For Immediate Release
Chicago, IL – September 25, 2013 – Zacks Equity Research highlights Alleghany Corporation (Y- Free Report ) as the Bull of the Day and Mitcham Industries ( MIND- Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on the Fomento Economico Mexicano SAB de CV ( FMX- Free Report), Coca-Cola FEMSA S.A.B de C.V. ( KOF- Free Report) and The Coca-Cola Company ( KO- Free Report). Here is a synopsis of all five stocks:
Bull of the Day:
Rising estimates resulting from an excellent quarterly performance have sent this insurer to Zacks #1 (Strong Buy) rank again and it is the ‘Bull of the day’.
About the Company
Alleghany Corporation (Y- Free Report ) is a multi-line insurance company, operating through its subsidiaries, Transatlantic Holdings (reinsurer), RSUI Group (underwriter of property and liability specialty Insurance), Capitol Transamerica Corporation (underwriter of small commercial property, casualty and surety insurance) and Pacific Compensation Corporation (underwriter of workers’ compensation insurance).
The company reported its second-quarter 2013 results on August 5, 2013. Operating net earnings of $6.78 per share were substantially higher than the Zacks Consensus Estimate of $4.25 per share.
The company has delivered a positive surprise in all of the previous four quarters, with an average quarterly surprise of 62.2%.
Better than expected earnings were a result of increase in net investment income (up 10.5% year over year) and lower costs and expenses.
A decline in net loss and loss adjustment expenses, other operating expenses and corporate administration also aided the improvement. Alleghany’s combined ratio for the 2013 second quarter was 92.6%, compared with 83.9% in the 2012 second quarter.
Mitcham Industries ( MIND- Free Report) specializes in leasing and sale of advanced seismic equipment that help oil companies explore for pockets of oil.
The company operates in two segments: equipment leasing and equipment manufacturing. Founded in 1987, the company now has nine locations around the world, providing support and service to geophysical contractors.
Disappointing Second Quarter Results
MIND reported its fiscal 2014 second quarter ended July 31, 2013 financial results on September 4, 2013.
Total revenues for the quarter were $20.9 million down from $23.1 million in the year-ago quarter. The Company reported a net loss of $693,000, or $(0.05) per share, compared to net income of $1.1 million, or $0.08 per diluted share in the comparable quarter of fiscal 2013.
FEMSA Ventures into Restaurant Biz
Moving ahead with its strategy of business expansion, Fomento Economico Mexicano SAB de CV ( FMX- Free Report) or FEMSA’s retail subsidiary – FEMSA Comercio – has agreed to buy a majority stake in the fast-food restaurant chain Dona Tota. FEMSA will acquire 80% stake while the other 20% holdings will remain with Dona Tota’s founding shareholders.
The transaction is still in its early stage and awaits certain customary regulatory approvals. Details about the transaction have not been provided. The Mexico-based restaurant chain operator currently has 204 units across Mexico and 11 units in Texas, U.S.
The co-owner of Coca-Cola FEMSA S.A.B de C.V. ( KOF- Free Report), which is the world’s largest franchise bottler of The Coca-Cola Company ( KO- Free Report) products, is taking prudent steps to diversify its product portfolio while expanding its small-box retail segment, which augurs well for future operating performance.
We observe that FEMSA has been diversifying its retail chain format operations and acquiring businesses across Latin America. In May 2013, the company forayed into the drugstore retail chain business by fully acquiring Mexico-based Farmacias FM Moderna and buying 75% stake in Farmacias YZA. We believe that FEMSA’s venture into the drugstore business strategically fits its store chain business, which will be accretive to its top and bottom lines in the long term.
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