For Immediate Release
Chicago, IL – November 1, 2018 – Zacks Equity Research highlights Decker’s Outdoor Corp. (DECK - Free Report) as the Bull of the Day, Thor Industries (THO - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Sony Corp. (SNE - Free Report) , Intel Corp. (INTC - Free Report) and PayPal Holdings, Inc. (PYPL - Free Report) .
Here is a synopsis of all five stocks:
Bull of the Day:
Based in Goleta, CA, Decker’s Outdoor Corp. is a retailer that specializes in innovative footwear, apparel, and accessories. Decker’s has a unique portfolio of brands that includes UGG, Koolaburra, HOKA ONE ONE, Teva, and Sanuk, and its products are sold in over 50 countries through department and specialty stores, company-owned retail stores, and online.
Better-Than-Expected Q2 Earnings
Recently, Decker’s reported nice results for its second quarter.
Earnings of $2.38 topped the Zacks Consensus Estimate of $1.72 and improved substantially from the $1.54 reported in the prior-year quarter.
Revenues grew 4% to $501.9 million and also came ahead of our consensus estimate. This marked the seventh successive quarter of a positive sales surprise.
Net sales growth benefited greatly from the company’s HOKA ONE ONE brand, as well as a rise in domestic UGG e-commerce sales, Asia-Pacific wholesale sales, and Koolaburra sales.
In the earnings release, CEO Dave Powers said “[T]he Company continues to execute well on our long-term plan of improving levels of profitability. Additionally, our confidence in our strategy, the momentum we see in the business and the strength of the brand portfolio has led us to raise our fiscal year 2019 guidance.”
Revenues are now expected to be in the range of $1.935 billion to $1.960 billion, with earnings in the range of $6.65 to $6.85 per share. The company had earlier guided adjusted earnings in the range of $6.25-$6.45 per share.
Bear of the Day:
Thor Industries is a company that manufactures a wide range of recreational vehicles (RVs) at various production facilities throughout Indiana and Ohio. They sell their RVs through independent dealers in the U.S. and Canada.
Shares of THO have experienced a rocky stretch lately, falling more than 55% year-to-date, and mixed results in Thor’s second-quarter earnings report didn’t much help the stock.
Earnings of $1.67 per share missed the Zacks Consensus Estimate and fell roughly 26% from the year-ago period.
Revenues hit $1.87 billion, which did beat our consensus figure but slumped 3.1% year-over-year.
Gross profit decreased 18.9% to $244.4 million, while gross profit margin fell 13%.
Sales of Towable RVs declined 13.2% year-over-year to $1.14 billion, and pre-tax income from the segment decreased 28.3% year-over-year due to elevated dealers’ inventory levels at certain locations, among other factors.
Sales from Motorized RVs dropped 13.2% year-over-year.
“Our fourth quarter results reflect the actions taken during the period to balance dealer inventory levels," said Bob Martin, president and CEO. “We believe our reduced production levels, combined with higher promotional costs and solid retail demand, have improved the position of our dealers' inventories as they enter the new model year and prepare for the upcoming Dealer Open House.
3 Blue Chip Tech Stocks to Buy Now
Attempting to call a bottom during October’s brutal stretch of trading was not an easy task, but the indexes do seem to have found some stability, and investors are starting to pile back into the stocks that were punished by volatility the most.
This might mean that the world’s tech leaders, which have dominated Wall Street over the past several years, are now on sale. Tech has been at the helm of our historic bull market, and it seems likely to remain that way, so long as the bull trudges along.
Of course, this year’s volatility has made some investors hesitant, with bearish traders quick to draw similarities between this latest tech rally and the infamous dot-com bubble of the late 90s and early 2000s.
However, unlike the dot-com bubble, there is real earnings and revenue growth fueling this tech rally. In fact, the average P/E ratio of our “Computer and Technology” sector currently sits at 19.2, which compares favorably to the dot-com era’s average that soared into the 100s for a few weeks.
Another interesting trend in today’s tech rally is that, rather than obsessing over the next big thing, investors seem to rewarding tried-and-true brands for their respectable growth. This means that some of the strongest tech stocks are the household names that consumers already know and love.
With that said, check out these three blue chip tech stocks to buy now:
1. Sony Corp.
This Japanese electronics giant has a dominant position with many key products, including audio and video equipment, televisions, displays, semiconductors, game consoles, computers and computer peripherals, and telecommunication equipment. Sony is currently sporting a Zacks Rank #1 (Strong Buy) and looks like a promising tech stock for both the near term and in the coming years.
Even with recent selling, Sony shares are up about 18% on the year, but shares are still reasonably valued. The stock is trading at about 13x earnings and has a PEG ratio of 1.4, both of which present discounts to their industry averages.
Meanwhile, management is generating $5.94 in cash per share, which should strengthen the company’s ability to invest in new technologies. Earnings growth is expected to reach nearly 27% fiscal year, and that should be inspired by revenue growth, expansion expected to continue on the top line going forward.
2. Intel Corp.
Semiconductor stocks have had a rough year as Wall Street eyes the end of the industry’s super cycle. However, many analysts have already suggested that the peak to trough pullback in today’s connected world will be relatively mild, and right there to capitalize is chip behemoth Intel.
Intel has quickly gone on the offensive to win back the market share it has lost to AMD and Nvidia in recent years, and its most recent quarter proved that things are working out. Earnings per share totaled $1.40, crushing estimates and improving more than 38% year over year.
INTC is now sporting a Zacks Rank #1 (Strong Buy), and market-wide selling has its valuation looking attractive. In fact, a Forward P/E of 10.6 and a PEG of 1.3 put Intel at its cheapest level in recent memory.
3. PayPal Holdings, Inc.
Traditionally speaking, blue chips are going to have a lot more trading history than PayPal, which debuted as an individual stock just over three years ago. But PayPal had already established itself as the top dog in online payments well before its spin-off, and all the stock has done since then is build one of the most consistent and attractive charts on Wall Street.
Now, PayPal is a household name with a market cap over $100 billion. The stock currently sports a Zacks Rank #2 (Buy) and is projected to see a long-term annual earnings growth rate of nearly 18%. Plus, the stock has a PEG of 1.9, so that EPS growth is coming at a great price right now. PayPal has never missed earnings estimates since it IPO’d and has put together several impressive years.
3 Medical Stocks to Buy Now
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So are big potential profits for early investors. Zacks has released an updated Special Report that explains this breakthrough and names the best 3 stocks to ride it.
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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.
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.
Strong Stocks that Should Be in the News
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