For Immediate Release
Here is a synopsis of all five stocks:
Bull of the Day:
The airlines are flying high and so are their stocks. Spirit Airlines, Inc. (SAVE-Free Report) recently posted record third quarter results as revenue jumped double digits over a year ago. This Zacks Rank #1 (Strong Buy) is expected to see double digit earnings growth in both 2013 and 2014.
Spirit Airlines operates a low-cost airlines based on ultra-low base fares which allows customers to buy the extras they value. The company has a $9 Fare Club program that costs $59.95 per year but gives customers access to special low fares and deals on baggage fees.
Spirit operates about 250 flights to 50 destinations in the U.S., Caribbean and Latin America. It is one of the few airlines offering service from the United States to the expanding markets of Panama and Colombia.
On Oct 30, Spirit reported its third quarter results and blew by the Zacks Consensus by $0.10. Earnings were $0.79 compared to the Zacks Consensus of $0.69. It was the fourth earnings beat in a row.
Revenue jumped 33.4% to $456.6 million. Total revenue per available seat mile ("RASM") was 12.55 cents, up 8.9% compared to the year ago quarter. The gain was due to higher load factors and higher average passenger yields.
Adjusted pre-tax margin rose to 20.3%, the highest quarterly adjusted pre-tax margin in the company's history.
Spirit is expected to have strong double digit earnings growth of 57% in 2013 and another 20.2% in 2014.
Bear of the Day:
Is it too late to turn around RadioShack (RSH-Free Report)? This Zacks Rank #5 (Strong Sell) recently posted a worse-than-expected quarterly loss but it has a new CEO and is testing new concept stores.
RadioShack operates 4300 stores in the United States and 270 stores in Mexico. It also has about 1,000 dealer and other outlets worldwide.
On July 1, RadioShack opened up the first of its new concept store on Manhattan's Upper West Side which aimed to highlight popular tech devices from Apple, Samsung and the others. These stores have more hands on testing capabilities.
Since the summer, it has opened up numerous new concept stores.
The company is undergoing changes at the hands of new CEO Joseph Magnacca, who came to RadioShack in February 2013 from Walgreens. He instituted a 100 day plan to turn it around.
In the company's third quarter report, RadioShack listed out the five pillars of the company's turnaround:
- reposition the brand;
2. revamp the product assortment;
3. reinvigorate the store experience;
4. operational efficiency; and
5. financial flexibility.
By the end of the year, RadioShack expects to have over 100 concept and brand statement stores in operation. It also intends to re-merchandise inventory in its existing 4,300 stores which it hopes will show improvement in the fourth quarter.
RadioShack is up against the clock.
Big Lots to Shut Wholesale Biz
Big Lots Inc. (BIG-Free Report) announced the decision to shutter its wholesale operations, including Big Lots Wholesale, Consolidated International and Wisconsin Toy wholesale by fiscal 2013 end. During the shutdown, inventories are expected to liquidate and associates will be absorbed by the retail segment in the next 90 days.
Following the announcement, pre-tax charges for the third quarter are estimated to range between $5 and $8 million. Also, post the wind down, the wholesale business financials will be treated as discontinued operations for fiscal 2013.
With the rising competition, sales and growth margins of the wholesale segment have fallen below expectations, leading the company to shift its attention to retailing and seeking other avenues to improve customer relations and generate higher returns for its shareholders.
Although the wind down will be detrimental for many associates involved with the wholesale segment, Big Lots is striving to build and implement new long-range strategies to reach out to its customers. Taking into account its current financial status and future business opportunities, it has already undertaken initiatives. These include enhancing cooler and freezer program, commencing furniture financing and foray into the digital world.
This leading North American closeout merchandise and toy retailer is expected to announce its third-quarter fiscal 2013 results on Dec 2, 2013. Our proven model does not conclusively show that Big Lots is likely to beat the Zacks Consensus Estimate this quarter. This is because the company carries a Zacks Rank #3 (Hold) and an Earnings ESP of 0.00%. For a stock to outperform, it needs both a positive Earnings ESP and a Zacks Rank of #1, 2 or 3.
Other stocks in the retail discount industry that warrant a look include Dollar General Corporation (DG-Free Report) and Ross Stores Inc. (ROST-Free Report), which hold a Zacks Rank #2 (Buy).
Get today’s Zacks #1 Stock of the Day with your free subscription to Profit from the Pros newsletter:
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 the Analyst Blog
Updated throughout every trading day, the Analyst Blog provides analysis from Zacks Equity Research about the latest news and events impacting stocks and the financial markets.
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.
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Click here to subscribe to this free newsletter today.
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros.
Get the full Report on SAVE - FREE
Get the full Report on RSH - FREE
Get the full Report on BIG - FREE
Get the full Report on DG - FREE
Get the full Report on ROST - FREE
Follow us on Twitter: http://twitter.com/zacksresearch
Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Zacks Investment Research
800-767-3771 ext. 9339
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Read the analyst report on SAVE
Read the analyst report on RSH
Read the analyst report on BIG
Read the analyst report on DG
Read the analyst report on ROST
Zacks Investment Research
- Professional Services
- Finance Trading
- Spirit Airlines
- Big Lots
- Dollar General Corporation