stake will result in charges of up to $25 billion.
In 2021, BP received revenues from Rosneft in the form of dividends, which totaled $640 million, nearly 3% of its net cash flow from operations. The company cited that it would no longer account for its share of reserves, production and profit from its stake in the exploration company.
BP is also planning an exit strategy from its other businesses in Russia, which involves three joint ventures, with a carrying value on its books of $1.4 billion. The company's board believes that these decisions are in the best long-term interests of all shareholders.
BP will take an $11-billion foreign exchange non-cash charge after exiting Rosneft, which it will no longer include in its accounts. The company also expects a non-cash charge of up to $14 billion for the carrying value of Rosneft.
BP mentioned that its move would not impact its short and long-term financial targets. Notably, it will be worth noticing if other western companies follow BP's bold stroke.
Company Profile & Price Performance
Headquartered in London, the U.K., BP is a fully integrated energy company, with a strong focus on renewable energy.
Shares of the company have underperformed the industry in the past six months. The stock has gained 17.5% compared with the industry's 37.5% growth.
Zacks Rank & Key Picks
BP currently has a Zack Rank #3 (Hold).
Investors interested in the energy sector might look at the following companies that presently flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
Sunoco LP is a master limited partnership that engages in distributing motor fuel to roughly 10,000 customers, including independent dealers, commercial customers, convenience stores and distributors.
Sunoco currently has a Zacks Style Score of A for Value. For the quarter ended Dec 31, 2021, Sunoco declared a quarterly cash distribution of 82.55 cents per unit or $3.3020 on an annualized basis.
Valero Energy Corp. is the largest independent refiner and marketer of petroleum products in the United States. At the fourth-quarter end, VLO had cash and cash equivalents of $4,122 million.
Valero's earnings for 2022 are expected to surge 152.7% year over year. VLO currently has a Zacks Style Score of A for both Value and Growth, and B for Momentum. Through the December-end quarter, Valero returned $401 million to stockholders as dividend payments.
Bitcoin, Like the Internet Itself, Could Change Everything
Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the "Internet of Money" and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we're still in the early stages of this technology, and as it grows, it will create several investing opportunities.
Zacks' has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly.
See 3 crypto-related stocks now >>
Media Contact
Zacks Investment Research
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https://www.zacks.com
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.