Back to top

The Zacks Analyst Blog Highlights: Caterpillar, Regal Entertainment Group and Timken

Read MoreHide Full Article

For Immediate Release

Chicago, IL – August 01, 2017 – announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Caterpillar (NYSE:(CAT - Free Report) Free Report), Regal Entertainment Group (NYSE: Free Report) and Timken (NYSE:(TKR - Free Report) Free Report).  

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

Here are highlights from Monday’s Analyst Blog:

Don’t Bet on Every Race: Global Week Ahead

In the Global Week Ahead, Apple’s latest quarterly earnings report — issued after the market closes on Tuesday -- is a highlight.

Along with Apple, more than 130 companies on the S&P 500 report this week. This includes respected names like Pfizer, Time Warner, Chesapeake, Kellogg, Motorola, Kraft Heinz and Warren Buffett’s Berkshire Hathaway.

So far, second quarter (Q2) fundamentals are beating the consensus handily.

In Q2, other major multi-nationals listed in the S&P 500 helped to post substantial earnings growth at +9.1% y/y, and excellent revenue growth at +5.2% y/y.  On June 30th, expected earnings growth was a much lower +6.5% y/y.

Of the 57% of S&P 500 companies that have already posted results, 73% posted better-than-expected earnings estimates. That, too, is well above the 5-yr average.  

Yet, overall share index valuations are already high.

The S&P 500’s forward 12-month Price to Earnings ratio (the P/E) stands at 17.7. This forward-looking valuation is well above the 5-yr average at 15.4, and also well above the 10-yr average at 14.0.

The good earnings and revenue growth fundamentals — on the vast majority of company shares — are already priced in, effectively.

When faced with placing multiple bets on so many fully valued shares of companies, it can be bewildering — and you can over-bet.

I offer up this age-old wisdom drawn from horserace track betting. I pulled it from the “Art of Manliness” — You don’t have to bet on every race:

“For the beginner, the temptation is to bet on every single race in the program. While there is definitely one horse that will win each race, the astute horseplayer culls the entire program for the best bets and might, conceivably, only bet two or three races out of the entire card (card is the term for all the races that day).”

Those of us who work at Zacks let our stock ranking system help. It statistically picks the best winning hands to play. When faced with major stock index valuations stroking multi-year highs, it pays even moreto be very, very picky on individual U.S. stocks.

Or just rotate into share markets abroad that are less pricey.

Recent Zacks #1 Rank (STRONG BUY) Additions —

I offer up these examples.

Caterpillar (NYSE:(CAT - Free Report) Free Report): This is a $67 billion manufacturing, construction and mining equipment maker. After the latest strong earnings report, the long-term Zacks VGM score of B says there is more good news to price in.

Timken (NYSE:(TKR - Free Report) Free Report): This is a $3.5 billion market cap metal products, procurement, and fabrication company. Last Wednesday, the company beat on both earnings and revenues. Its long-term Zacks VGM score of A still keep these shares relatively more attractive than other parts of this fully-valued U.S. stock market.

Regal Entertainment Group

Though Hollywood has produced some solid films as of late, the overall picture for the movie industry isn’t as bright as it used to be. This is especially true if we look to some of the major theater operators, such as Regal Entertainment Group (NYSE: Free Report).

Regal recently reported earnings, and it once again missed estimates. In fact, this is actually the second straight double digit percentage miss on the bottom line for RGC, while it missed on the top line this quarter too.

Earnings are also down in year-over-year terms, so better days have clearly been in the industry before. But, with some nice box office performances in recent days, will it be enough to turn things around for RGC and the rest of the space? Let’s take a look at some of the recent estimates for a guide.

RGC Estimates

Unfortunately for investors, RGC estimates have been moving lower in recent days, including several analyst cuts in the past week alone. And for the full year period, we haven’t seen a single estimate increase in the past sixty days, nor have we for the following year either.

But it isn’t like analysts are just taking a penny or two off of their estimates, as the consensus has dramatically declined in recent weeks. The current quarter consensus has crumbled by 19% in the past two months, while we see a double-digit percentage decline to the full year estimate too.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous 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.

Strong Stocks that Should Be in the News

Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year.See these high-potential stocks free >>.

Get the full Report on CAT - FREE

Get the full Report on TKR - FREE

 Get the full Report on RGC - FREE

Follow us on Twitter:

Join us on Facebook:

Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.


Media Contact

Zacks Investment Research

800-767-3771 ext. 9339

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 information about the performance numbers displayed in this press release.

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

Caterpillar Inc. (CAT) - free report >>

Timken Company (The) (TKR) - free report >>

More from Zacks Press Releases

You May Like