For Immediate Release
Chicago, IL – December 14, 2009 – Zacks Equity Research highlights Tech Data (TECD) as the Bull of the Day and The St. Joe Company (JOE) the Bear of the Day. In addition, Zacks Equity Research provides analysis on AutoNation (AN), Best Buy (BBY) and Home Depot (HD).
Full analysis of all these stocks is available at http://at.zacks.com/?id=5506
Here is a synopsis of all five stocks:
Tech Data (TECD) reported better-than-expected results for the third quarter, beating the Zacks Consensus Estimates. Moreover, the company gave encouraging revenue guidance for the upcoming quarter. We expect revenue to rebound modestly in fiscal 2011.
The company’s balance sheet remains strong. With healthy earnings momentum, continued cost-cutting initiatives, diversified customer base, significant operating leverage, gross margin improvement, strong fundamentals and an improving IT spending environment, we remain positive on the company’s growth prospects.
However, intense competition and weak industry pricing remain concerns. With more positives than negatives, we upgrade the stock to Outperform, and the company’s current premium valuation remains justified. We set a six-month price target of $50.00.
The St. Joe Company (JOE) is one of the largest real estate developers in Florida, which has been hit hard by the downturn in the U.S. housing industry. Large price declines have led to significantly high levels of inventory and operations have deteriorated rapidly.
St. Joe has also recorded huge asset impairment charges related to write-down of assets. The company is currently in a defensive mode and continues to reduce capital expenditures to conserve cash.
Our recommendation for the company is Underperform as we anticipate it to perform well below the broader market. However, if St. Joe can tide over the current storm, the share price can rise.
Latest Posts on the Zacks Analyst Blog:
Retail Sales UP from Last Year
Reports of the death of the consumer have been greatly exaggerated, according to the latest Retail Sales report from the government. Overall retail sales rose by 1.3% in November from October, and are now up for the first time on a year-over-year basis — 1.9% higher than last November.
If we exclude autos, retail sales rose 1.2% from October and are up 1.3% year over year. Ex-autos, retail sales were unchanged in October from September (the numbers are seasonally adjusted) and were down 2.8% from October 2008. Retail sales at car dealers like AutoNation (AN) were up 1.6% from October and are up 5.1% year over year.
The surge in auto sales can no longer be ascribed to the Cash for Clunkers program. It is evidence of real retail demand for the classic big-ticket durable good. The increased willingness to spend on big ticket items is also visible in the pattern of which types of stores are doing well.
Most noticeable of these was a 2.8% monthly gain for electronics and appliance stores like Best Buy (BBY), although sales are still down 3.4% year over year.
Retail sales at hardware stores like Home Depot (HD) gained 1.5% on the month. They still have quite a bit of ground to make up from a year ago, though; on a year-over-year basis, retail sales in that category are down 9.3%. Still that is quite an improvement over the 1.8% monthly decline in October which brought their year-over-year decline in that month to 14.3%.
One glaring exception to the generally stronger tone among the more cyclical of retailers was a 0.7% monthly decline at furniture stores, where retail sales are still down 7.9% from a year ago. Even there, though, the year-over-year declines are moderating.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=5507.
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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