For Immediate Release
Chicago, IL – May 16, 2016– Zacks Equity Research highlights Hecla Mining (HL - Free Report) as the Bull of the Day and Suburban Propane Partners (SPH - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Citigroup Inc. (C - Free Report) , Wells Fargo & Company (WFC - Free Report) and JPMorgan Chase & Co. (JPM - Free Report) .
Here is a synopsis of all five stocks:
Bull of the Day :
Just last week, when asked, Federal Reserve Chair Janet Yellen said that she “would not completely rule out the use of negative interest rates in some future very adverse scenario.” The use of negative interest rates are already being utilized in Japan, and Central banks in Europe. Currently Europe has a -0.4% interest rate, and Japan has a -0.1% interest rate. Further, Bank of Japan Governor Haruhiko Kuroda stated that they could match the -0.4% interest rate in Europe if conditions become worse.
Just imagine what people and Europe and Japan are facing; you have to pay to keep your money in the bank. Because of this, many people in Japan and Europe are buying gold and silver instead of putting their money in a bank with negative interest rates. This shift from putting money into the banks to buying precious metals has driven the demand for gold and silver, and that is why Hecla Mining ( HL) is the Zacks Bull of the Day.
This Zacks Rank #1 (Strong Buy) is a leading low-cost U.S. silver producer with operating mines in Alaska and Idaho, and is a growing gold producer with an operating mine in Quebec, Canada. The Company also has exploration and pre-development properties in five world-class silver and gold mining districts in the U.S., Canada, and Mexico, and an exploration office and investments in early-stage silver exploration projects in Canada.
In the company’s most recent earnings report, they saw year over year gains in sales +10%, adjusted EBITDA +33% (highest level in three years), and record silver production of 4.6 million ounces. Also, the company was able to decrease exploration and pre-development expenses by $1.7 million. Further, due to the strong performance, the Board of Directors elected to declare a quarterly cash dividend of $0.0025 per common share.
According to Phillips Baker Jr., President and CEO, “Consistent with our strategy to grow despite price weakness, the first quarter production was the highest in our 500 quarter history. Our focus on high return growth like we have at San Sebastian gives Hecla leverage to increasing silver prices. And Casa Berardi's growing production from the East Mine Crown Pillar pit should do the same for gold.”
Bear of the Day:
I can only speak for myself, but I believe that most people like warm weather better than cold weather. But the weather does play a key role in some areas of commerce. The winter that is almost behind us (it still gets cold in Chicago at night), but it was a mild winter compared to recent years. According to NOAA (National Oceanic and Atmospheric Administration), the 2015-2016 winter was 13% warmer in the contiguous United States. This warmer weather negatively impacted Suburban Propane Partners (SPH), and they are our Zacks Bear of the Day.
This Zacks Ranked #5 (Strong Sell) company is a publicly traded Delaware limited partnership is engaged, through subsidiaries, in the retail and wholesale marketing of propane and related appliances and services. The Partnership believes it is the third largest retail marketer of propane in the United States, Suburban Propane Partners serves active residential, commercial, industrial and agricultural customers from customer service centers in over 40 states. The Partnership's operations are concentrated in the east and west coast regions of the United States.
In their most recent earnings report, the company saw year over year declines in adjusted EBITDA -32.3%, retail propane gallons sold -19.1%, sales of fuel oil -33.2%, revenues -32.6%, and average posted propane prices and fuel oil prices fell -27%, and -40.2% respectively.
According to Michael Stivala, President and CEO, “Our results for the second quarter of fiscal 2016 reflect the challenging operating environment stemming from record warm temperatures during this year's heating season that adversely impacted customer demand during the quarter. The flexible nature of our cost structure and the strength of our balance sheet helped mitigate some of the short-term, weather-driven earnings shortfall. Despite the lower earnings, we continued to fund all of our working capital requirements without the need to borrow under our revolving credit facility and we ended the quarter with approximately $59.0 million of cash on hand.”
Bank Stock Roundup
Over the last five trading days, banks were seen undertaking measures to combat the adverse impact of several macroeconomic concerns. Restructuring activities of banks are likely to support their financials amid a challenging operating environment.
Though capital markets are gradually stabilizing, the overall scenario is still pessimistic. This has, raised fresh doubts about the timing of the next rate hike by the Federal Reserve. Therefore, top line pressure for banks is expected to persist for some time.
Moreover, banks continue to face legal headwinds. Fast resolution of legal matters is expected to help banks to focus on improving profitability over time.
(Read: Bank Stock Roundup for the week ending May 6, 2016 )
Important Developments of the Week
1. Amid heightened regulatory scrutiny and focus on core operations, Citigroup Inc. ( C) is planning to divest its electronic market-making unit, Automated Trading Desk. Per a Bloomberg report, Chicago-based Citadel Securities has emerged as the potential buyer and Citigroup is in advanced talks with it (read more: Citigroup to Sell Automated Trading Desk to Citadel? ).
2. As traditional lending faces competitive pressure from the burgeoning online lenders, Wells Fargo & Company (WFC) launched its own online small-business loan product – FastFlex. The new loan offering that will be available to existing customers later this month is “funded as soon as the next business day” (read more: Wells Fargo Launches FastFlex to Offer Online Lending ).
3. JPMorgan Chase & Co.’s (JPM) $150 million accord to settle investor claims related to the London Whale case was approved by the U.S. District Judge George Daniels in New York. The approval will bring an end to a suit filed in 2012, which accused the bank officials of insufficient actions to avoid losses in the London Whale trading scandal (read more: JPMorgan's "London Whale" Accord Gets Judge Approval ).
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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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