For Immediate Release
Chicago, IL – October 4, 2017 – Zacks Equity Research Nomad Foods (NYSE: (NOMD - Free Report) – Free Report) as the Bull of the Day, Arch Coal (NYSE: (ARCH - Free Report) – Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Sturm, Ruger & Company, Inc. (NYSE: (RGR - Free Report) – Free Report), American Outdoor Brands Corp. (Nasdaq: (AOBC - Free Report) – Free Report) and Vista Outdoor Inc. (NYSE: (VSTO - Free Report) – Free Report).
Here is a synopsis of all five stocks:
Bull of the Day:
With the market on an epic winning streak, breaking on through to all-time highs nearly every day, you’d think that I’d be on here touting some high-flying tech stock or a revolutionary biotech company. Well, I’m sure you’ve heard enough of that from other guys. So today I’m digging down into my bag of tricks to find a stock that’s in a much more boring, stable industry. That’s right folks, with the market at all-time highs I’m taking a food company as my Bull of the Day.
Nomad Foods (NYSE: (NOMD - Free Report) – Free Report)manufactures and distributes frozen foods primarily in the United Kingdom, Italy, Germany, Sweden, France, and Norway. The company’s frozen food products include fish, vegetables, poultry products, and ready meals. It sells its products directly or through distribution arrangements to supermarkets and large food retail chains under the Birdseye, Findus, and Iglo brands. The company also sells its products in Austria, Belgium, Spain, the Netherlands, Finland, Greece, Hungary, Ireland, Portugal, Switzerland, and Denmark. Nomad Foods Limited is based in Feltham, the United Kingdom.
The reason for the Zacks Rank #1 (Strong Buy) on this one is the recent earnings estimate revisions to the upside for next quarter, the current year and next year. Over the last thirty days, analysts have come out and jacked up their numbers for these three time periods. The bullish sentiment has pushed up our Zacks Consensus Estimate for next quarter from 24 cents to 35 cents. That’s translated to the current year’s numbers going up from 99 cents to $1.13 and next year from $1.10 to $1.29.
Bear of the Day:
Sometimes you just gotta let go. Let go of the past that is. Those Member’s Only jackets may have had their day in the sun but that doesn’t mean they’re going to come full circle. And maybe, just maybe, it’s time to give up on that 89 Dodge Caravan. Not exactly a classic muscle car. So for you folks out there thinking that we’re going to get an epic surge in coal and suddenly West Virginia real estate is going outpace San Francisco, allow this to serve as a cold dose of reality.
Today’s Bear of the Day is Arch Coal (NYSE: (ARCH - Free Report) – Free Report). Arch Coal, Inc. produces and sells thermal and metallurgical coal from surface and underground mines. The company’s flagship mine is the Leer Complex located in Taylor County, West Virginia. As of December 31, 2016, it operated 12 active mines located in West Virginia, Kentucky, Virginia, Illinois, Wyoming, and Colorado. The company owned or controlled, primarily through long-term leases, approximately 28,315 acres of coal land in Ohio; 1,060 acres of coal land in Maryland; 46,542 acres of coal land in Virginia; 355,205 acres of coal land in West Virginia; 103,733 acres of coal land in Wyoming; 274,273 acres of coal land in Illinois; 85,459 acres of coal land in Kentucky; 9,840 acres of coal land in Montana; 21,802 acres of coal land in New Mexico; 358 acres of coal land in Pennsylvania; and 18,443 acres of coal land in Colorado.
This summer was actually slightly positive for thermal coal prices in the US. However, the overall market sentiment towards coal continues to be bearish. You have heard some campaign promises from Trump about helping out the coal industry by reducing regulation. I’m sure that will continue to happen throughout the next few years. But is this going to be enough to counter market forces leading to lower demand for coal?
I’m not saying you can’t make a few bucks in the meantime, but there are easier places to turn a profit than in this industry. Year-to-date the S&P 500 is up 12.8% while shares of ARCH are down 6.7%.
Gun Stocks Rally After Las Vegas Mass Shooting
Shares of gun manufacturing stocks rallied on Oct 2, following the mass shooting that took place on late Oct 1 at a Las Vegas music concert. The violent attack that left more than 50 people dead and over 500 injured, has been described as the deadliest mass shooting on U.S. soil.
Why Did the Gun Stocks Spike?
Historically, gun stocks have experienced a surge following hostile attacks like mass shooting for reasons both political and emotional. Gun sales usually rise over concerns among customers that such violent events may lead to more stringent gun-control legislation. Additionally, customers race to buy guns to defend themselves in anticipation of more such attacks in future.
Prevailing Trends in the Industry
It is interesting to note that in the inexplicable dynamics of the gun industry, stocks in this space have witnessed upward movement under leaders who lobby for gun control and vice-versa. Evidently, shares of gun makers have remained constrained since Trump became President.
Statistically, U.S. Federal Bureau of Investigation (FBI) background checks in July fell 25% in over three years, according to the National Shooting Sports Foundation. That was the worst year-over-year decline in background checks since November 2013, a year after Democratic President Obama won his second election. Background checks being a strong proxy for monthly gun sales, the current numbers hint at a lackluster future for this industry.
However, in a bid to revive the gun stocks, the Trump administration recently engaged in easing the export rules of small fire arms, including assault rifles, as per report released by Reuters last month. Per the report, Trump’s aides are chalking a plan that will transfer the surveillance of international non-military firearms sales rights from the State Department to the Commerce Department. It is believed that the new law will be more “lenient” and cut the government red tape regarding the arms sales.
Notably, the shift of arms export directive to Commerce Department is expected to increase arms sales by 15-20% annually, as projected by Lawrence Keane, senior vice president for the National Shooting Sports Foundation, a firearms industry trade association.
Gun Stocks in the Spotlight
Following the Las Vegas incident, U.S. gun stocks witnessed notable gains in contrast to the double-digit slump most of them have been suffering.
Here are three top-rated gun stocks that have gained significantly following the Las Vegas mass shooting. Considering their positive traits, investors focused in the consumer discretionary stocks can keep these companies in their watchlist.
Sturm, Ruger & Company, Inc. (NYSE: (RGR - Free Report) – Free Report): This company is engaged in the design, manufacture and sale of firearms and precision metal investment castings. Its firearms include single-shot, auto-loading, bolt-action, lever action and muzzleloading rifles in a range of hunting calibers; shotguns in three gauges; .22 caliber rimfire autoloading pistols and centerfire autoloading pistols in various calibers; single and double-action as well as muzzleloading revolvers.
Its earnings are expected to grow 20.9% in the next year. The company currently holds a Zacks Rank #5 (Strong Sell).
Following the Las Vegas shooting, the company’s shares gained 3.5%, in the last trading session.
American Outdoor Brands Corp. (Nasdaq: (AOBC - Free Report) – Free Report): The company is a manufacturer and seller of firearms and accessory products for the shooting, hunting and outdoor enthusiast. The company's product comprises pistols, revolvers, rifles, guns, handcuffs and firearm-related products and accessories.
Its earnings are expected to grow 65% in the next fiscal year. The company currently holds a Zacks Rank #5.
The company’s shares gained 3.2%, in the last trading session.
Vista Outdoor Inc. (NYSE: (VSTO - Free Report) – Free Report): The company develops, manufacture and distribute optics, accessories and eyewear. Its product includes laser rangefinders, riflescopes, trail cameras, archery accessories, gun care products, mounts, powder, reloading equipment, targets as well as target systems.
Its annual earnings are expected to grow 32.7% in the next fiscal year. The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The company’s shares rose 2.4% in the last trading session.
The latest firearm attack has provided an impetus to gun stocks. However, it is unlikely that the trend will persist for long. That this attack may pose a threat to the amendment of the export law, it may also deter gun industry growth. Indeed, the amended law, if sanctioned, has the potential to significantly boost the stocks in this space. Alas, the law’s fate and so does that of the gun industry seems to hang in balance, for now.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks Research.
It's not the one you think.
See This Ticker Free >>
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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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 >>.
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