For Immediate Release
Chicago, IL – July 22, 2016 – Zacks Equity Research highlights Sibanye Gold Limited (SBGL) as the Bull of the Day and Hooker Furniture Corporation (HOFT) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Tesla Motors (NASDAQ:TSLA), Inc. (TSLA) and SolarCity Corp. ( SCTY).
Here is a synopsis of all four stocks:
Sibanye Gold Limited (SBGL) has the Midas touch in 2016. This Zacks Rank #1 (Strong Buy) is expected to see huge earnings growth this year as gold prices soar.
Sibanye Gold is one of the largest gold producers in South Africa. It is a mid-cap company with a market cap of $3.8 billion which operates two mines.
Earnings Estimates Soaring
With the price of gold surging this year, the gold miners find themselves in an enviable position of selling their product for a much higher price than previously possible.
The analysts have been raising estimates in the last 30 days.
The Zacks Consensus Estimate for 2016 has jumped to $2.43 from $1.87 over the last month. Sibanye made just $0.23 a share last year so that's a 956% year-over-year increase in earnings.
Estimates for 2017 have also been raised, pushing the Zacks Consensus up to $2.89. That's another 18.9% growth in earnings.
Shares Still Cheap
Even though shares have soared this year to new 2-year highs, there's still value.
Sibanye is trading with a forward P/E of just 6.9.
It also pays a dividend, which is unusual in the gold mining industry. It is currently yielding 1.2%.
The gold miners are in the top 3% of the Zacks Industry Rank because of the strong fundamentals. The Zacks Rank is a short term, 1 to 3 month, recommendation.
The gold miners are perfectly set up this summer to fit right into that short term play as earnings rise.
Hooker Furniture Corporation (HOFT) has seen a slowdown in furniture sales as consumers have stayed on the sidelines. This Zacks Rank #5 (Strong Sell) recently missed on fiscal first quarter earnings.
In business for 91 years, this Virginia-based small cap company makes residential wood, metal and upholstered furniture.
In February 2016, it acquired Home Meridian International which expanded the business. It is now one of the top 3 sources on the US furniture market.
It has manufacturing facilities in Virginia and North Carolina with showrooms in High Point, N. C. and Ho Chi Minh City, Vietnam.
Hooker has 8 distribution centers in North Carolina, Virginia, California and Vietnam.
First Quarter Earnings Miss
On June 7, Hooker reported first quarter results which missed the Zacks Consensus Estimate for the second quarter in a row.
Earnings were $0.36 compared to the Zacks Consensus of $0.46, which was a 21.7% miss.
Excluding the Home Meridian sales, Hooker legacy sales fell 7% due to lower sales in the Hooker Casegoods segment.
The lower sales were reflective of the lower sales across the industry.
But Hooker said that since the end of the first quarter, it has seen improvement in the incoming order rate for both Hooker and Home Meridian casegoods as the consumer has resumed purchasing furniture.
A hot housing market and a record high stock market should also boost sales going forward.
Additional content:
Tesla Aims to Break New Ground with 2nd Master Plan
Tesla Motors, Inc. (TSLA) revealed the much-awaited second master plan that mainly focuses on the company’s ambition to expand its portfolio to cover all major vehicle segments. The automaker will also focus on introducing car sharing and solar energy-based battery systems and developing self-driving capability. With this, Tesla expects to offer a wider range of products and services, and thereby branch out from being just an electric car and battery producer.
Tesla unveiled its first business plan in 2006 when it started selling its first vehicle –Tesla Roadster. This plan outlined Tesla’s intention to use the profits generated from the sale of its initial car models to support the development of cheaper electric family cars.
Tesla’s first car, Tesla Roadster, was an expensive vehicle. The automaker emphasized the need for electric vehicles in order to preserve fossil fuels. The cost was high as the vehicle did not benefit from economies of scale. At present, the company produces the luxury sedan, Model S, and a luxury crossover, Model X. It will start selling the lower-priced Model 3 from next year.
Tesla will be launching two other types of electric vehicles, heavy-duty trucks named Tesla Semi and high passenger-density urban transport. Both these vehicles are in the early stage of development and are expected to be launched next year. The automaker believes that Tesla Semi will reduce cargo transport cost and increase safety. Low-cost vehicle Model 3, future compact SUV and the new pickup truck will help Tesla to address the demands of most of the consumer market.
Tesla considers that advancement of self-driving technology will lead the size of buses to shrink and bring about a change in the role of the bus driver to that of fleet manager. The automaker also plans to add fixed summon buttons for its buses to existing bus stops to help customers who do not have a phone. Moreover, the design will facilitate the use of wheelchairs, strollers and bikes.
The master plan also stresses upon the importance of Tesla’s offer to acquire solar installation firm, SolarCity Corp. ( SCTY) . Per Tesla, the goal of creating an integrated solar-roof-with-battery product cannot be achieved if Tesla and SolarCity remain different companies. Tesla is set to scale Powerwall and SolarCity is ready to provide differentiated solar. Thus, the merger will be beneficial for Tesla.
Tesla also focused on the Autopilot self-driving system. It believes that the system, when fully developed, will be 10 times safer than manual driving. All future vehicles of the automaker will have full self-driving capability. Tesla’s Autopilot is currently in beta stage. The company assured that the system undergoes extensive internal validation before delivery to customers.
Tesla further believes that as the self-driving technology matures, the Tesla vehicles will be having the necessary hardware to support it. The automaker considers that even in situation where the operational capability fails, the vehicle will drive safely due to the system.
Tesla’s master plan also revealed that it is looking forward to entering the ride sharing business. Tesla vehicle owners can join the Tesla share fleet through a mobile application. This will help them to generate an income when they are not using the car. The company also intends to operate its own fleet service, thereby competing with other ride sharing companies including Uber and Lyft.
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SIBANYE GLD-ADR (SBGL): Free Stock Analysis Report
HOOKER FURNITUR (HOFT): Free Stock Analysis Report
TESLA MOTORS (TSLA): Free Stock Analysis Report
SOLARCITY CORP (SCTY): Free Stock Analysis Report
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