For Immediate Release
Chicago, IL – November 19, 2013 – Zacks Equity Research highlights Sierra Bancorp ( BSRR- Free Report ) as the Bull of the Day and General Cable ( BGC- Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on the Jos. A Bank Clothiers Inc. ( JOSB- Free Report), The Men's Wearhouse, Inc. ( MW- Free Report) and DSW Inc. ( DSW- Free Report).
Here is a synopsis of all five stocks:
Bull of the Day:
Sierra Bancorp ( BSRR- Free Report ) is the parent of Bank of the Sierra, which it acquired in August 2001. Bank of the Sierra offers a full range of retail and commercial banking services, primarily in the central and southern sections of the San Joaquin Valley. The company has 25 branch offices and more than 400 employees.
Sierra reported its Q3 2013 results on October 21, 2013. Net income for the quarter came in at $3.4 million, up more than 100% from the prior-year quarter. The increase was primarily the result of a reduction in loan loss provisions, offset partly by a decline in the net interest income. ROA for the quarter increased to 0.97%, from 0.46% in Q3 2012, while ROE also increased to 7.60% from 3.74%.
Earnings per share increased to $0.23 from $0.12 in the prior-year quarter. The ratio of nonperforming assets to total assets improved to 4.76% at September 30, 2013, from 6.01% as of the end of the prior-year quarter.
Bear of the Day:
Disappointing results and downbeat guidance have led to sharp downward estimates revisions, sending this wire and cable products company to a Zacks Rank # 5 (Strong Sell) on November 8, 2013.
Headquartered in Highland Heights, Kentucky, General Cable ( BGC- Free Report) develops, designs, manufactures, markets and distributes copper, aluminum and fiber optic wire and cable products for the energy, industrial, specialty and communications markets around the world.
On November 4, 2013, the company reported its third quarter estimated results and also provides comments on the their fourth quarter outlook
Adjusted earnings for Q3 2013 were $63 million or $0.45 per share, substantially short of the Zacks Consensus Estimate of $0.55 per share. Results were hurt by lower than expected seasonal demand in North America and continued pricing pressure. While the demand for copper-based electrical infrastructure products and specialty cables remained stable, it was more than offset by lower-than-expected aluminum-based Electric Utility product shipments.
For the fourth quarter, the management expects typical seasonal volume declines to be partially offset by project-related activity globally. Operating cash flow is now expected be in the range of $0 to $20 million during 4Q, lower than earlier expected. According to the company, the revised guidance reflects the impact of lower cash earnings as well as lower reduction in inventory primarily in North America and Latin America.
Jos. A. Bank Abandons Takeover Bid
Men's specialty retailer, Jos. A Bank Clothiers Inc. ( JOSB- Free Report) has abandoned the acquisition bid for The Men's Wearhouse, Inc. ( MW- Free Report). The proposal lapsed as Men’s Wearhouse failed to engage in favorable negotiations with Jos. A Bank before the Nov 14 deadline.
Jos. A Bank had privately communicated an offer to acquire all outstanding shares of Men’s Wearhouse for $48 per share in cash (the deal was valued at over 40% premium at the time of proposal) in Sep 2013. However, Men’s Wearhouse considered the move as “opportunistic” and “inadequate”, and consequently rejected the bid.
Thereafter, Jos. A Bank sought to negotiate the purchasing price, provided it would have been allowed to carry out “due diligence”.
Though Men’s Wearhouse has not shown much interest in the deal, Jos. A Bank continues to believe that the possible merger has benefits for both the companies. Further, the company declared that it is open to discussions if Men’s Wearhouse changes its stance. This keeps the possibility of reviving the annulled transaction in the future.
Eminence Capital, LLC, the largest shareholder with 9.8% stake in Men’s Wearhouse is greatly upset at the cessation of the takeover bid. Consequently, it has called for a shareholders’ meet to discuss incumbent corporate governance changes.
The failure of the deal, however, is of little surprise to us given Men’s Wearhouse’s earlier reactions. Following the bid rejection, the company had adopted a poison pill (the Rights Plan) to protect itself against hostile or any other takeover tactics. The company revealed that its limited period shareholder rights plan, which expires on Sep 30, 2014, will prevent any single owner to own more than 10% stake (15% for a passive institutional investor) in the company.
Men’s Wearhouse and Jos. A. Bank carry a Zacks Rank #3 (Hold). Better performing stocks among apparel-shoe retailers include DSW Inc. ( DSW- Free Report), with a Zacks Rank #2 (Buy).
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