For Immediate Release
Chicago, IL – May 27, 2016 – Zacks Equity Research highlights Silicon Motion Technology (SIMO) as the Bull of the Day and Finish Line (FINL) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Apple Inc (NASDAQ:AAPL). (AAPL), Blackberry (TO:BB) (BBRY) and IBM (NYSE:IBM) ( IBM).
Here is a synopsis of all five stocks:
Silicon Motion Technology (SIMO) recently beat the Zacks Consensus Estimate and will report again in late July. The stock is a Zacks Rank #1 (Strong Buy) and today it is the Bull of the Day.
The Numbers
SIMO beat the Zacks Consensus Estimate of $0.55 by $0.07 for a 12% positive earnings surprise. The topline was equally as strong with the company reporting revenues of $113M and that was $8M more than expected tofr 7.7% positive revenue surprise.
Description
Silicon Motion Technology is a fabless semiconductor company. Silicon Motion Technology was founded in 1995 and is headquartered in Zhubei City, Taiwan.
Earnings History
Over the last seven quarters that I have data for, I see the company topped the Zacks Consensus Estimate six times. These were not small beats either, going back to March 2015 we saw a 21% positive earnings surprise, then a 22% surprise followed by 20% and 12%.
On the topline there are a few times with stagnant growth but the most recent quarter saw a nice lift in revenues. The company reported a 7% positive revenue surprise in the most recent quarter and that is something aggressive growth investors like to see.
Estimates
We have seen a recent kick lower to $2.26, but that could be a number just coming out of the consensus.
The 2017 Zacks Consensus Estimate also saw a recent dip but that came after a big move up. The Zacks Consensus Estimate moved from $2.34 in March to $2.71 in April. Since then we have seen the number come in by 4 cents.
Valuation
The valuation is a little stiff for SIMO. 18x forward PE is a little more than the 15x industry average. The price to book multiple of 3.6x is well above the industry average of 2.6x. The price to sales multiple data is exactly the same as the book data.
Finish Line (FINL) has missed the Zacks Consensus Estimate in three of the last seven reports, and the misses haven't even been close. Misses of $0.03 and $0.46 translated into a misses of 300% and 1533%. The stock is now a Zacks Rank #5 (Strong Sell) and today it is the Bear of the Day.
The Numbers
FINL beat the Zacks Consensus Estimate of $0.83 by $0.03 for a 4% positive earnings surprise in the most recent quarter. Revenues came in ahead of expectations at $580M for a 1.6% positive revenue surprise.
Description
The Finish Line is a specialty retailer of athletic shoes, apparel, and accessories. The company was founded in 1976 and is based in Indianapolis, Indiana.
Earnings History
Usually when a stock is the Bear of the Day, the earnings history is filled with misses. This is not the case for FINL, as there are only three misses in the last seven quarters.
Estimates
Here is the real reason the stock is a Zacks Rank #5 (Strong Sell) and the Bear of the Day. The Zacks Consensus Estimate has fallen steadily over the last few months. The FY17 estimate stood at $1.91 in December but fell to $1.69 in January and is now down to $1.54 in May.
Next year has seen estimates move from $2.11 in December to $1.74. That sort of move will send the Zacks Rank lower.
Additional content:
Apple (AAPL): Beginning of the End? Of Course Not
What makes being at the top of the market so special? To start with, it's no easy feat to make that ascent in the first place. In that regard, it is reasonable to ascertain that the companies that do make it to the top will not remain there forever. Recently, one of the titans of the tech world, Apple Inc. (AAPL), has been subject to that very same scrutiny -- more so than usual.
Having revolutionized the smartphone industry with status both socially and economically, it's no wonder that Apple generates as much chatter as it does. Recent weeks have seen that chatter become that of anxious investors planning their escape route. However, I would argue that rather than planning on an exit, now is the best time to enter into the tech giant.
With a market cap of $519.57B, Apple is very much a big-cap stock, typically characterized as a low-risk/low-reward investment. Sure, consumer confidence may be decreased now that hedge funds have unloaded more than $7B worth of AAPL stock in Q1, but major investors such as Warren Buffett’s Berkshire Hathaway (NYSE:BRKa) have made news with purchases such as nearly 10m shares (or $1B) as well.
When analyzing Apple’s current downward trend, it is important to note that many factors have been external. U.S. News and World Report notes that luxury sales like those of many other industries, have diminished considerably in China. This is due largely in part to China’s slowed economic growth in recent months as well as a weakening Yuan.
Furthermore, Hong Kong has been negatively affected by its tie to the U.S. dollar, which has recently strengthened, in turn increasing the cost of living for Hong Kong residents and driving down tourism. Jackdaw Research reports that although China has accounted for half or more of Apple’s revenue growth for multiple quarters, it is now part of the cause of Apple’s current shrinkage.
For short-term investors, given its current state, Apple is not an option worth considering. A weakened smartphone and tablet market coupled with the aforementioned macroeconomic atmosphere has lowered Apple’s EPS, however the horizon is bright. Zacks estimates that as soon as the next quarter Apple’s sales will increase by at least $4B.
This past week, CEO Tim Cook visited India and met with Prime Minister Modi, along with other Indian elites. Apple is interested in expanding their operations in the Indian subcontinent, particularly in refurbishing and selling used iPhones. This movement is especially important considering Apple’s status in India as selling more “premium” productions.
In a nation where 70% of smartphones cost less than $150, Cook’s objective is to make the iPhone as accessible as possible. Furthermore, Apple unveiled plans to open a new office in Hyderabad that will “focus on development of Maps for Apple products” according to their official press statement.
The fact of the matter is that Apple currently finds itself at a crossroads -- not unlike Blackberry ( BBRY) in 2007 or IBM (IBM) in the 1990s. The question becomes whether it will handle itself the same way, and succumb to the complacency that usually comes with an extended period of unprecedented success.
For long-term portfolios, buy now while Apple is low, and think forward to the next ten, twenty, and even 30 years. Apple has been chastised for their recent lack of innovation, but it is by no means an old dog without any tricks left to learn. There are plenty of rumors surrounding Apple’s potential business ventures, from the iTV to the Apple Car, which is believed to be their answer to the emerging electric vehicle market.
There is still plenty of upside left to be seen with Apple. Many look back on the early 2000s and regret either not buying in, or selling their shares of Apple too soon. The point that Apple stands at right now is a chance for those people to find redemption.
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 the Analyst Blog
Updated throughout every trading day, the Analyst Blog provides analysis from Zacks Equity Research about the latest news and events impacting stocks and the financial markets.
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.
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Click here to subscribe to this free newsletter today.
About Zacks
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros.
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
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.
SILICON MOTION (SIMO): Free Stock Analysis Report
FINISH LINE-CLA (FINL): Free Stock Analysis Report
APPLE INC (AAPL): Free Stock Analysis Report
BLACKBERRY LTD (BBRY): Free Stock Analysis Report
INTL BUS MACH (IBM): Free Stock Analysis Report
Original post
Zacks Investment Research