For Immediate Release
Chicago, IL – Dec 22, 2017 – Zacks Equity Research highlights HollyFrontier (NYSE:HFC) as the Bull of the Day and Bojangles (NASDAQ:BOJA) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on the Nike, Inc. (NYSE:NKE) .
Here is a synopsis of all three stocks:
As the market cheers the tax reform on Capitol Hill, there will be big winners and bigger winners. You’ll have to forgive my over-the-top enthusiasm here but I can’t emphasize the benefits for small caps enough. By some estimates, we’re talking about over 40% earnings growth next year. In a market fueled by earnings, that should be music to investors’ ears.
Perhaps the largest beneficiary will be small cap energy stocks. So it should come as no surprise that today’s I’ve named my Bull of the Day in this industry. I’m talking about HollyFrontier. HollyFrontier Corporation is engaged in refining petroleum. It produces and markets gasoline, diesel, jet fuel, asphalt, heavy products and specialty lubricant products. HollyFrontier Corporation, formerly known as Holly Corporation, is headquartered in Dallas, Texas.
HollyFrontier is a Zacks Rank #1 (Strong Buy) in an industry that currently ranks in the Top 19% of our Zacks Industry Rank. The reason for the favorable rank is the recent influx of earnings estimate revisions to the upside. Over the last thirty days, five analysts have come out and increased their earnings estimates for next year, while six analysts have done so for the current year. The bullish attitude has helped push the Zacks Consensus Estimate for the current year from $1.48 to $2.38 while next year’s number has ballooned from $2.09 to $2.88.
It’s no wonder why investors have been handsomely rewarded in this name. The huge earnings momentum has carried over to big moves in the stock. After a spike took shares up over $30 in August, the stock retraced to its 50-day moving average. From that support, the real action began. Since then, huge momentum to the upside, with virtually no retracement has taken the stock up over $50. With earnings estimates helping to fuel the fire, this could just be the first stop along the way.
There is such a huge opportunity in the market right now. With this tax reform bill comes earnings estimate revisions to the upside. Across the board stocks are receiving a big boost. Think about what another 10% or 20% upside in earnings will do to your favorite stock, favorite industry, favorite sector. With all this good news, investors need to develop a very antsy approach. What I mean by that is, you have to think, “What have you done for me lately?” when looking at your holdings. If they are stale, your opportunity cost is just too great.
Today’s Bear of the Day is one of those stale names that just hasn’t gone anywhere but down. I’m talking about Zacks Rank #5 (Strong Sell) Bojangles.For those unfamiliar with the name, Bojangles develops, operates, and franchises limited service restaurants in the United States. Its restaurants offer never-frozen bone-in fried chicken items, made-from-scratch buttermilk biscuits, fixin’s, and iced tea. As of June 25, 2017, the company had 740 system-wide restaurants, including 314 company-operated and 426 franchised restaurants located primarily in the Southeastern United States.
The reason for the rough Zacks Rank is the series of bearish earnings estimate revisions the company has seen recently. Seven analysts have come out and dropped their estimates for the current year while eight have done so for the next year. The downward moves have dropped the current year Zacks Consensus Estimates from 82 cents to 79 cents for the current year. Next year’s number has gone from 86 cents all the way down to 7 cents.
The bearishness doesn’t just rear its ugly head in the estimates. Looking at the stock chart since late Spring it’s just as bad. After trading above $22 in early May, shares have tumbled, getting all the way down to $12. There’s a ton of negative momentum here as the stock is searching for support. The commodity channel index recently gave a “Sell” signal after crossing down below the zero line.
Additional Content:
Nike (NKE) Posts Earnings Beat Praises Direct-to-Consumer Efforts
Nike, Inc. just released its second-quarter fiscal 2018 financial results, posting earnings of 46 cents per share and revenues of $8.55 billion.
Currently, NKE is a Zacks Rank #3 (Hold) and is relatively flat in after-hours trading shortly after its earnings report was released. Shares of Nike closed about 1.8% higher on Thursday.
Nike:
Beat earnings estimates. The company posted earnings of $0.46 per share, beating the Zacks Consensus Estimate of $0.39.
Beat revenue estimates. The company saw revenue figures of $8.55 billion, beating our consensus estimate of $8.39 billion.
Total revenues were up about 5% on a year-over-year basis. Revenues from the Nike brand were up 4% to $8.1 billion, while revenues for Converse were down 4% to $408 million.
Earnings were down about 8% from the year-ago period. Nike cited a decline in gross margin and higher selling and administrative expense as reasons for the earnings slump.
“This quarter, led by our Consumer Direct Offense, we accelerated international growth and built underlying momentum in our domestic business,” said CEO Mark Parker. “For the back half of the fiscal year, NIKE’s innovation line-up is as strong as it’s ever been and we’ll continue to actively shape retail through new differentiated experiences.”
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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.
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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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HollyFrontier Corporation (HFC): Free Stock Analysis Report
Bojangles', Inc. (BOJA): Free Stock Analysis Report
Nike, Inc. (NKE): Free Stock Analysis Report
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