Logitech International, Mattel, General Motors, Ford Motor and Fiat Chrysler Auto highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – February 02, 2017 –Zacks Equity Research highlights Logitech International (NASDAQ: LOGI – Free Report ) as the Bull of the Day and Mattel Inc. (NASDAQ: MAT – Free Report ) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on General Motors Company (NYSE: GM – Free Report ), Ford Motor Company (NYSE: F – Free Report ) and Fiat Chrysler Auto (NYSE: FCAU – Free Report ).
Here is a synopsis of all five stocks:
Bull of the Day :
The tech sector is significantly impacted by corporate spending cycles. Dependent on the company’s current and near term outlook, management will decide either to purchase new tech items, or wait another quarter or even a year to make the purchases. Yet one tech company has been able to buck these cycles and post double digit gains in almost every product they sell during a challenging consumer spending environment. That company isLogitech International (NASDAQ: LOGI – Free Report ), and they are our Zacks Bull of the Day.
This Zacks Rank #1 (Strong Buy) company designs, manufactures and markets innovative peripherals that provide people with easy access to the digital world. The Company's product family includes Internet video cameras, mice and trackballs, keyboards, audio and telephony products, interactive gaming devices and 3D controllers.
Recent Earnings Results
Last week Logitech posted Q3 17 earnings results where they easily beat bot the Zacks consensus earnings and revenue estimates. On a year over year basis, the company saw gains in retail sales +12%, total revenues +7%, GAAP operating income +41%, non-GAAP operating income +34%, and cash flows from operations rose by 55%. Further, the company saw their mobile speakers, PC gaming, and video collaboration segments grow by more than +20%. Lastly, from an international perspective, revenues improved by +18% in Europe, +7% in the Americas, and +14% in Asia Pacific.
Management’s Take
According to Bracken Darrell, President and CEO, “ This Q3, our results exceeded expectations and were outstanding, with broad-based growth across all our regions and almost all product categories. We delivered both the highest retail revenue and the highest non-GAAP gross margin in Logitech’s 35-year history. Our strategy is working, and we are just at the beginning of our path to deliver what we’re capable of. We have significantly raised our outlook on the back of this performance .”
Bear of the Day :
Cyclical companies look to one specific month or at times one quarter to make the majority of their sales for the entire year. While this can be nerve wracking for management, these time periods tend to see huge volumes, and can be extremely profitable for the company. But when merchants slow their buying trends, the company’s input costs increase, and customers reduce their buying activity, margins and revenues get crushed. This is what happened to Mattel Inc. (NASDAQ: MAT – Free Report ), our Zacks Bear of the Day.
This Zacks Ranked #5 (Strong Sell) company designs, manufactures, and markets a broad variety of family products on a worldwide basis through both sales to retailers and direct to consumers. Mattel's business is dependent in great part on its ability each year to redesign, restyle and extend existing core products and product lines, to design and develop innovative new products and product lines, and successfully market those products and product lines.
Recent Earnings Results
On January 25th the company posted Q4 16 earnings results where missed both the Zacks consensus earnings and revenue expectations. The company saw year over year declines in several key areas; worldwide net sales -4%, worldwide gross sales -3%, reported operating income -4%, reported EPS -14.8%, net cash flows from operating activities -19.7%, and gross margins fell by 240 basis points. On a regional view, the company saw year over year declines; net sales North America -2%, net sales International -8%, and gross sales North America -1%, gross sales International -6%.
Management’s Take
According to Christopher Sinclair, Chairman and CEO, “ Our results were negatively impacted by a number of industry-wide challenges, including a significant U.S. toy category slowdown in the holiday period, and increased forex headwinds. And while our sales at retail remained strong, the slowdown triggered elevated retail promotional activity and decreased shipping, all of which had a significant impact on our gross margin ."
Additional content:
What to Expect in 2017 After Poor January Auto Sales Numbers
Unites States’ January auto sales have experienced a 3% decline amid an unusually strong December. December 2016 produced record numbers, with sales increasing to 17.55 million vehicles, taking away a strong start to January 2017. However, it is important to note that, as a rule, January is seen as the weakest month of the year when considering auto sales volume.
General Motors Company (NYSE: GM – Free Report ), Ford Motor Company (NYSE: F – Free Report ) and Fiat Chrysler Auto (NYSE: FCAU – Free Report ) are known as “The Big Three” in the U.S. auto industry. From the three, General Motors sells the most vehicles and they all experienced decreased sales volume last month.
General Motors holds a Zacks Rank #2 (Buy). To begin 2017, the company’s sales fell by 3.8% to 195,909 vehicles sold. Of that, retail sales declined by 4.9%.
Ford, a Zacks Rank #3 (Hold) stock, saw sales decrease by 0.7% to 171,186 vehicles. Retail sales were up by 6%; however, fleet sales were down by 13%.
Fiat Chrysler, which is a Zacks Rank #3 (Hold), experienced a sales decline of 11% to 152,218 light vehicles. For them, fleet sales took a huge hit of 31% as they are attempting to cut back their daily rental segment.
Auto Sales Looking Ahead
Analysts say not to put too much pressure on January auto sales news because this is usually the worst month of the year. Once the weather warms, analysts expect sales to come in at record high levels due to strong consumer confidence.
Additionally, President Donald Trump’s rhetoric on corporate tax cuts and U.S. infrastructure spending looks to increase auto sales for 2017. With projects he is said to implement, a demand for vehicles will increase and sales will better.
Don’t fret with this past month’s sales numbers. Looking ahead, 2017 auto sales are projected to do well with attractive deals on new cars and low gas prices.
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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.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous analyst coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year. See these high-potential stocks free >>.
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Logitech International S.A. (LOGI): Free Stock Analysis Report
Mattel, Inc. (MAT): Free Stock Analysis Report
Ford Motor Company (F): Free Stock Analysis Report
General Motors Company (GM): Free Stock Analysis Report
Fiat Chrysler Automobiles N.V. (FCAU): Free Stock Analysis Report
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