For Immediate Release
Chicago, IL – August 08, 2017 – Zacks Equity Research highlights Carolina Financial (NASDAQ:(CARO - Free Report) – Free Report)as the Bull of the Day AutoNation (NYSE:(AN - Free Report) – Free Report)as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Lam Research (NASDAQ:(LRCX - Free Report) – Free Report),Sony Corp. (NYSE:(SNE - Free Report) – Free Report) andHeineken NV (OTCMKTS:(HEINY - Free Report) – Free Report).
Here is a synopsis of all five stocks:
Bull of the Day:
Leading the way after Election Day, financials did very well. Out of the gate, anticipation of favorable business conditions and a rising rate environment helped out domestic banks. Things cooled down a bit in the spring but here in the summer it looks like the financials are back in full swing. I dug up an idea here for the Bull of the Day which is a smaller financial company you may not have heard of.
Carolina Financial (NASDAQ:(CARO - Free Report) – Free Report) operates as a bank holding company for CresCom Bank that provides a range of commercial and retail banking financial services in South Carolina and North Carolina. The company operates in Community Banking and Wholesale Mortgage Banking segments. It offers checking accounts, commercial accounts, savings accounts, money market accounts, retirement accounts, longer-term certificates of deposit, noninterest-bearing demand accounts, and interest-bearing demand accounts to individuals, businesses, associations, organizations, and governmental authorities.
The big story here for Carolina Financial is the revenue and earnings growth estimates. This year Carolina Financial is slated to generate 31.46% revenue growth. That’s not a one-off either as next year the revenue growth is estimated to be 55.86%. Translated over to EPS growth, the company is looking for 13.72% growth this year and 15.82% next year.
Analysts have been increasing their earnings estimates for Carolina Financial. The bullish revisions have pushed our Zacks Consensus Estimate for the current year from $1.79 to $1.87. Next year’s number has gone up from $2.03 to $2.16 as a result of the recent revisions.
There’s been a lot of attention put on auto sales recently. We’ve started to see a bit of a downtick in sales while rates are beginning to move to the upside. Add to that a ton of cars which are coming back on leases and putting pressure on used car prices and you’re starting to see there may be some storms on the horizon. Today’s Bear of the Day is an auto dealership who has been experiencing some pressure.
AutoNation (NYSE:(AN - Free Report) – Free Report)operates as an automotive retailer in the United States. The company operates in three segments: Domestic, Import, and Premium Luxury. It offers a range of automotive products and services, including new and used vehicles; and parts and services, such as automotive repair and maintenance services, and wholesale parts and collision services. The company also provides automotive finance and insurance products comprising vehicle services and other protection products, and arrangement of finance for vehicle purchases through third-party finance sources.
It looks like this year is going to be a little tough to get through for AutoNation. The current quarter EPS estimates are projecting a 14.75% contraction in earnings. This year looks like it’s going to round out at an 8.71% contraction. This contraction is coming on revenue growth of only 1.08%.
Seven analysts have come out and dropped their EPS estimates for the current year and next year over the last week. The bearish revisions have cut the current year Zacks Consensus Estimate from $3.92 down to $3.73. Next year’s consensus has also come down, going from $4.30 down to $4.04.
Themes That Strike a Chord: Global Week AheadFor the Global Week Ahead, I found three broad themes that heavily impact U.S. and global stocks.
Reuters identified these — and all are worth sharing again.
August Angst: With the Dow Jones Industrial Average touching 22,000 in the past week, some investors and traders are bracing for a rocky second half of 2017.
The August through October time frame is the only three-month period to have a negative average return going back to 1928, according to Bank of America/Merrill Lynch.
Some U.S. stock market internal measures are showing signs of rally fatigue, as the number of new stocks striking 52-week lows on the New York Stock Exchange and Nasdaq has risen for seven straight days while the number marking fresh highs has declined in five of the past seven sessions.
Weak U.S. Dollar, Strong Global Stocks: An 8-percent fall since May in the greenback against a basket of other currencies has coincided with ever more record highs in MSCI's All-Country World stocks index.
While the fall in the dollar index happened alongside a reduction in expectations of more Fed rate hikes, many analysts say the dollar weakness does not reflect concerns over the U.S. economy or over the uncertainty emanating from President Donald Trump's White House.
Instead, it reflects the relatively loose monetary conditions and confidence to invest in higher-yielding assets that could see the "risk-on" stocks rally maintained for a while yet.
Tech Sector Drive: The Tech sector is seen to be a beneficiary of low rates, global growth and disruption underway across industries from retail to banking.
This has ensured that tech stocks are the best performers by some distance across each of the world's major market regions and the gap with sectors such as energy is particularly wide.
Inflows this year into tech stocks globally are running second only to the rush into EM debt, according to data from EPFR and Bank of America Merrill Lynch.
Slowing inflows into the sector over the past week, as BofA-ML points out, could be the first signs that investors are keen on banking some profits.
It is August. This means high summer and vacations to traders. Take a step back too, and look into the biggest underlying motives behind recent stock trading.
Top Zacks #1 Rank (STRONG BUY) Stocks—
Lam Research (NASDAQ:(LRCX - Free Report) – Free Report) :This is a widely followed semiconductor equipment-wafer fabrication outfit. Can the tech sector turn around? It will depend on stocks like this. The long-term Zacks VGM score is A.
Sony Corp. (NYSE:(SNE - Free Report) – Free Report) : This is the big Japanese consumer electronics giant. The stock gets a long-term VGM score of A.
Heineken NV (OTCMKTS:(HEINY - Free Report) – Free Report): This is the big alcoholic beverage distributor, based in Europe. The stock gets a long-term VGM score of B.
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.
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 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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