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Comtech, American Airlines, Life Storage, MGM and Gaming and Leisure Properties highlighted as Zacks Bull and Bear of the Day

Zacks Equity Research
Torchmark's (TMK) Q3 rides high on better premiums at the Life and Health segments as well as benefits from lower share count.

For Immediate Release

Chicago, IL – October 18, 2018 – Zacks Equity Research Comtech Telecommunications CMTL as the Bull of the Day, American Airlines AAL as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Life Storage, Inc. LSI, MGM Growth Properties MGP and Gaming and Leisure Properties, Inc. GLPI.

Here is a synopsis of all five stocks:

Bull of the Day:

The hardest thing to do after a session like we saw yesterday is pick a Bull of the Day. With the major market averages all breaking down below or near the 200-day moving average, it’s a very precarious situation. I stick to my guns during periods like this and that means leaning on earnings. Earnings trends take long to develop and reverse. The exact opposite is true of prices when can change on a whim. Finding divergence between strong earnings trends and a weak share price is a great way to find winners in the stock market. At least if you are patient enough to wait it out.

Today’s Bull of the Day is one such stock, Comtech Telecommunications. Comtech Telecommunications Corp. designs, develops, produces, and markets products, systems, and services for communications solutions. The company's Commercial Solutions segment offers ground-based equipment, including single channel per carrier modems and solid-state amplifiers that facilitate the transmission of voice, video, and data over satellite links; and traveling wave tube amplifiers, such as high-power narrow-band amplifiers used to amplify signals from satellite earth stations, as well as safety and security technologies.

The stock is currently a Zacks Rank #1 (Strong Buy). The reason for the positive rank is the string of recent positive earnings estimate revisions for the current year. Over the last thirty days, four analysts have increased their estimates for the current year. The bullish sentiment has pushed up its Zacks Consensus Estimate from 76 cents to 96 cents for the current year. That’s a jump of over 26% and the major reason for the bullish rank.

It’s been enough to help CMTL rally from under $24 in March of this year to over $36 following its last earnings report. Since then, shares have dipped a bit, coming down close to the 200-day moving average. That 200-day sits down at $30.24 while the stock closed at $32.09, down 2.85% during Thursday’s selloff.

Bear of the Day:

Picking a Bear of the Day today is pretty darn easy. Just throw a dart at a dartboard and you’re bound to hit one. Stocks are blowing up left and right while the market is coming under pressure, testing key technical levels. Today I’m looking at a stock which is in the airline industry. Why? Well, the airline industry ranks in the Bottom 6% of our Zacks Industry Rank. That means there are several names which have seen earnings estimates revised to the downside.

Today’s Bear of the Day is American Airlines. American Airlines Group Inc., through its subsidiaries, operates as a network air carrier. It provides scheduled air transportation services for passengers and cargo. As of December 31, 2017, the company operated a mainline fleet of 948 aircraft. It serves 350 destinations in approximately 50 countries, principally from its hubs in Charlotte, Chicago, Dallas/Fort Worth, Los Angeles, Miami, New York, Philadelphia, and Phoenix, as well as in Washington, D.C. 

Currently, the stock is a Zacks Rank #5 (Strong Sell). The reason for the unfavorable Zacks Rank lies in the recent string of negative revisions coming from analysts. Over the last thirty days, nine analysts have cut their earnings estimates for the current year as well as next year. That’s slashed the Zacks Consensus Estimate for the current year from $4.77 to $4.28 while next year’s number had come down from $5.84 to $5.13.

The negative revisions are a big reason why AAL has come under so much pressure. This is a stock which was trading up over $57 in March. Since then it’s taken a tumble, coming all the way down to fresh lows under $32. The stock is set to report earnings before the bell next Thursday October 25th. Analysts will be looking for EPS of $1.12, down from expectations calling for $1.45 just ninety days ago.

While there are no stocks in the airline industry which are Zacks Rank #1 (Strong Buy) or Zacks Rank #2 (Buy) stocks. There are several Zacks Rank #3 (Hold) stocks which could be better ways to play this industry.

Additional content:

3 Great REITs to Buy Right Now

The stock market’s strong run over the past few years brought attention to high-flying growth stocks, usually from the technology sector, that were consistently outpacing the market. However, fresh uncertainty within the last few months has shifted some focus back towards other investment strategies, and now it might be time for investors to check out things like real estate investment trusts, or REITs.

REITs are companies that own, operate, or finance real estate properties that produce income, such as apartment complexes or retail locations. These companies are heavily regulated and must meet a number of qualifications to be classified as a REIT, but they do offer investors a few distinct advantages.

First of all, real estate can be a very profitable investment sector when certain economic conditions are present. What’s more, REITs must pay at least 90% of their taxable income in dividends to shareholders, so they are a great option for income investors looking for steady payouts.

Luckily for Zacks readers, the proven Zacks Rank—which emphasizes earnings estimates and estimate revisions—works with REITs just as it would with any other company. The strongest REITs are going to be those with improving outlooks and great Zacks Ranks.

With that said, check out the REITs that are model says are impressive options right now:

1. Life Storage, Inc.

Life Storage fully integrated REIT which acquires and manages self-storage properties. Locations are now under the Life Storage brand, having shifted over from Sovran Self Storage and Uncle Bob's Self Storage. The company is one of the five largest self-store brands in the world.

LSI currently sports a Zacks Rank #2 (Buy) and presents a dividend yield 4.4%. The stock has shed about 10% from the 52-week highs it reached in late August, but the fundamentals look strong at these levels as earnings estimates trend higher. Plus, LSI has a beta of just 0.4 and should serve as a great low-volatility option in current conditions.

2. MGM Growth Properties

MGM Growth owns 13 gaming properties, most of which are operated by casino giant MGM. This portfolio includes a number of iconic Las Vegas casinos, including The Mirage, Mandalay Bay, and New York-New York. The business is primarily structured through NNN leases, which means it is more protected from one-time or unexpected costs.

MGP is currently sporting a Zacks Rank #1 (Strong Buy) and an “A” grade in the Value category of our Style Scores system. The stock has a P/E of 13.0 and a PEG of 1.3. These are both nice discounts to the respective industry averages. Meanwhile, the firm is expected to grow its full-year funds from operations (FFO) by nearly 7.5% in 2018.

3. Gaming and Leisure Properties, Inc.

Gaming and Leisure Properties is an owner of regional casino properties leased to the likes of Boyd Gaming, Eldorado Resorts, and Penn National. All in all, the company owns 44 gaming properties. GLPI is another #1 (Strong Buy) stock and yields about 7.3% right now.

Analysts expect GLPI to witness long-term annualized FFO growth of 10.7%. The valuation remains attractive at a P/E of 11.1 and PEG of 1.0, and it is a relatively low beta option.

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American Airlines Group Inc. (AAL) : Free Stock Analysis Report
Comtech Telecommunications Corp. (CMTL) : Free Stock Analysis Report
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MGM Growth Properties LLC (MGP) : Free Stock Analysis Report
Gaming and Leisure Properties, Inc. (GLPI) : Free Stock Analysis Report
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