For Immediate Release
Chicago, IL – December 28, 2009 – Zacks Equity Research highlights DeVry (DV) as the Bull of the Day and The Andersons, Inc. (ANDE) the Bear of the Day. In addition, Zacks Equity Research provides analysis on Tata Motors (TTM), Ford Motor (F) and Capital One Financial Corp.(COF).
Full analysis of all these stocks is available at http://at.zacks.com/?id=5506
Here is a synopsis of all five stocks:
DeVry (DV) is a leading provider of post secondary education in North America and commands a strong portfolio of well-established brands. Moreover, DeVry is also taking initiatives to diversify revenue streams and optimize its real estate strategy, which augurs well for future operating performance.
The company has a consistent track record of returning cash to shareholders in the form dividends and share buybacks. Our long-term (6-month) recommendation on DeVry is Outperform as we anticipate it to perform well above the broader market.
However, intense competition from public and private colleges and risks associated with seasonality of business may limit the above-market performance of the company.
The Andersons, Inc. (ANDE) reported third-quarter earnings of 7 cents per share, well below the Zacks Consensus Estimate of 39 cents and the prior-year EPS of 70 cents. Apart from the Grain & Ethanol Group, all other segments posted an operating loss for the quarter.
Revenue declined 33.6% to $601.0 million from $905.7 million in the year-ago period, primarily due to lower grain and plant nutrient prices. The current economic slowdown is having an adverse impact on all of the company’s businesses.
We do not expect a significant turnaround in any of these businesses in the near term. We are downgrading our recommendation on the stock to Underperform.
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Tata Motors Hits High for Year
Tata Motors’ (TTM) shares reached year-high level on Dec 23 on the back of optimistic views revealed by the company. The shares rose 43 cents to $16.13 on Dec 23 compared to Dec 22.
Earlier this week, Tata Motors revealed that it expects to expand its market share in utility-vehicle space by 3% with the introduction of its Grande MKII utility vehicle. According to Dow Jones, the MKII could raise Tata’s utility-vehicle sales by about 30%. The company also expects to deliver 100,000 Nano cars, known as the peoples’ car for its affordability, to customers by the end of next year.
In the second quarter of its fiscal ended Sep 30, 2009, Tata Motors returned to profitability helped by aggressive cost reduction measures and recovery of sales for its Jaguar and Land Rover brands in the U.K. The company posted a net income of Rs.217.8 million ($4.7 million) in sharp contrast to a loss of Rs.9.4 billion ($201.7 million) during the second quarter of last year. Sales volume (including exports) for the quarter grew 17.4% to 158,575 vehicles.
Jaguar and Land Rover – acquired by Tata from Ford Motor (F) last year – went through massive restructuring programs after its acquisition. Last year, the company had cut about 2,500 jobs in the division. It has also frozen pay and canceled bonuses.
These have led Jaguar and Land Rover to post an operating profit of £41.29 million ($68 million) supported by a 23% growth of wholesale volumes over the previous quarter and aggressive cost reduction efforts.
Capital One Upgraded
We are upgrading our recommendation on Capital One Financial Corp.(COF) to Outperform. The company’s third quarter earnings were substantially ahead of the Zacks Consensus Estimate, driven primarily by higher-than-expected revenue and almost stable expenses. However, an increase in provisions and a decrease in average deposits were on the downsides.
We think that the full repayment of the bailout money and the warrants sell-off by the Treasury department will help Capital One get back investors’ confidence. Also, the company is now free from government interventions and pay restrictions on its key executives. Restrictions on pay rules as a result of absorbing government money were a major competitive disadvantage for the company in retaining talented employees.
As part of its transformation to banking, Capital One acquired Chevy Chase Bank in February 2009. Chevy Chase’s large retail presence in the Washington D.C. region will further expand Capital One’s operational reach in these lucrative markets. This acquisition will support its earnings growth going forward.
Disciplined expense management is another major strength of Capital One. The expense management initiatives have significantly helped the company in offsetting rising credit losses and driving shareholder value in the recent years.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=5507.
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