For Immediate Release
Chicago, IL – May 3, 2010 – Zacks Equity Research highlights Fastenal Co. (FAST) as the Bull of the Day and Diageo Plc (DEO) the Bear of the Day. In addition, Zacks Equity Research provides analysis on D.R. Horton, Inc. (DHI), BP (BP) and Transocean (RIG).
Full analysis of all these stocks is available at http://at.zacks.com/?id=5506
Here is a synopsis of all five stocks:
Fastenal Co. (FAST) is a leading distributor of industrial and construction supplies and fasteners. Its manufacturing business has been improving sequentially every month since May 2009 amid the economic downturn.
The company has a strong cash flow, which supports an incremental dividend policy and share repurchase program. Fastenal outperformed the Zacks Consensus Estimate in the first quarter of 2010.
These factors have led us to upgrade the recommendation from Neutral to Outperform and set a target price of $67.
We are downgrading our recommendation on Diageo Plc (DEO) to Underperform from Neutral as we anticipate it to perform well below the broader market. The global economic downturn has negatively impacted demand for Diageo’s premium offerings thereby affecting both top- and bottom-line performance.
Moreover, the company is facing intense competition from other well-established players, which are aggressively expanding presence through mergers and acquisitions.
Furthermore, exposure to seasonal fluctuations and adverse foreign currency translations also undermine the company’s future growth prospects and profitability.
Latest Posts on the Zacks Analyst Blog:
D.R. Horton Outpaces Estimates
D.R. Horton, Inc. (DHI) posted a profit of $11.4 million or 4 cents per share in the second quarter of fiscal year 2010, compared to a loss of $108.6 million or 34 cents per share in the same quarter of fiscal year 2009. With this, the company has beaten the Zacks Consensus Estimate of a loss of 3 cents per share.
Homebuilding revenue in the quarter rose 16% to $896.8 million. Homes closed grew 19% to 4,260 homes from 3,585 homes in the same quarter of fiscal year 2009.
A spike in demand due to the spring selling season helped the company improve its profits. It has also helped raising net sales orders by a staggering 55% to 6,438 homes (valued at $1.3 billion) from 4,160 homes (valued at $844.5 million) in the second quarter of fiscal year 2009.
International Trade Continues to Drag
While the impact from increased imports was down from a 2.09 point reduction in the 4Q and a 2.59 point drag in the 3Q, Imports more than offset Exports. Net exports were a 0.61 point drag on GDP in the 1Q rather than the 0.27 contribution in the 4Q, but better than the 0.81 point drag in the 2Q.
The price of oil is really a key variable in the net export situation, as petroleum makes up about half of our trade deficit. Increasing domestic production of oil might help, but that is not going to be easy to do since we have already depleted most of our on-shore reserves, and the Deepwater Horizon disaster reminds us that it is not all that easy to increase our production offshore.
A major part of the solution would be use more natural gas which is very abundant on shore as well as offshore — and if BP (BP) and Transocean (RIG) had been drilling for gas instead of oil when the disaster occurred, there would be no oil slick, just a lot of bubbles rising to the surface.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=5507.
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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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