For Immediate Release
Chicago, IL – April 29, 2013 – Zacks Equity Research highlights RockTenn (RKT) as the Bull of the Day and Badger Meter (BMI) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Westamerica Bancorp. (WABC), Glacier Bancorp Inc. (GBCI) and Preferred Bank (PFBC).
Full analysis of all these stocks is available at http://at.zacks.com/?id=2678.
Here is a synopsis of all five stocks:
RockTenn (RKT) delivered its third consecutive positive earnings surprise on April 23, and earnings estimates have been soaring ever since.
This has sent the stock to a Zacks Rank #1 (Strong Buy).
Based on current consensus estimates, analysts project 43% EPS growth this year and 39% growth next year. Despite this stellar growth, shares trade at just 12.5x forward earnings.
RockTenn manufactures corrugated and consumer packaging. It was founded in 1936 and has a market cap of $7.0 billion.
RockTenn reported better-than-expected second quarter results for the second quarter of its fiscal 2013 on April 23. Adjusted earnings per share jumped 16% to $1.12, beating the Zacks Consensus Estimate by 10 cents. It was the company's third consecutive positive earnings surprise.
Net sales increased 2% to $2.325 billion, driven by a 7% increase in the Corrugated Packaging segment.
Badger Meter (BMI) has seen earnings estimates fall considerably after reporting a big earnings miss on April 16.
This has sent the stock to a Zacks Rank #5 (Strong Sell).
Although the stock has pulled back a bit since the earnings report, the valuation picture still does not look attractive. Shares trade at a premium to their historical median and the industry multiple on both a price/earnings and price/cash flow basis.
Badger Meter manufactures flow measurement and control products for water and gas utilities, municipalities and industrial customers worldwide. It was founded in 1905 and has a market cap of $638 million.
Badger Meter delivered disappointing first quarter results on April 16. Earnings per share came in at 20 cents, missing the Zacks Consensus Estimate of 48 cents by 58%. It was also a 52% decline from the same quarter last year.
Latest Posts on the Zacks Analyst Blog:
Westamerica Stays at Underperform
On Apr 23, 2013, we reiterated our long-term recommendation on Westamerica Bancorp. (WABC) at Underperform. This reflects Westamerica’s dismal first-quarter results, which declined both on a sequential and year-over-year basis.
Westamerica’s first-quarter earnings of 64 cents per share declined from the prior-quarter earnings of 70 cents and year-ago earnings of 75 cents. The results were adversely affected by sluggish top-line growth and an increase in operating expenses. However, improving credit quality and stable capital ratios were the tailwinds.
Following the first-quarter results, the Zacks Consensus Estimate for 2013 has gone down 2.3% to $2.60 per share. Likewise, the Zacks Consensus Estimate for 2014 has declined 5.4% to $2.62 per share. With the Zacks Consensus Estimates for both 2013 and 2014 going down, Westamerica currently carries a Zacks Rank #4 (Sell).
Further, Westamerica’s net interest margin (NIM) has been falling over the last several quarters owing to the challenging economic environment. Sluggish economic recovery and the Federal Reserve’s decision to keep short-term interest rates low through mid-2015 are expected to keep NIM under pressure going forward.
Moreover, Westamerica’s interest earnings assets have remained a matter of concern due to weak interest rates and low investment returns amid a sluggish economic recovery.
Also, Westamerica has been continuously experiencing pressure on its credit quality. Further, Westamerica’s securities portfolio has historically remained higher than its peers, which is expected to adversely affect the quality of earnings.
Other Banks Worth Considering
While we have a bearish take on Westamerica, we would suggest considering stocks with a better Zacks Rank. These include Glacier Bancorp Inc. (GBCI) and Preferred Bank (PFBC) with a Zacks Rank #1 (Strong Buy).
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.
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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