For Immediate Release
Chicago, IL – January 29, 2018 – Zacks Equity Research Sony (SNE - Free Report) as the Bull of the Day, Red Cott Corp (COT - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on AVX Corporation (AVX - Free Report) , Verizon Communications Inc. (VZ - Free Report) and Advantest Corp. (ATEYY - Free Report) .
Here is a synopsis of all five stocks:
Bull of the Day:
The market has been coming strong off the Christmas Eve lows. Leading the way out of the gate, tech stocks have been surging. This has helped several stocks bounce off their 52-week lows. Once the darlings of the market, tech took a mighty tumble into the fall. This restoration of valuations recently could be enough to put tech stocks on center stage again. One such tech stock is today’s Bull of the Day, Sony.
Sony Corporation designs, develops, produces, and sells electronic equipment, instruments, and devices for the consumer, professional, and industrial markets worldwide. The company offers network services related to games, videos, and music contents; and home and portable game consoles, packaged software, and peripheral devices, as well as broadcast/professional, integrated circuit card technology, and medical and imaging device solutions. It also develops, produces, markets, and distributes recorded music; publishes music; and produces and distributes animation titles, game applications based on animation titles, and various services for music and visual products.
Sony is currently a Zacks Rank #1 (Strong Buy) in the Audio/Video Production industry which ranks in the Top 14% of our Zacks Industry Rank. The reason for the favorable rank lies in the recent earnings estimate revisions to the upside coming from analysts. Current year EPS estimates have rocketed from $4.18 ninety days ago to $4.93. Next year’s number has gone from $4.35 to $4.65 in the last week alone.
The stock had a great start last year, topping out over $60 before the market ran out of steam. The retrace under $50 has provided investors with a nice entry point. With estimates still moving to the upside, it could set up Sony for another run back to the 52-highs. That high sits up at $61.02.
Bear of the Day:
With the broad market coming so strong off the lows, investors are looking for opportunities. It may be tempting to jump in there and buy the stocks which are off the most from their highs. Afterall, they are likely the stocks with the most to gain on some sort of reversion to the mean. However, that is not the best idea as these stocks are likely off their highs for a reason. One of those reasons could be a change in earnings estimates. The Zacks Rank provides an easy way for investors to screen stock ideas to see if this is in fact the case.
One stock which is off considerably from its highs, which investors may want to avoid, is today’s Bear of the Day. I’m talking about Zacks Rank #5 (Strong Sell) Cott Corp. Cott Corporation, together with its subsidiaries, operates as a route-based service company in North America and Europe. It operates in three segments: Route Based Services; Coffee, Tea and Extract Solutions; and All Other. The company's product portfolio includes bottled water, coffee, brewed tea, water dispensers, coffee and tea brewers, specialty coffee, liquid coffee or tea concentrate, single cup coffee, cold brewed coffee, iced blend coffee or tea beverages, blended teas, hot tea, sparkling tea, coffee or tea extract solutions, filtration equipment, hot chocolate, soups, malt drinks, creamers/whiteners, cereals, beverage concentrates, and mineral water.
Cott is currently a Zacks Rank #5 (Strong Sell). The reason for the unfavorable ranks lies in the recent earnings estimate revisions to the downside. Over the last thirty days, analysts have cut their estimates for the current quarter, next quarter and next year. The negative revisions have dropped the Zacks Consensus Estimate for next quarter from a 2-cent gain to a 5-cent loss. Next year’s number has dropped from 40 cents to 35.
While there is still some growth in EPS estimates for next year, the estimates have come down considerably from their highs. Looking at the Price, Consensus, and EPS Surprise Chart for Cott, you can see that the company has had a tough time delivering real earnings growth year in and year out.
3 Tech Stocks for Dividend Investors to Buy Now
Tech stocks have been unpredictable at times recently, and though the sector has proven it can rebound from volatility strongly, it is likely that tech-minded investors are joining the risk-averse masses and searching for stability in their picks.
This means now might be the time for techies to take a page out of the income investing book, which would tell us to focus on companies with solid dividends.
Finding a strong dividend-yielding tech stock might feel like searching for a golden goose, but investors should not feel too intimidated. In fact, dividend-focused investors can search for the best tech stocks by using the Zacks Stock Screener, the perfect one-stop screening tool for investors of all kinds.
By limiting our search to companies in our “Computer and Technology” sector with Zacks Rank #2 (Buy) or better rankings, we can ensure that we are finding the highest quality stocks to buy right now. Throw in your preferred dividend yield and voila—the best tech stocks for dividend investors to target!
Check out these three stocks to buy now:
1. AVX Corporation
AVX Corporation is a U.S.-based manufacturer of passive electronic components. It primarily makes and sells capacitors and connectors for automotive braking, cell phones, and medical devices. AVX is a member of the Russell 2000 index. Right now, the stock has a #1 (Strong Buy) rating and pays a dividend yield of 2.6%.
Earnings estimates are on the rise for the current fiscal year ending in March, as well as the following fiscal year. AVX also has a solid track record of consistent dividends and has raised the payout a few times in recent years. In addition to its strong Zacks Rank, AVX has an “A” grade in the Value category of our Style Scores system. It trades at under 12x earnings, which is a noticeable discount to its industry’s average.
2. Verizon Communications Inc.
Many investors don’t lump telecoms into the technology basket, but industry behemoth Verizon can certainly make a case for inclusion given its innovation in 5G networking and investment in digital media content. What’s more, Verizon has a #2 (Buy) rating and presents a dividend yield of 4.3%. Verizon has also added to its quarterly payouts in every year that our data has records of.
As many as eight analysts have revised their Verizon 2019 EPS estimates higher within the past 30 days. The stock also held up well during the market’s volatile stretch. It’s up about 8% over the past six months. Still, the valuation is in check. Shares are trading at just 12x earnings, which is reasonable considering where its rivals fall. Meanwhile, Verizon has an expected long-term EPS growth rate of 4.1%.
3. Advantest Corp.
Advantest is one of the world’s leading test equipment suppliers to the semiconductor industry. It hasn’t been the best stretch for most stocks involved in the chip business, but ATEYY is looking like a unique case. While many chip and chip equipment stocks are guiding lower and seeing downward estimate revisions, ATEYY is actually witnessing positive revisions to its EPS estimates.
Advantest has a Zacks Rank #1 (Strong Buy). The company pays out its dividend on a semi-annual basis. For the current fiscal year ending in March, it expects a year-end payment of approximately $0.23 per share, up about two cents from last year. ATEYY also has a Forward P/E of 9.7, which is a discount to its industry’s average. The stock has earned an “A” grade in our Value category.
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?
Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.
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