For Immediate Release
Chicago, IL – June 13, 2013 – Zacks Equity Research highlights New Oriental Education & Technology Group (EDU--Free Report) as the Bull of the Day and NuStar Energy (NS-Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on the Yum! Brands Inc. (YUM-P-Free Report), McDonald Corp. (MCD--Free Report) and Burger King Worldwide Inc. (BKW--Free Report).
Here is a synopsis of all five stocks:
As a result of an excellent quarterly performance, estimates for this educational service provider have been on the uptrend sending the company to Zacks rank #1 (Strong Buy).
Founded in 1993, New Oriental Education & Technology Group (EDU--Free Report) is the largest provider of private educational services in China with over 15 million student enrollments. Headquartered in Beijing, EDU currently has a network of 57 schools, 733 learning centers, 32 bookstores and over 17,400 teachers in 50 cities. Additionally, it has a large online network with over 8.3 million users.
The company reported its quarter ended February 28, 2013 results on April 24, 2013. Total net revenues increased by 28.6% while the net income increased by 25.0% year-over-year.
Diluted net income came in at $0.18 per ADS, substantially ahead of Zacks consensus estimate of $0.11 per ADS. Further, top-line growth was well above the management guidance range of 22% to 27% growth.
The company expects year-over-year revenue growth to be in the range of 20% to 25% for the quarter ended May 31, 2013.
Disappointing results and downbeat guidance have led to sharp downward estimates revisions, sending this energy stock to a Zacks Rank # 5 (Strong Sell).
Structured as Master Limited Partnership (MLP), NuStar Energy (NS-Free Report) is one of the largest asphalt refiners and marketers and independent terminal and petroleum liquids pipeline operators in the country.
Headquartered in San Antonio, NuStar currently owns 8,491 miles of pipeline, 89 terminal and storage facilities, with operations in the US, Canada, UK, Mexico and the Netherlands.
The partnership has three operating segments, but about 96% of operating income comes from Storage and Pipeline segments
NuStar reported its first quarter 2013 results on April 24, 2013. Net income for the quarter came in at $13.3 million, or $0.17 per unit, compared to $16.0 million, or $0.23 per unit, in the prior-year quarter.
Yum! Comps Dip Yet Again
Comps at YUM! dipped 19% in May 2013 as a result of a 25% fall in comps at its KFC brand. Adverse publicity arising from the outbreak of the H7N9 Avian flu in early-April continues to affect KFC’s performance in the region. However, the rate of decline is moderating, as evident form the fact that the decline in comps in May was much less than the 29% reported for April.
Yum!’s Pizza Hut Casual Dining’s comps were also up 12% in China during the month under review, ahead of the April comps growth of 5%.
Yum! has provided a sales outlook for its China division for the second quarter of 2013 (March, April and May), results of which are expected on Jul 10. According to the company, its China division’s comps will suffer a 20% decline in the second quarter as against a 10% growth in the year-ago quarter. Quarterly decline in comps would be the result of a 26% decline in KFC comps, partially offset by a 7% increase in comps at Pizza Hut Casual Dining.
China, which has played a crucial part in Yum!’s growth story in the past few years, began to witness a setback since the fourth quarter of 2012. An allegation regarding the quality of chicken supplied to KFC in Dec 2012 and the outbreak of avian flu in China in early-Apr 2013 were held primarily responsible for the company’s weak performance in China in the past few quarters.
Currently carrying a Zacks Rank #3 (Hold), Yum! is gradually recovering from the downturn and might record positive same-store sales in the fourth quarter of 2013. The company has issued several aggressive quality assurance programs, marketing campaigns and various promotional offers to boost its sales. However, all of the company’s brand awareness initiatives will likely result in incremental expenses that will weigh on its bottom line.
Another restaurateur, McDonald’s Corp. (MCD--Free Report), also seems to be back on track after posting a dismal performance so far in the year. Comps increased in May as the company witnessed positive comps growth in all the three geographical segments – U.S., Europe, and Asia/Pacific, Middle East and Africa (:APMEA). Menu-innovations, value-options and breakfast offerings did the trick across the globe.
Other players in the restaurant industry, which look attractive at current levels, include Burger King Worldwide Inc. (BKW--Free Report), with a Zacks Rank #2 (Buy).
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