For Immediate Release
Chicago, IL – August 22, 2013 – Zacks Equity Research highlights Pilgrim's Pride (PPC-Free Report) as the Bull of the Day and Liquidity Services (LQDT-Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on the The Blackstone Group L.P. (BX-Free Report), Barclays PLC (BCS-Free Report) and UBS AG (UBS-Free Report).
Here is a synopsis of all five stocks:
I wrote about PPC a little over a month ago as the Bull of the Day. This is a link to that July 12 article. Since PPC was the Bull of the Day back in July, it has appreciated more than 10% and posted some solid earnings.
With a 19% share of the domestic market, Pilgrim's Pride has a firm grip on second place behind Tyson's 22%. The 36 million bird weekly capacity also tells you that plenty of people are eating chicken.
Pilgrim's Pride produces, processes and markets fresh, frozen, and value-added chicken products in the United States, Mexico, and Puerto Rico. The company was founded in 1945 and is headquartered in Greeley, Colorado. As of December 28, 2009, Pilgrim's Pride Corporation operates as a subsidiary of JBS USA Holdings, Inc.
Looking to the earnings history, we see a stock that has beaten the number in three of the last four most recent reports. The most recent quarter was a miss a big beat.
The company reported earnings of $0.74 on July 31 when the Zacks Consensus Estimate stood at $0.56. That translates into a beat of $0.18 or a positive earnings surprise of more than 32%. In the session following the report, the stock increased by 9%.
Liquidity Services (LQDT-Free Report) has seen estimates for 2013 and 2014 continue to fall throughout the year. A recent big move lower has pushed the Zacks Rank to the lowest level. LQDT is a Zacks Rank #5 (Strong Sell). It is the Bear of the Day.
One big reason estimates continue to fall is that the company guided analysts lower following the most recent earnings release. The company told Wall Street they expect earnings per share of between $0.39 and $0.43, but the Wall Street Consensus for the quarter was $0.46.
Liquidity Services operates various online auction marketplaces for surplus, salvage, and scrap assets. The company's auction marketplaces include liquidation.com that enables corporations to sell surplus and salvage consumer goods and capital assets; govliquidation.com, which enables selected federal government agencies to sell surplus and scrap assets; and govdeals.com that enables local and state government entities, including city, county, and state agencies, as well as school boards and public utilities to sell surplus and salvage assets. Liquidity Services was founded in 1999 and is headquartered in Washington, District of Columbia.
LQDT is a prime example of why you cannot put too much faith in a company that is always beating the number. Seems they have topped the Zacks Consensus Estimate in each of the last seven quarters, but did they really? The last three quarters were all beats of a penny, and the most recent beat came after the company lowered guidance in the middle of the quarter.
Things were much better at the end of 2011 and the start of 2012. The company was beating the number soundly, including beats of 39% and 45% for the December 2011 and March 2012 quarters. LQDT was a big winner for subscribers of Home Run Investor, a service that looks for aggressive growth from small cap stocks, during that period of outperformance.
Blackstone Bids to Acquire Tysan
In an effort to expand its operations in China, Blackstone Real Estate Partners Asia fund -- The Blackstone Group L.P.’s (BX-Free Report) real estate arm -- is planning to acquire Hong Kong listed construction company, Tysan Holdings Limited. Blackstone plans to purchase Tysan for about $322.6 million (2.5 billion Hong Kong dollars). Additionally, Barclays PLC (BCS-Free Report) is expected to act as an advisor for Blackstone on the Tysan bid.
Blackstone’s real estate arm was formed in 2013. Following its formation, this would be the first investment by the company’s first Pan-Asia property fund. Moreover, the company is targeting $4 billion worth of investment. Additionally, it plans to focus mainly on Australia as well as Asian countries that include China, India and Japan.
Blackstone has already made investments in the real-estate development business in various cities of China that include Shanghai, Dalian, Nantong and Wuhan.
On the other hand, Tysan Holdings is mainly engaged in the development and investment in residential properties in the cities of Shanghai, Tianjin and Shenyang. Moreover, it has a construction business in Hong Kong along with two service residence projects in Shanghai.
Earlier, between 2010 and 2013, the Chinese government had resorted to stringent rules and regulations in the housing sector. However, due to the fragile growth of the Chinese economy, the real estate sector turned into a profitable investment, thus resulting in relaxation in the real-estate rules by Chinese policy makers. Further, this led to an escalation of property prices in China. These factors made investment in China more lucrative, thereby attracting foreign investments in the real-estate sector.
Recently, UBS AG (UBS-Free Report) announced its plan of entering into an agreement with the district government in Shanghai and an insurance company in order to start a public-housing investment fund. This fund would raise money from both public and private investors in an attempt to assist China to build low-cost houses.
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.
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