For Immediate Release
Chicago, IL – September 5, 2013 – Zacks Equity Research highlights The Dixie Group ( DXYN - Free Report ) as the Bull of the Day and Syneron Medical Ltd ( ELOS - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on the PVR Partners L.P. (PVR- Free Report), Hess Corporation (HES- Free Report) and Oiltanking Partners L.P. (OILT- Free Report).
Here is a synopsis of all five stocks:
Bull of the Day:
After excellent second quarter results, earnings estimates have been rising for The Dixie Group (DXYN-Free Report) sending the stock to Zacks Rank #1 (Strong Buy) with an ‘Outperform’ recommendation.
The Dixie Group is a manufacturer and marketer of carpet and rugs to high-end residential customers through the Fabrica International, Masland Residential and Dixie Home brands. The company began its operations in 1920 and transitioned from textiles to floorcovering in the 1990s.
In 2004, it refined its focus on upper-end markets—both commercial and residential. The company is known for its innovative styling, design and colors.
On July 31, 2013, DXYN reported its second quarter operating results. The quarter resulted in earnings of $0.13 per share, compared with a loss of $0.03 per share for the same quarter of 2012. The results were substantially ahead of the Zacks Conesus Estimate of $0.04 per share.
Dixie had a year-over-year sales improvement of 26% with sales growth in all areas of the business. The management believes that despite potential macro-economic issues, conditions in the upper-end residential portion of the industry will continue to improve during 2013.
Bear of the Day:
Estimates have moved into the negative territory after ugly second quarter results, sending Syneron to a Zacks Rank # 5 (Strong Sell) last month.
Syneron Medical Ltd (ELOS-Free Report) is a leading global aesthetic device company with a 29% worldwide market share. It focuses on non-invasive aesthetic procedures and operates under two segments: Professional Aesthetic Devices and Emerging Business Units.
The Company provides advanced solutions for a broad range of medical-aesthetic applications including body contouring, hair removal, wrinkle reduction, improving the skin's appearance, and the treatment of acne, leg veins and cellulite. The Company sells its products under two distinct brands, Syneron and Candela.
ELOS reported its second quarter FY 2013 results on August 14, 2013. Revenues in Q2 2013 were $68.8 million, up 1% from $68.1 million in the second quarter of 2012. Net operating loss for quarter was $0.01 per share, substantially worse than the Zacks Consensus Estimate of earnings of $0.03 per share.
Gross Margin for the quarter was 48.3%, down from 53.2% in second quarter of 2012. Revenue mix, increased production costs and volume discounts affected the gross margin.
Due to disappointing results and uninspiring guidance, quarterly and annual estimates have been revised sharply downwards in the past few weeks. Zacks consensus estimates for the current quarter and year are now in the negative territory—($0.05) and ($0.19) per share respectively, down substantially from $0.03 and $0.14 per share, 60 days ago.
PVR Partners, Hess Ink Deal
PVR Partners L.P. (PVR- Free Report) continues to strengthen its strategic alliance with Hess Corporation (HES- Free Report). Currently, the partnership has entered into an agreement with Hess Corp. to provide trunkline plus gathering and compression services. This project is expected to be online by the end of 2014. The estimated expenditure for this project will be in the range of $125-$150 million.
Per the agreement, PVR Partners will install a 45-mile natural gas trunkline with a diameter of minimum 20 inch. The partnership will also set up allied gathering pipelines and facilities at Hess Corp.’s lean gas production facility in eastern Ohio’s Utica Shale. The trunkline will carry 450 million cubic feet of lean gas per day. The trunkline will initially connect with the Texas Eastern and Rockies Express interstate pipelines and subsequently connect with other interstate systems.
The new pipelines will cover Belmont, Jefferson and Harrison Counties, where Hess Corp. enjoys a considerable acreage position. Later, PVR Partners will own and operate the natural gas trunkline and related facilities. In addition, the partnership will also build gathering pipelines, compression stations, dehydration facilities and other associated facilities in the Utica Shale.
Initially, PVR Partners will provide services to Hess Corp. Later, the partnership intends to sign more contracts with several producers to provide capacity and gathering services.
In the current contract, PVR Partners will get service charges from Hess Corp. against providing these facilities. The fees will be calculated on the basis of volumes, thus ensuring steady revenue flow to the partnership, without commodity price risks.
Installation of a number of new pipelines will allow PVR Partners to strengthen its presence in the region and serve customers in a better way, which will subsequently increase the number of contract-awards while improving top line, going forward.
PVR Partners currently has a Zacks Rank #3 (Hold). Another stock from the industry presently performing well is Oiltanking Partners L.P. (OILT- Free Report), with a Zacks Rank #1 (Strong Buy).
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