For Immediate Release
Chicago, IL – November 09, 2016 – Zacks Equity Research highlights definitely ManpowerGroup (NYSE:MAN – Free Report) as the Bull of the Day and Manitowoc Company (NYSE:MTW – Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Abraxas Petroleum Corp. (NASDAQ:(AXAS - Free Report) –Free Report),Lonestar Resources US Inc. (NASDAQ:(LONE - Free Report) –Free Report) and Energy Transfer Partners LP (NYSE:(ETP - Free Report) – Free Report).
Here is a synopsis of all five stocks:
Bull of the Day:
ManpowerGroup (NYSE:MAN – Free Report) continues to position itself for global growth. This Zacks Rank #1 (Strong Buy) continues to consistently grow earnings.
ManpowerGroup is one of the world's largest staffing companies. It helps more than 400,000 clients in 80 countries and territories with their permanent and temporary staffing needs.
Another Quarter, Another Beat
ManpowerGroup has been amazingly consistent with beating the Zacks Consensus Estimate. It did so again on Oct 21 when it reported third quarter results and beat the Zacks Consensus by 15 cents.
Earnings were $1.87 compared to the consensus of $1.72.
It has beat every quarter for 7 years with its last earnings miss coming in late 2008. That is one of the most impressive beat records on Wall Street. Here is its 5-year beat record.
Revenue rose 2% to $5.1 billion but was up 4% on a constant currency basis.
ManpowerGroup isn't just a North American company. It gets about 54% of its revenue from Europe. The company said Europe, especially Northern Europe in Germany, was showing signs of improvement.
The United States was on the soft side but the recent JOLTS report saw the highest quit rate in September since May 2010 which means employees are willing to leave jobs and move. This is usually a good sign for staffing companies.
ManpowerGroup said it saw strong growth in permanent recruitment and in its workforce solutions segment.
Bear of the Day :
The Manitowoc Company (NYSE:MTW – Free Report) is still stuck in the downward spiral of the mobile crane business. This Zacks Rank #5 (Strong Sell) does not see an end to the challenging market conditions yet.
Manitowoc makes cranes and lift solutions in 20 countries. Headquartered in Wisconsin, it provides crawler cranes, tower cranes and mobile cranes for the heavy construction industry.
In 2015, half of its revenue was generated outside of the United States.
A Miss in the Third Quarter
On Nov 1, Manitowoc reported its third quarter results but it had already released its preliminary numbers earlier.
Even with releasing the preliminary numbers, it still missed on the Zacks Consensus Estimate by 2 cents. Earnings were a loss of $0.28 compared to the Zacks Consensus Estimate of a loss of $0.26.
Sales fell to $349.8 million from $438.2 million in the third quarter last year. The decline was primarily due to continued deterioration in the mobile crane markets, mostly in North America and the Middle East.
In better news, tower cranes are seeing growth due to residential and commercial construction trends, especially in Western Europe.
But that's not enough to stabilize the earnings picture.
2016 and 2017 Estimates Cut Again
The near term outlook is still grim. 8 estimates were cut since the earnings report which has pushed the 2016 Zacks Consensus Estimate down to a loss of $0.40 from a loss of $0.29.
This is an earnings decline of 157% from 2015 where the company managed to earn $0.70 but that also included its commercial food service business which was spun-off.
Orders remain on the downward track. Third quarter orders fell 8% year over year due to continued softness in the North American and Middle East markets.
2017 shows some improvement but the analysts are still expecting a loss. The estimates have been cut for 2017 again and have pushed the Zacks Consensus down to a loss of $0.13.
90 days ago, the analysts were optimistic and expected to see earnings of $0.14.
Tough Time to Invest
With earnings expected to be negative this year and next, there's not a lot of incentive for investors to be in the stock.
The big drop in the shares in the 2-year chart was due to its spin-off of its commercial foodservice supply business, Manitowoc Foodservice.
3 Energy Stocks Likely to Beat Q3 Earnings Estimates
With the current earnings cycle drawing to a close and very few S&P 500 members left to report their financial results, we now have a clearer picture of the current trends.
It is a well-documented fact that the ‘Oils/Energy’ sector has been one of the weakest in the past several quarters. Nonetheless, this space has seen certain favorable developments in recent times – the OPEC’s decision to curb production, improvement in crude price, and increase in U.S. rig count to name a few – that might turn the tide for this beleaguered space. Let’s take a look at the performance of Oil/Energy sector in the July-September period and pick stocks that are expected to beat their earnings estimates when they release their quarterly results. Going by our Earnings Preview report dated Nov 4, 2016, about 94.4% of the Oil/Energy companies have already reported with a beat ratio of 73.5%.
Before going into the details we will first analyze how crude and natural gas prices behaved. We shall also see how these commodity prices influenced the fate of the energy players.
Oil & Natural Gas Pricing in Q3
The pricing scenario for natural gas was much better in the third quarter, both on a sequential and an annualized basis. However, oil prices were weaker than the July-September quarter of 2016. Despite the persistent weakness in crude, the commodity price improved significantly from the mid-February lows. The improvement in commodity prices is undoubtedly favorable for upstream energy players as these firms would now be able to continue exploration and production activities by hiring more drillers.
This is evidenced by the substantial increase in the U.S. rig count in recent times as indicated by Baker Hughes Inc.’s (BHI) – the company’s data issued since 1944 is as an important yardstick for energy service providers in gauging the overall business environment of the oil and gas industry – rig count for Sep 2016. In the U.S., the total number of rigs increased from the Aug 2016 count owing to a rise in the number of land rigs.
Developments in this front should be favorable for upstream energy players in terms of improved production and prices. The midstream energy players, on the other hand, are poised to gain in third quarter as the oversupplied commodity market might increase the need for storage and transportation of oil and gas.
How to Make the Right Picks?
Given the plethora of issues faced by the Oils/Energy sector, picking the most investment-worthy stock is undoubtedly a daunting task. This is where the Zacks methodology come to the rescue. One could narrow down the list using the positive Earnings ESP as a guide, along with a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold).
Earnings ESP is our proprietary methodology for identifying stocks that have high chances of surprising in their next earnings announcement. It shows the percentage difference between the Most Accurate estimate and the Zacks Consensus Estimate.
Our research shows that for stocks with this combination, the chance of a positive earnings surprise is as high as 70%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
San Antonio, TX-based Abraxas Petroleum Corp. (NASDAQ:(AXAS - Free Report) – Free Report) is involved in exploitation and development of oil and gas resources in the U.S. Abraxas Petroleum’s is likely to beat on third-quarter earnings as it has an Earnings ESP of +25.00% and a Zacks Rank #3. The company is expected to report third-quarter results before the opening bell onNov 14.
Lonestar Resources US Inc. (NASDAQ:(LONE - Free Report) – Free Report), based in Fort Worth, TX, is an upstream energy firm engaged in activities like acquisition and development of unconventional oil and gas resources in the U.S. The company will likely release third-quarter results on Nov 18. We expect Lonestar Resources to surpass expectations as it has an Earnings ESP of +16.67% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here .
Dallas, TX-based Energy Transfer Partners LP (NYSE:(ETP - Free Report) – Free Report) is an MLP engaged primarily in the gathering, processing, storage and transportation of natural gas through a network of pipelines spanning some 24,000 miles. The partnership will report third-quarter results on Nov 9, after the closing bell. We believe the partnership will beat our estimates given its Zacks Rank #3 and Earnings ESP of +11.54%.
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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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Continuous analyst coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
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