The Zacks Analyst Blog Highlights: Prudential Financial, Hartford Financial Services Group, Western Asset Mortgage Capital, Northfield Bancorp and Spirit Realty Capital

Zacks

For Immediate Release
 
Chicago, IL – November 07, 2013 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Prudential Financial, Inc. (PRU-Free Report), The Hartford Financial Services Group Inc. (HIG-Free Report), Western Asset Mortgage Capital Corporation (WMC-Free Report), Northfield Bancorp, Inc. (Staten Island, NY) (NFBK-Free Report) and Spirit Realty Capital, Inc. (SRC-Free Report).
 
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

Here are highlights from Wednesday’s Analyst Blog:

Will Prudential (PRU) Disappoint on Earnings?

Life insurer Prudential Financial, Inc. (PRU-Free Report) is set to report third-quarter 2013 results today after the market closes. Last quarter, it posted a 16.2% positive surprise. Let’s see how things are shaping up, prior to this announcement.
 
Growth Factors This Past Quarter
 
Prudential has a well diversified business profile with reach in different markets and a broad product portfolio.
 
Prudential is set to benefit from the aging American population. The company is witnessing a huge demand for retirement benefits products as baby boomers enter retirement.
 
Moreover, the acquisition of Individual Life Insurance business of The Hartford Financial Services Group Inc. (HIG-Free Report) at the end of 2012, has helped the company earn a place among the top five largest individual life insurance companies in the U.S. in terms of new recurring premium sales.
 
The company also has significant overseas business which is generating strong earnings.  
 
Also, Prudential’s Retirement segment is set to greatly benefit from the company’s penetration in the pension risk transfer business.  
 
Earnings Whispers?
 
Our proven model does not conclusively show that Prudential is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case with Prudential as you will see below.
 
Zacks ESP 0.0%: That is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at $2.10. The difference is 0.0%.
 
Zacks Rank: Prudential’s Zacks Rank #2 (Buy) increases the predictive power of ESP. This when combined with a 0.0% ESP makes surprise prediction difficult. We caution against stocks with Zacks Ranks #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
 
Other Stocks to Consider
 
Here are some other companies you may want to consider as our model shows these have the right combination of elements to post an earnings beat this quarter.
Western Asset Mortgage Capital Corporation (WMC-Free Report), earnings ESP of +12.4% and a Zacks Rank #3 (Hold).
 
Spirit Realty Capital, Inc. (SRC-Free Report), earnings ESP of +137.5% and a Zacks Rank #3 (Hold).
 
Northfield Bancorp Upped to Strong Buy
 
On Nov 5, Zacks Investment Research upgraded Northfield Bancorp, Inc. (Staten Island, NY) (NFBK-Free Report) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

Northfield Bancorp has been witnessing rising earnings estimates following the announcement of strong third-quarter results. Moreover, this bank has delivered positive earnings surprises in the last 4 quarters, with an average beat of 9.5%.

Northfield Bancorp reported third-quarter 2013 results on Oct 23. Earnings per share of 9 cents surpassed the Zacks Consensus Estimate of 7 cents by 28.7%. Results benefited from increased revenues, partially offset by higher operating expenses and a rise in provision for credit losses.

Net interest income rose 13.7% year over year to $19.3 million. Moreover, non-interest income increased 51.3% to $2.6 million. On the flip side, non-interest expense rose 10.7% from the prior-year quarter to $13.3 million.

Further, asset quality was a mixed bag. Nonperforming assets decreased 16.6% from the prior quarter to $20.2 million. However, provisions for loan losses of $0.8 million were up 96.0% sequentially.

Additionally, following the earnings release, the Zacks Consensus Estimate for 2013 increased by a penny to 31 cents per share over the last 30 days. Similarly, for 2014, the Zacks Consensus Estimate advanced 7.1% to 30 cents per share over the same time period.

Positive earnings surprises and favorable estimate revisions stimulated the rank upgrade.
 
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

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