Yahoo Finance NICE, Forward Air, Ally Financial, Euronet Worldwide and United Insurance highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – December 16, 2016 – Zacks Equity Research highlights NICE Ltd. (NASDAQ: NICE -Free Report ) as the Bull of the Day and Forward Air Corp (NASDAQ: FWRD -Free Report ) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Ally Financial Inc. (NYSE: ALLY -Free Report ), Euronet Worldwide, Inc. (NASDAQ:EEFT -Free Report ) and United Insurance Holdings Corp. (NASDAQ:UIHC -Free Report ) .
Here is a synopsis of all five stocks:
Bull of the Day:
NICE Ltd. ( NASDAQ: NICE -Free Report ) is an Israeli company that provides enterprise software solutions that enable organizations to enhance customer experience, drive business performance, ensure compliance, and fight financial crime. Cyber security is a big deal and in the news lately, especially after the big yahoo hack.The stock is the Bull of the Day after it recently became a Zacks Rank #1 (Strong Buy).
NICE has a market cap of $4 Billion with a Forward PE of 21. The stock sports Zacks Style Scores of “C” in Growth, but “D” Value. Valuation is the issue for the company and investors are looking for the company growth potential to send the stock higher. The company sits in an industry ranked 68 out of 265 (Top 26%) of the Zacks Industry Rank. And its Sector Rank is in the top 13%, or 2 out of 16.
Earnings and Guidance
NICE reported Q3 earnings on November 10th, with EPS coming in at $0.83 versus the $0.80 expected. Revenue came in lower than expected, with the company reporting $2.37 million versus the $2.40 million expected. However, raised fiscal year 2016 range to $3.53-3.65 verse the expected $3.54. They also raised Q4 to $1.10-1.22 versus the $1.13 and sees revenues significantly higher than expected.
Investors reacted positively, sending the stock close to $70 before it pulled back to the 50-day moving average. After bouncing off that support, it looks like a breakout over $70 will come soon. Shortly after earnings, JP Morgan reiterated its overweight rating and $74 targets.
Bear of the Day :
Forward Air Corp ( NASDAQ: FWRD -Free Report ) is a high-service level truckload carrier and contractor to the air cargo industry. The company provides scheduled trucking services to air freight forwarders, fully integrated air cargo carriers and domestic and international airlines through its Forward Air operations. The stock is the Bear of the Day after it recently became a Zacks Rank #5 (Strong Sell).
Forward has a market cap of $1.5 billion with a forward PE of 23. The company is based in Greenville, Tennessee and has over 3400 employees. The stock sports a Zacks Style Score of “A” in Growth, but “C” in Value.
The value score is an issue for some investors, especially after the stock has run up 20% since the election. It doesn’t help that the company sits in an industry ranked 239 out of 265 (Bottom 10%) of the Zacks Industry Rank.
Q3 Earnings
Earnings weren’t terrible when the company reported on October 20th. However, the guidance for Q4 was light as the company guided Q4 $0.53-0.57 versus the $0.63 expected.
CEO Bruce Campbell had some comments on the quarter and the “sluggish environment:
“Our third quarter results were in line with our revised guidance and reflected the impact of a sluggish economic environment. The Expedited LTL team did a good job managing costs and preserving margin despite soft volumes, which improved towards the end of the quarter. Expedited Truckload Services continued to grow its revenue, but it faced margin pressure due to loose truckload capacity. Our Intermodal group delivered solid revenue and operating income in a very challenging import market, while our Pool Distribution segment posted a slight revenue gain as it ramped up its recent new business wins.”
The stock saw little reaction, but the weeks that followed since the election cause a surge in shares. Investors should consider getting out now, before next quarter is reported. Revision are falling, which generally doesn’t bode well for the next EPS report.
Additional content:
3 Financial Stocks to Avoid Despite Fed Rate Hike
Meeting market expectations, the Federal Reserve increased its benchmark interest rate yesterday, acknowledging continued improvement in the U.S. labor market and expanding economic activity. The Federal Open Market Committee raised the target range for the federal funds rate by 25 basis points to 0.50-0.75% from 0.25-0.50%.
Further, signaling confidence in the U.S. economy, the Fed expects three rate hikes in 2017 instead of the previous forecast of two.
While the rate hike is largely seen as a dampener for sectors such as utility and telecommunications because of the resultant increase in their borrowing costs, the major gainer, as usual, is the finance sector. This is because all industries, except REITs, within this sector tend to benefit from rising rates.
Hence, when it comes to picking stocks in a rate hike scenario, finance stocks are essentially seen as attractive bets. However, not all stocks within the finance industries that are likely to benefit from the rate hike can help you ride the wave. In fact, staying away from some finance stocks, even after the rate hike, could be a wise decision.
Stocks to Avoid
While it’s not easy to select such stocks from the vast finance sector, we have made this task relatively simpler with the help of Zacks Stock Screener.
We have shortlisted five stocks with a market capitalization of at least $500 million and a Momentum Score of ‘F.’ Further, these stocks carry a Zacks Rank #4 (Sell) or #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here .
Ally Financial Inc. (NYSE:ALLY -Free Report ) : This Detroit, MI-based company is a part of the Zacks categorized Consumer Loans industry. It offers a broad array of financial products and services, primarily to automotive dealers and their customers in the U.S. The company has forayed into the mortgage business, made efforts to improve its digital offerings and launch new products to enhance profitability.
However, the company’s high debt level remains a concern. Also, the near-term guidance is not too impressive. Management expects net interest margin to decline in the fourth quarter of 2016 due to seasonality, though the same is expected to bounce back in the first half of 2017. Lease revenues are projected to decline due to management’s expectation of a 5% decrease in used vehicle prices in 2016 and 2017. Further, in the retail auto portfolio, it expects to witness higher losses and provisions in 2017.
We see limited upside for the stock in the near term, as it carries a Zacks Rank #4. Over the past 60 days, the Zacks Consensus Estimate for the company has revised 4.9% downward to $2.14 per share for 2016. Further, Ally Financial gained 5.5% year to date, underperforming the 16.8% growth recorded in the Consumer Loans industry.
Euronet Worldwide, Inc. (NASDAQ:EEFT -Free Report ) : Based in Leawood, KS, the company under the Miscellaneous Financial Services industry provides payment and transaction processing solutions to financial institutions, retailers and service providers as well as individual consumers globally. While the company is well positioned to benefit from the growing electronic payment business, geopolitical risks and global growth concerns remain overhangs.
Notably, last month, the company released and updated guidance for fourth quarter 2016 to reflect the impact of continued cash supply shortages in India owing to the country’s demonetization move and strengthening of the U.S. dollar against several currencies of the countries where Euronet operates. It expects these two items to affect fourth quarter adjusted earnings per share by about 7–9 cents and updated its EPS guidance in the range of 98 cents to $1.
Over the past 60 days, this Zacks Rank #4 stock witnessed its current year estimates revising nearly 2% downward to $3.78 per share. Also, year to date, Euronet gained just 1% compared to 3.9% increase in Miscellaneous Financial Services industry.
United Insurance Holdings Corp. ( NASDAQ:UIHC -Free Report ) : The St. Petersburg, FL-based company in the Property & Casualty Insurance industry is engaged in sourcing, writing and servicing residential and commercial property and casualty insurance policies. The company’s third-quarter 2016 earnings decreased 58% year over year to 16 cents. Apart from Hurricane Hermine and the Louisiana storms, the company’s bulk loss ratio deterioration was largely due to increases in fire and hail losses in Florida and the Northeast region. The quarter witnessed higher combined ratio owing to the company’s exposure to catastrophe losses.
Further, the picture for fourth-quarter 2016 is not impressive as well. The company stated that it has received more than 5,000 claims related to Hurricane Matthew and expects to incur $30 million of pre-tax catastrophe losses (net of reinsurance recoveries) during the fourth quarter.
Currently, the company carries a Zacks Rank #4. Over the past 60 days, the Zacks Consensus Estimate for the company declined significantly to 41 cents per share for 2016. Notably, the company lost 11.7% year to date compared to 21.7% gain in the Property & Casualty Insurance industry.
Zacks' Best Investment Ideas for Long-Term Profit
Today you can gain access to long-term trades with double and triple-digit profit potential rarely available to the public. Starting now, you can look inside our stocks under $10, home run and value stock portfolios, plus more. Want a peek at this private information? Click here >>
Get today’s Zacks #1 Stock of the Day with your free subscription to Profit from the Pros newsletter:
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
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 >>.
Get the full Report on NICE - FREE
Get the full Report on FWRD - FREE
Get the full Report on ALLY - FREE
Get the full Report on EEFT - FREE
Get the full Report on UIHC - FREE
Follow us on Twitter: https://twitter.com/zacksresearch
Join us on Facebook: https://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
support@zacks.com
https://www.zacks.com
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer .
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
NICE LTD (NICE): Free Stock Analysis Report
FORWARD AIR CRP (FWRD): Free Stock Analysis Report
ALLY FINANCIAL (ALLY): Free Stock Analysis Report
EURONET WORLDWD (EEFT): Free Stock Analysis Report
UTD INSURANCE (UIHC): Free Stock Analysis Report
To read this article on Zacks.com click here.
