Nucor, Avon Products, Digital Ally, Alarm.com Holdings and Ituran Location and Control highlighted as Zacks Bull and Bear of the Day

For Immediate Release

Chicago, IL – April 07, 2017 –Zacks Equity Research highlights Nucor (NYSE: NUE – Free Report ) as the Bull of the Day, Avon Products (NYSE: AVP – Free Report ) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Digital Ally, Inc. (NASDAQ: DGLY – Free Report ), Alarm.com Holdings, Inc. (NASDAQ: ALRM – Free Report ) and Ituran Location and Control Ltd. (NASDAQ: ITRN – Free Report ).

Here is a synopsis of all five stocks:

Bull of the Day :

Headquartered in Charlotte, North Carolina, Nucor (NYSE: NUE – Free Report ) is a leading producer of structural steel, steel bars, steel joists, steel deck and cold finished bars. The company has approximately 200 operating facilities. They are also the largest recycler in the United States.

The company has grown organically as well as through strategic acquisitions over the years. They currently operate in three segments – the Steel Mills segment (78% of total tons sold in 2016), the Steel Products segment (22%) and the Raw Materials segment.

Solid Quarterly Results and Upgraded Guidance

The company swung to profit in Q4, thanks to increased shipments and higher steel prices. During the quarter, earnings were $0.50 per share compared with a loss of $0.59 per share in the same quarter a year ago. Earnings were significantly ahead of the Zacks Consensus Estimate of $0.34 per share.

Sales increased approximately 14% year over year and also beat the Zacks Consensus Estimate.

The steel producer expects Q1 as well as FY 2017 earnings to improve significantly from their 2016 levels.

Returning Cash to Shareholders

The company continues to boost shareholder value through dividends and share buybacks. They have increased their base dividend for 44 consecutive years, irrespective of the commodity cycle. They retuned $4.0 Billion to shareholders during 2004-2008 up-cycle and another $3.8 billion during 2009-2016 down-cycle.

Surging Estimates

Analysts have significantly raised their estimates for the company after strong earnings and upgraded guidance. Zacks Consensus Estimates for the current and next year are now $4.23 per share and $4.44 per share, up from $3.71 and $4.61, before the results.

Bear of the Day :

Headquartered in New York, Avon Products (NYSE: AVP – Free Report ) is the world's largest direct seller with about 6 million active independent sales representatives. Avon products include color cosmetics, skincare, fragrance, fashion and home products, under brand names like Avon Color, ANEW, Skin-So-Soft and Advance Techniques.

In March last year, Avon split into two companies--Avon Products, a publicly traded company that operates in approximately 70 countries and New Avon LLC, a privately-held company owned by Cerberus Capital Management, and operating in the US, Puerto Rico and Canada.

Disappointing Results

The company reported adjusted earnings of $0.01 per share for Q4 missing the Zacks Consensus Estimate of $0.09. Revenues fell 2% year over year and were also short of the Zacks Consensus Estimate.

The miss was attributed to a decrease in the number of selling representatives and currency headwinds.

Update on Transformation Plan

The company also provided an update on the Transformation Plan, which was initiated in January 2016, and aims to achieve its long-term goal of a targeted low double-digit operating margin and mid single-digit constant-dollar revenue growth. The plan focuses on investing in growth, reducing costs and improving financial resilience.

Falling Estimates

Analysts have been slashing their estimates after lackluster results. Zacks Consensus Estimates for the current and nest year have fallen to $0.28 per share and $0.36 per share, down from $0.37 and $0.50, before the results.

The company has missed in three out of last four quarters with an average negative quarterly surprise of about 109%.

The following chart shows the negative earnings and price momentum for AVP:

Additional content:

Who Should Worry About Axon's Body Armor Plans?

In an unprecedented move, Axon Enterprise Inc. announced a program under which it will offer every police officer in the U.S. a one-year free trial of all its existing body camera products, full software suite and training support.

The offering includes Axon Body 2 camera and Evidence.com "Unlimited Pro" license, and docking station to securely upload footage.

The company changed its name from TASER International, Inc. to Axon Enterprise, effective today.

Presently, Axon is the leading dealer of body cameras in the U.S., and is way ahead of smaller competitors like Seattle-based VieVu and Digital Ally, Inc. (NASDAQ:DGLY – Free Report ). With this unconventional move, the company hopes to convert a number of trials into contracts, accelerate the market forward and ramp up revenues.

If the strategy is as successful as the company expects it to be, Axon could quickly crowd out its competitors completely.

Lawsuits are a common nuisance in the law enforcement body camera business and Axon has been involved in a couple of high-profile ones. In 2016, Digital Ally filed a suit against Axon, alleging that the latter’s camera systems for law enforcement infringe on its patented technology.

In an ongoing lawsuit, Digital Ally claims that its patented auto-activation technology, used in body cameras of law enforcement customers has been infringed by Axon. Digital Ally’s revenues have been hurt in the recent fourth quarter and full-year 2016 results, and the company blames Axon’s misleading statements about its patents for the same.

Digital Ally also accused Axon of engaging in improper, unethical and unfair competitive practices. Axon simply called the lawsuit frivolous.

WestPark Capital analyst, Ishfaque Faruk, hypothesized that even if Digital Ally won the patent infringement lawsuit, Axon would either buy the smaller company or license its technology. Most likely, neither outcome would have a significant impact on Axon.

So in any case, we believe that Digital Ally is exposed to substantial risk, particularly if Axon’s strategy succeeds in expanding its market share.

In light of the above risks, we have a Zacks Rank #4 (Sell) for Digital Ally. The company’s shares have had a tough run over the past one year, having declined 5.8% relative to the Zacks classified Protection Safety Equipment and Services industry’s average positive return of 17.1%.

On the other hand, Axon’s shares appreciated 17.7% over the same time, outperforming the industry by a slight margin, as you can see in the chart below. The stock’s performance is in line with that of Alarm.com Holdings, Inc. (NASDAQ:ALRM – Free Report ) and Ituran Location and Control Ltd. (NASDAQ: ITRN – Free Report ), which also surpassed the industry mark. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here .

Analysts also seem to have turned bullish on Axon in recent times, as the Zacks Rank #3 (Hold) company’s earnings estimates moved north over the past couple of months. The Zacks Consensus Estimate for 2017 increased 5.3% to 40 cents in the last 60 days.

Conversely, Digital Ally seemingly holds no favor with analysts lately, as the company’s loss estimates widened substantially over the past month, which makes its outlook even bleaker. With one downward revision compared with none upward in the past 30 days, the Zacks Consensus Estimate for 2017 widened from a loss of 29 cents a month ago to a loss of 80 cents today.

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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.

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Nucor Corporation (NUE): Free Stock Analysis Report
 
Avon Products, Inc. (AVP): Free Stock Analysis Report
 
Digital Ally, Inc. (DGLY): Free Stock Analysis Report
 
Alarm.com Holdings, Inc. (ALRM): Free Stock Analysis Report
 
Ituran Location and Control Ltd. (ITRN): Free Stock Analysis Report
 
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