For Immediate Release
Chicago, IL – May 06, 2014– Zacks Equity Research highlights Aspen Insurance Holdings (AHL-Free Report) as the Bull of the Day and Avon Products (AVP-Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Grupo Financiero Galicia S.A. (GGAL-Free Report), Embraer SA (ERJ-Free Report) and Itau Unibanco Holding S.A. (ITUB-Free Report).
Here is a synopsis of all five stocks:
Bull of the Day:
This P&C insurer and reinsurer continues to benefit from its diverse business mix, underwriting expertise and improving industry trends. Rising earnings estimates sent the stock back to a Zacks Rank # 1 (Strong Buy) last month.
Founded in 2002 and based in Hamilton, Bermuda, Aspen Insurance Holdings (AHL-Free Report) is a global insurance and reinsurance company. It operates through wholly-owned subsidiaries and offices in Bermuda, France, Germany, Ireland, Singapore, Switzerland, the United Kingdom and the United States.
AHL had assets of $10.2 billion and over 900 employees at the year ended 31 December 2013. The company/its operating subsidiaries are rated ‘A (Strong)’ by S&P, ‘A (Excellent)’ by AM Best and ‘A2 (Good)’ by Moody’s.
Aspen reported its Q1 results on April 23, 2014. Net operating income for the quarter came in at $1.55 per share, handily beating the Zacks Consensus Estimate of $0.98 per share by 58% and also up 46% from $1.06 per share realized during Q1 2013.
Bear of the Day:
Avon Products (AVP-Free Report) is a leading global beauty company, with nearly about $10 billion in annual revenue. The company is the world's largest direct seller with more than 6 million active independent sales representatives.
Avon products are available in over 100 countries, and the products include color cosmetics, skincare, fragrance, fashion and home products, under brand names like Avon Color, ANEW, Skin-So-Soft and Advance Techniques.
AVP reported Q1 results on May 1, 2014. Total revenues were down 11% to $2.2 billion with Beauty sales down 12% and Fashion & Home sales down 9%. On a constant currency basis, total revenues declined 3% year over year.
The weakness was seen in almost all geographical segments, with revenue down 41% in China, 23% in Russia, 12% in Mexico and 10% in Brazil, partly due to currency headwinds.
Adjusted net income from continuing operations was $52 million, or $0.12 per share, compared with net income of $113 million, or $0.26 per share, for the prior-year quarter. Earnings were substantially short of the Zacks Consensus Estimate of $0.20 per share.
3 Latin American Stocks to Brave Concerns
Both IMF and World Bank are hopeful of situations turning better in 2015. They expect a rebound next year propelled by improved global economy. Weaker Latin American currencies will also boost the exports. Moreover, economic reforms in Brazil and Mexico are expected to attract huge investments.
The Russia-West standoff may trigger more dollar inflows into Latin American markets. However, this will be a short-term phenomenon.
Recently, Chinese Foreign Minister Wang Yi completed a week-long tour to Latin America and offered promise of improved economic and trade cooperation among China and Latin American nations.
China may be looking forward to invest infrastructure projects. In fact, Minister Wang Yi hinted at China’s intention to build a fund that would boost investments in "infrastructure-lacked Latin America."
Venezuela is expected to become biggest oil seller to China. Venezuela President Nicolas Maduro said the nation may export 1 million barrels of oil every day to China. Argentina and China have also agreed to boost their trade cooperation on projects including agriculture, science and technology, infrastructure construction, energy, and finance.
Mexico offers hope in the form of lower-than-expected unemployment numbers in February and controlled inflation rate. Also, the revival in US economy will benefit Mexico significantly as it is an export oriented economy. The US is Mexico’s largest trading partner.
As for Brazil, there may be several negatives in the short term. Nonetheless, Brazil remains an important investment destination. Endowed with large natural resources and a skilled workforce it has the potential to grow its exports significantly. More importantly, Brazilian stocks are still trading at low prices and offer great value to investors.
3 Latin American Stocks to Buy Now
Grupo Financiero Galicia S.A. (GGAL-Free Report) is an Argentina-based financial services holding company. The company provides financial products and services that range from collection and payment services, commercial credit cards to transactions, loans, and investments. It also offers services related to mutual funds and managing foreign currency and government securities positions among others.
GGAL holds a Zacks Rank #1 (Strong Buy) and has expected current quarter earnings growth of 19.79%. The forward price-to-earnings ratios (P/E) for the current financial year (F1) is 6.15. The stock has returned 32.6% year to date.
Embraer SA (ERJ-Free Report) is headquartered in Brazil and it develops and sells jet and turboprop aircrafts. These are sold to Brazil, North America, Latin America, the Asia Pacific, Europe and international defense aviation markets. The company recently reported better-than- expected result boosted by strong defense and executive jet deliveries. Going forward, Embraer expects 2014 revenues to increase slightly from 2013 levels on the back of its Defense & Security and Executive Jets segments.
ERJ holds a Zacks Rank #1 (Strong Buy) and has expected current quarter earnings growth of 10.44%. The forward price-to-earnings ratios (P/E) for the current financial year (F1) is 14.38. The stock has returned 8.5% year to date.
Itau Unibanco Holding S.A. (ITUB-Free Report) is a Brazil-based financial products and services provider. It recently reported improved year-on-year performance, primarily on the back of reduced expenses for provision of loan and lease losses and increased managerial financial margin along with higher banking service fees and income from banking charges. Going forward, it expects 2014 loan loss provision net of recovery to range from R$13 billion ($5.6 billion) – R$15 billion ($6.4 billion). Total credit portfolio is expected to increase in the range of 10% – 13%. Efficiency ratio is expected to improve 50 to 175 basis points.
ITUB holds a Zacks Rank #2 (Buy) and has expected current quarter earnings growth of 34.48%. The forward price-to-earnings ratios (P/E) for the current financial year (F1) is 10.94. The stock has returned 23.9% year to date.
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