For Immediate Release
Chicago, IL – March 1, 2019 – Zacks Equity Research Sanderson Farms (SAFM - Free Report) as the Bull of the Day, Hasbro (HAS - Free Report) asthe Bear of the Day. In addition, Zacks Equity Research provides analysis on BlackBerry Limited , Twitter, Inc. (TWTR - Free Report) and Facebook, Inc. (FB - Free Report) .
Here is a synopsis of all five stocks:
Bull of the Day:
Sanderson Farmsis a Zacks Rank #1 (Strong Buy) and the Bull of the Day. As an Aggressive Growth Stock Strategist here at Zacks, I like names that have a lot of growth potential to them. SAFM looks almost more like a value play, but that if just for the time being.
Sanderson Farms, Inc. is engaged in the production, processing, marketing and distribution of fresh, frozen and minimally prepared chicken. As a company, Sanderson Farms is committed to adopting a fresh approach in everything that it does. Not only where products are concerned, but company-wide as well. Though the company has grown in size, it still adheres to the same hometown values of honesty, integrity and innovation that were established when the Sanderson family founded the company as a small feed, seed and farm supply business.
This is not what I expected to see from a Zacks Rank #1 (Strong Buy) as the company has missed each of the last four reports. The last two saw negative earnings surprises of 49% and 46%.
I see some crazy moves in estimates which may contribute to the shift in the Zacks Rank. 30 Days ago, the current quarter was looking at a loss of $2.41, but that number was slashed to a loss of $1.82.
The next quarter was looking at a loss of $0.49 but that flipped to a gain of $0.80. That is a huge move higher!
I know I mentioned that value players might like this, but they will hate the earnings multiple. I see a 120x forward earnings multiple and 85x trailing number. The price to book multiple, however, is very reasonable at only 2x. The price to sales of 0.8x is also very low.
Bear of the Day:
Hasbro is a Zacks Rank #5 (Strong Sell) and in this Bear of the Day article we will take a look at why that is the case. The first thing I do when looking at a Bear is to review who they are and what they do.
Hasbro, Inc. is a global play and entertainment company committed to creating the World's Best Play Experiences. From toys and games to television, movies, digital gaming and consumer products, Hasbro offers a variety of ways for audiences to experience its iconic brands, including NERF, MY LITTLE PONY, TRANSFORMERS, PLAY-DOH, MONOPOLY, LITTLEST PET SHOP and MAGIC: THE GATHERING, as well as premier partner brands.
Through Hasbro Studios and its film labels, Allspark Pictures and Allspark Animation, the Company is building its brands globally through great storytelling and content on all screens. Hasbro is committed to making the world a better place for children and their families through corporate social responsibility and philanthropy.
I see a poor earnings history with the company missing the Zacks Consensus Estimate in three of the last four reports. The most recent miss was a 20% negative earnings surprise and before that, there was a 13.8% negative earnings surprise.
This is the main reason a stock falls to the lowest Zacks Rank. I see the current quarter moving from a gain of 18 cents 30 days ago to a loss of two cents. That is a huge shift lower.
The 2019 number has also slid, from $5.14 to $4.49.
When estimates fall, the Zacks Rank tends to follow.
BlackBerry Charges Twitter with Patent Infringement
BlackBerry Limitedhas reportedly filed a fresh lawsuit for alleged patent infringement. The latest litigation process involves Twitter, Inc. and follows similar such cases against Facebook, Inc. and others.
The suit filed in the U.S. District Court in Los Angeles alleges that Twitter has violated six BlackBerry patents, including pioneering features like push notifications, mobile advertising techniques and the capability to silence notifications for a message thread. The Canadian technology firm has further accused Twitter of unlawfully utilizing some of the "functionality enhancing features" that made "BlackBerry's products such a critical and commercial success" to siphon off its customers.
In March 2018, BlackBerry had filed a patent infringement case against Facebook, alleging violations related to certain messaging features, including unread message notifications and messaging in games. It also accused Facebook of breaching its patents pertaining to security, user interface features, battery-efficient status updates, timestamps and the act of tagging family and friends in photographs. This was followed by a similar lawsuit against Snap in the very next month.
Both these cases are still pending in the court as U.S. District Judge George Wu allowed BlackBerry to pursue most of its infringement claims. It remains to be seen whether the case against Twitter is forwarded to the same judge as all the lawsuits are related to each other. Although the company spokesperson has refused to comment on this issue, experts widely believe that legal compensation and monetary damages are likely to be awarded if the charges are found to be true.
Incidentally, the stock has underperformed the industry with an average decline of 28.7% in the past year while the latter fell 6.7%.
BlackBerry exited its smartphone business in 2016, and has since focused mostly on software to manage mobile devices and enterprise mobility management. The company delivers one of the most secure end-to-end mobile enterprise solutions in the market through a broad portfolio of products and services. It offers an end-to-end software and services platform for the Enterprise of Things, which includes computers, vehicles, sensors, equipment and other connected endpoints within the enterprise that communicate with each other to enable smart business processes.
In addition, the company leverages its extensive technology portfolio to extend the best-in-class security and reliability features. These include a unified endpoint management solution that provides comprehensive multiplatform device, application and content management with integrated security and connectivity, embedded systems, enterprise applications and related services. With the rapid growth of connected endpoints, often referred to as Internet of Things, security has become increasingly important to thwart data theft. BlackBerry has created a niche for itself in this domain and seeks to strengthen its position with innovative safety features.
BlackBerry currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks' Top 10 Stocks for 2019
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