For Immediate Release
Chicago, IL – November 22, 2019 – Zacks Equity Research Shares of Celsius Holding CELH as the Bull of the Day, Kemet Corporation KEM asthe Bear of the Day. In addition, Zacks Equity Research provides analysis on Target TGT, Fidelity National Financial FNF and Duke Realty Corporation DRE.
Here is a synopsis of all five stocks:
Bull of the Day:
Celsius Holding is a Zacks Rank #1 (Strong Buy) and recently beat the Zacks Consensus Estimate when the company reported earnings. Since then, estimates have moved higher and the stock looks poised for a big run. Let's dive a little deeper in this Bull of the Day article.
Celsius Holdings, Inc. specializes in commercializing healthier, nutritional functional foods, beverages and dietary supplements. Celsius Holdings, Inc. markets Celsius®, the calorie burner, through its wholly-owned operating subsidiary, Celsius, Inc. The Company sells its products through grocery, drug, convenience, club and mass, and health and fitness channels. The Company's products are produced in Mooresville, North Carolina, and Monroe, Wisconsin. Celsius, Inc. is dedicated to providing healthier, everyday refreshment through science and innovation. The Company serves customers in the United States and internationally. Celsius Holdings, Inc. is based in Delray Beach, Florida.
On November 7, CELH topped the Zacks Consensus of a breakeven quarter in reporting EPS of $0.03. Revenues of $20.4M were 23% ahead of last years levels and that topped the estimate by $1.45M.
This was a really impressive quarter and it almost didn't get noticed. Almost -- but the Zacks Rank caught it as it moved up to a Zacks Rank #1 (Strong Buy).
Following the recent beat, estimates have been moving higher. I see the estimates for this quarter moving from breakeven to a gain of a penny.
The 2019 Zacks Consensus Estimate has moved from $0.17 to $0.19 over the last 60 days and that has helped the stock raise up to a Zacks Rank #1 (Strong Buy).
The valuation looks really good, 22x forward earnings multiple is not that expensive when you consider the 23% topline growth. A price to book multiple of 3.8x is a little high as value investor tend to focus on a P/B of less than 3x. The price to sales multiple of 4.4x tells us that market will reward this stock for revenue growth.
Bear of the Day:
Kemet Corporation has slipped to a Zacks Rank #5 (Strong Sell) after guiding lower. It should be noted that the company has also agreed to be bought for $27.20 in cash, so let's take a look at what investors should do if they hold KEM in this Bear of the Day article.
KEMET Corporation and its subsidiaries is the world's largest manufacturer of solid tantalum capacitors and and one of the world's largest manufacturer of multilayer ceramic capacitors. According to industry sources, tantalum and ceramic capacitors are the two fastest growing sectors of the United States capacitor industry. Capacitors are electronic components that store, filter and regulate electrical energy and current flow and are one of the essential passive components used on circuit boards.
On November 11, the company announced that Yageo will acquire all KEM shares for $27.20 in a transaction that is valued at $1.8B.
Investors that own the stock will recieve that amount in cash when the deal is completed, but with the stock trading at $26.50 or there abouts, the market is saying there is plenty of wiggle room in this deal.
The question becomes is there a good chance this deal doesn't go through, and if so, what happens to the stock?
Let's look at why this is a Zacks Rank #5 (Strong Sell) despite the buyout.
On November 11 the company reported inline EPS and revenue that was ahed of expectations. It should be noted that revenue was down 6.2% on a year over year basis.
The company noted that they expect to see revenue to decline 8% to 13% in the next quarter. That works out to be roughly $285M to $301M and the consensus revenue estimate was at $323M.
That is not what you want to see as a shareholder and should the deal fall through, this stock will tumble in a big way.
Risk / Reward
So the big question is what should you do if you own this stock?
First, it is hard to recommend further purchase of a stock that is in a deal to be bought out. The chances of a white knight bid paying even more are very low considering the guidance for next quarter.
If you believe there is a good chance that this deal doesn't go through, you should sell the stock.
If you believe the deal happens, then hang in there and get the full price for your shares.
If it was me, I would look at it as a bird in the hand is worth two in the bush.
3 Hot Dividend-Paying Stocks to Buy to Close Out 2019
The stock market dipped lower Thursday as Wall Street assesses the trade war developments between the US and China. The DJIA was down as low as 100 points and the S&P 500 slipped down 0.4% at one point. The back and forth trade developments coming from the countries’ leaders caused the equity markets to stall as they await more concrete indications.
Despite the continued geopolitical uncertainty, corporate earnings have helped reassure the economic outlook. Consumer spending continues to anchor the domestic economy as retail giants reported strong financial figures in the third quarter. However, for those still not completely optimistic about the economic outlook, dividend stocks are a great precautionary move to make.
Targetis a solid stock to consider after retail sales rebounded last month. Retail sales i.e. purchases at stores, restaurants and online, rose a seasonally adjusted 0.3% in October. In addition to the overall rebound performance in the retail sector, Target just posted scorching hot third quarter results that sent its shares to new all-time highs.
Target looks poised to cash in on the holiday season with its beefed-up workforce and its Disney partnership, which can help it capture a larger portion of toy sales. Target pays out a quarterly dividend with a healthy 2.09% yield that can bolster returns. Target shares have soared over 90% in 2019 and the stock currently sits at a Zacks Rank #2 (Buy).
Fidelity National Financialis a leading provider of title insurance, specialty insurance, and claims management services. The insurance company is also coming off a strong third quarter where its total revenue grew 4.76% and its earnings soared 41%. The company also repurchased 810,000 shares of common stock during the third quarter for approximately $35 million. The strong quarter continued the stock’s YTD rise and it now is up over 52% on the year.
Fidelity pays out a dividend with a 2.6% yield and has a beta ratio of 0.83, which can help weather broader market volatility. Our Q4 consensus estimates forecast the firm’s earnings to climb over 36% to $0.86 per share and for its total revenue to hike 26.55% to $2.14 billion. The insurance company’s earnings estimates have been revised higher across the board helping give the stock a Zacks Rank #1 (Strong Buy).
Duke Realty Corporationis a domestic industrial REIT engaged in owning, managing, and developing industrial properties across the nation. Its portfolio of industrial properties comprises of about 156 million rentable square feet located in 20 key logistics markets. Duke Realty is coming off a third quarter where its core FFO rallied 5.71% to $0.37 per share and its net sales jumped 4.07% to $241.3 million.
REITs are a solid move to make especially after the Federal Reserve cut interest rates three times already this year. The low rate environment allows REITs to refinance their debt and use the extra cash to expand or finance other initiatives. Duke Realty’s dividend has a 2.67% yield and its shares have risen over 34% YTD. Q4 estimates look solid as they call for core FFO to leap 8.57% to $0.38 per share and for sales to gain 7.24%. Duke Realty is currently a Zacks Rank #2 (Buy).
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Kemet Corporation (KEM) : Free Stock Analysis Report
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Target Corporation (TGT) : Free Stock Analysis Report
Duke Realty Corporation (DRE) : Free Stock Analysis Report
Celsius Holdings Inc. (CELH) : Free Stock Analysis Report
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