For Immediate Release
Chicago, IL – Nov 16, 2017 – Zacks Equity Research highlights Caterpillar CAT as the Bull of the Day and Avon Products AVP as the Bear of the Day. In addition, Zacks Equity Research provides analysis on the JA Solar Holdings Co., Ltd. JASO, Mesoblast Limited MESO and 21Vianet Group, Inc. VNET.
Here is a synopsis of all five stocks:
Bull of the Day:
Headquartered in Deerfield, IL, Caterpillar is the world's largest heavy-machinery maker and seen as a bellwether for global economic activity.
The company has benefitted a lot from improving global growth and a weak dollar since it derives more than half its sales from international markets.
Caterpillar reported another strong quarter with adjusted earnings per share surging 129% year over year. Earnings also beat the Zacks Consensus Estimate of $1.22 by 60%. Revenues improved 24.6% year over year to $11.4 billion in the quarter, surpassing the Zacks Consensus Estimate of $10.6 billion.
Better-than-expected performance resulted from strong demand for its construction equipment as well as cost-control efforts. Sales increased across all regions, with largest increase in North America, while China sales remained strong.
The management also raised its revenue and earnings guidance for the year.
Rising Earnings Estimates
Analysts have raised their estimates for the company after excellent earnings. The Zacks Consensus Estimate for the current and the next fiscal year have increased to $6.40 per share and $7.63 per share from $5.26 and $6.74, before the results.
The company has been beating estimates consistently over the past few quarters. The average positive surprise for the past four quarters is 53.1%.
Bear of the Day:
Headquartered in New York City, Avon Products is the world's largest direct seller with more than 6 million active independent sales representatives. Avon products, which are available in over 70 countries, include color cosmetics, skincare, fragrance, fashion and home products, under brand names like Avon Color, ANEW, Skin-So-Soft and Advance Techniques.
The company reported weak results for its third quarter. Adjusted earnings from continuing operations came it at 3 cents per share in the third quarter, missing the Zacks Consensus Estimate of 7 cents. This was the fifth straight quarter of miss for the company.
Total revenue was up 1% year over year and also slightly ahead of the Zacks Consensus Estimate. The management expects full-year results to be weaker than the guidance provided earlier.
"With mixed results in Q3 and some positive trends, we expect to see modest improvement continue in Q4. However, it will not be enough to overcome the slow start to 2017, and thus we expect annual results to come in below our 2017 guidance.”
The stock plunged almost 10% following the release and is now down about 66% this year.
As a result of worsening outlook for the company, analysts have been cutting their estimates. Zacks Consensus Estimates for the current and the next year are now at a loss of ($0.02) per share and earnings of $0.18 per share, down from $0.09 and $0.27 per share, before the results.
Declining estimates sent AVP back to Zacks Rank # 5. The following chart shows the negative earnings and price momentum for AVP:
3 Stocks Under $10 that Plummeted Wednesday
At Zacks, we suggest that investors pay close attention to our proven stock-picking system, which stresses the importance of earnings estimate revisions in finding winning stocks. But we also understand that lower-priced stocks often make attractive investments, and we will always cover stocks that are making newsworthy moves, big or small.
With that said, stocks that are currently trading under $10 per share can often be particularly enticing to many retail investors, as they present the chance to scoop up large positions akin to what intuitional investors and Wall Street big-wigs do with S&P 500 giants.
However, stocks trading under $10 are subject to substantial swings, which can often happen in one trading session. This means that these $10 or less stocks are some of the biggest movers on any given day.
Now, let’s take a look at three noteworthy companies trading for less than $10 per share that tumbled today:
JA Solar Holdings Co., Ltd.
This Beijing-based solar energy company has grabbed a lot of attention lately, and its stock price had soared almost 70% this year up to today as renewable energy remains a hot-button issue. But on Tuesday, shares of JA Solar sank by over 14% to $6.85 per share, which is down nearly 20% from their 52-week high.
The manufacturer of high-performance solar cells saw its stock price fall after reporting that gross profits fell 10% year-over-year. The company also missed earnings estimates, and its cell shipments declined by 7.3%. JA Solar is currently a Zacks Rank #3 (Hold).
Mesoblast, which develops cell-based medicines, saw its stock price tank over 9% today, just one day after posting first-quarter 2018 financial results that failed to inspire investor confidence. Mesoblast Limited is currently a Zacks Rank #5 (Strong Sell) and sports an “F” for both Value and Growth in our Style Scores system.
The biomedicine company’s current P/S ratio is 191.78, which is insanely high even for comparable companies in this tough industry. What’s worse, based on our Zacks Consensus estimates, Mesoblast revenues are projected to fall in the upcoming two quarters. Shares of Mesoblast fell to near their 52-week low, as they rest around $4.90 per share.
21Vianet Group, Inc.
Shares of 21Vianet Group, one of China’s leading carrier-neutral internet data center providers, plummeted almost 5.50% after the company announced today that it would report its third-quarter 2017 financial results on Tuesday, Dec. 5.
Based on our consensus estimates, 21Vianet Group is projected to post a $2.06 per share third-quarter loss. The company almost broke even in the year-ago period. It seems that investors might have started to sell their positions as they get nervous about a potentially massive year-over-year EPS decline. 21Vianet Group is currently a Zacks Rank #3 (Hold) and scored a “D” for both Value and Momentum in our Styles Scores system.
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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 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.
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21Vianet Group, Inc. (VNET) : Free Stock Analysis Report
Avon Products, Inc. (AVP) : Free Stock Analysis Report
Caterpillar, Inc. (CAT) : Free Stock Analysis Report
Mesoblast Limited (MESO) : Free Stock Analysis Report
JA Solar Holdings, Co., Ltd. (JASO) : Free Stock Analysis Report
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