Lannett, Fossil Group, Tesla Motors, General Motors and Ford Motor highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – January 08, 2016– Zacks Equity Research highlights Lannett Company, Inc. ( LCI ) as the Bull of the Day and Fossil Group, Inc. ( FOSL ) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Tesla Motors, Inc. ( TSLA ), General Motors ( GM ) and Ford Motor Co. ( F ).
Here is a synopsis of all five stocks:
Bull of the Day:
Lannett Company, Inc. ( LCI ) just completed a key acquisition that should boost growth for several years to come. This Zacks Rank #1 (Strong Buy) is forecast to grow earnings by the double digits in fiscal 2017.
Lannett, with a $1.3 billion market cap, makes thyroid, cardiovascular and pain management generic drugs.
Closes on Kremers Urban Pharmaceuticals Deal
On Nov 27, Lannett completed its acquisition of Kremers Urban Pharmaceuticals Inc. for $1.23 billion.
This is a game changing acquisition for the company as it basically boosts its market cap by 50% in a single deal. It also diversifies its product line.
Kremers drugs treat a bunch of different conditions including ADHD, gastroesophageal reflux disease, hypertension and respiratory disease. This will give Lannett a whole new template from which to operate.
On Dec 21, Lannett said that it expects to see cost savings of $40 million in just the first 12 months with more to come in the following years.
There was one snafu in the purchase however as Lannett disclosed that a key customer of KU recently stopped purchasing certain product lines to the tune of about $87 million in revenue.
However, after discussions with other customers, Lannett was able to recover a portion of the revenue.
Analysts Still Bullish on Fiscal 2017
Analysts still really like the deal.
The Zacks Consensus Estimate has risen to $4.82 from $4.65 in the last 30 days. That is earnings growth of 21.4% versus fiscal 2016 earnings forecast of $3.97.
It also has a solid earnings surprise track record. It has beaten the Zacks Consensus every quarter since 2012.
Value and Growth
Shares have fallen from their 2015 highs and are now dirt cheap.
https://staticx-tuner.zacks.com/images/blogs/05/1452205426_scaled_624.jpg Lannett has a forward P/E of just 9.6.
But you also get double digit earnings growth. That gives Lannett a PEG ratio of just 0.6. A PEG under 1.0 usually indicates a company is undervalued.
Lannett is a rare value stock that also has strong growth. That ' s a rare combination.
For investors looking for a mid-cap drug company that is expanding, Lannett is one to keep on your short list.
Bear of the Day :
Fossil Group, Inc. ( FOSL ) has struggled as consumers have turned away from traditional watches towards wearables. This Zacks Rank #5 (Strong Sell) is expected to see sliding earnings in both 2015 and 2016.
Fossil makes watches and fashion accessories, including jewelry and handbags, under its own brand as well as licensed brands.
Its products are sold to department stores, specialty retail stores and watch and jewelry stores in the US and 150 other countries worldwide.
It also sells in over 600 company-owned retail stores and through its own website, fossil.com.
Push Into the Wearables Market
With traditional watch sales falling, Fossil has been quickly trying to expand into the hot wearables market.
On Dec 29, it completed the acquisition of Misfit, Inc. for $236 million. Misfit makes wearable products sold at various retailers.
It already has the cloud and app platforms in place so Fossil can step right into this space with an experienced engineering team in place.
On Jan 5, at the Consumer Electronics Show in Las Vegas, Fossil announced that it would launch more than 100 styles of wearables in 2016 for a variety of its brands.
It expects to launch them under both the Misfit and Fossil brands throughout the year. The wearables will range from activity trackers to smart watches.
Will It Be Enough?
Will the push into wearables boost analyst sentiment?
So far, the answer is "no." 6 estimates for next year have moved lower in just the last 60 days.
Earnings are expected to fall 38.7% this year but there's no recovery forecast for 2016. Earnings are projected to fall another 19% to $3.52 from $4.35 in 2015.
The 2016 estimates have sharply declined in just the last 90 days.
Additional content:
Auto Stock Roundup
Vehicle sales figures for December and full-year 2015 dominated the headlines in the first week of 2016. Propelled by strong December sales at most automakers, U.S. auto sales shot up to an all-time high in 2015.
Meanwhile, Tesla Motors, Inc.’s ( TSLA ) global deliveries for the fourth quarter showed major improvement over the third quarter, helping the electric carmaker to meet its 2015 delivery guidance.
Among other news, General Motors ( GM ) announced a partnership with ride-hailing company Lyft Inc., while Ford Motor Co. ( F ) announced the addition of Apple CarPlay and Android Auto to its SYNC 3 connectivity system.
Recap of the Week’s Most Important Stories
1. U.S. light-vehicle sales increased 5.7% year over year to an all-time high of 17.47 million units in 2015. This is the sixth consecutive year of rising sales. The previous record of 17.40 million units was attained in 2000. The impressive results were driven by low fuel prices, easy availability of credit, high pent-up demand and increasing employment.
Strong sales in December helped push annual sales to the new record. U.S. light-vehicle sales went up 8.9% year over year to 1.64 million units in Dec 2015. General Motors recorded the highest sales volume for the month and the year (read more: U.S. Auto Sales Hit All-Time High in 2015: What About 2016? )
2. General Motors and Lyft Inc. announced that the two are forming a partnership that could increase their chances of being the leaders in self-driving vehicles. General Motors has invested $500 million in Lyft due to which it will gain access to the company’s software, which matches its drivers with riders and automatic payments. It will also become Lyft’s preferred vehicle provider.
Together, the companies also plan to open a network of U.S. hubs where Lyft drivers will be able to use GM vehicles. In the long term, they will work together to develop a group of autonomous vehicles that consumers could call on using Lyft’s mobile app (read more: General Motors Invests $500 Million in Lyft to Form New Partnership ).
3. Ford has decided to add Apple CarPlay and Android Auto to its SYNC 3 connectivity system. This will provide customers the advantage of using the technology they are familiar with, inside their cars. Additionally, Ford is offering the new SYNC Connect technology powered by 4G LTE, which will allow owners to access certain features of their car remotely. Ford is also offering several new AppLink apps to provide a higher level of personalization and customization in vehicles (read more: Ford Adds Apple CarPlay and Android Auto to Sync 3 ).
4. Tesla delivered 17,192 Model S and 208 Model X vehicles in the fourth quarter of 2015. This takes Tesla’s total deliveries in 2015 to nearly 50,580 units, within its projected range of 50,000–52,000 vehicles. The fourth-quarter 2015 Model S deliveries represented an impressive 75% improvement over the fourth quarter of 2014 and a 48% improvement over the third quarter of 2015 (read more: Tesla Reports Q4 Vehicle Deliveries, Meets 2015 Target ).
Want to find the best stocks for 2016? Find out more information about the market-crushing Zacks Top 10 list here >>>
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LANNETT INC (LCI): Free Stock Analysis Report
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TESLA MOTORS (TSLA): Free Stock Analysis Report
GENERAL MOTORS (GM): Free Stock Analysis Report
FORD MOTOR CO (F): Free Stock Analysis Report
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