For Immediate Release
Chicago, IL –June 01, 2017 –Zacks Equity Research highlights Craft Brew Alliance, Inc. ( BREW – Free Report) as the Bull of the Day Signet Jewelers Limited ( SIG – Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Enbridge Energy Partners LP ( EEP – Free Report), Delek Logistics Partners LP ( DKL – Free Report) and Enbridge Energy Management LLC ( EEQ – Free Report).
Here is a synopsis of all five stocks:
Bull of the Day :
Craft Brew Alliance, Inc. (BREW – Free Report) is seeing robust sales growth as craft beer remains a top beverage choice with consumers. This Zacks Rank #1 (Strong Buy) recently reaffirmed full year guidance.
Craft Brew Alliance ("CBA") is the 5th largest craft brewer in the United States. It operates breweries and brew pubs across the U.S. and produces several well known brands, including Kona Brewing Company, Appalachian Mountain Brewery, Cisco Brewers, Omission Brewing Co., Redhook Brewery, Square Mile Cider Co., and Widmer Brothers Brewing.
Kona is Hawaii's oldest craft beer, established in 1994.
The company is headquartered in Portland, Oregon.
A Beat in the First Quarter
On May 3, CBA reported its first quarter results and beat the Zacks Consensus Estimate by 9 cents. Earnings were a loss of $0.09 versus the consensus of a loss of $0.18.
Net sales rose 13% to $44.3 million.
Kona, a top 10 national craft beer brand, is the cornerstone of the company's strategy.
In the first quarter it saw 14% depletion growth despite strong craft beer competition in the market which has pressured overall craft beer sales. This growth included 60% growth in international depletion. Big Wave Golden Ale was the driving force in the quarter, with a 33% gain in depletions.
CBA also launched Hanalei Island IPA which was the top 11th new craft beer launched in the quarter as measured in grocery sales by Nielsen.
While it is an independent craft brewer, it has relationships with the big boys including Anheuser-Busch.
It has successfully completed the qualification process to begin brewing in their Fort Collins, Colorado brewery and will begin shipments shortly. This brewery is more efficient than its production at City Brewing in Memphis and at its Woodinville brewery, both which are being wound down.
CBA's shipments in the wholesale market also saw growth, rising 2.1% year-over-year, while gross margins jumped by 640 basis points to 28.6% compared to the first quarter of last year.
Reaffirmed Full Year Guidance in a Tough Market
There are a LOT of craft brewers in America now. All of that inventory is making market conditions tough, even for a bigger player like CBA.
It has been working to reduce costs by closing inefficient breweries. The results of those changes are seen in the first quarter results.
For the full year, it expects total depletion change of flat to growth of 6%.
Its gross margin is also forecast to improve further to a range of 30.5% to 32.5%.
“We saw a 45% increase in gross profitability versus last year which was supported by strong topline growth, healthy revenues per barrel sold, and improved brewery efficiencies,” said Joe Vanderstelt, CFO.
“The upcoming closure of our Woodinville brewery in July will allow us to take another step forward in reducing fixed overhead costs, increasing gross margins, and improving capacity utilization," he added.
There's only one estimate for the company on Zacks.com but that estimate has been adjusted upwards in the last 30 days.
The company is expected to lose $0.05, up from a loss of $0.13 just 30 days ago. It's also expected to be profitable in 2018 as the Zacks Consensus is looking for $0.14.
Signet Jewelers Limited (SIG – Free Report) is suffering as consumers avoid the mall, which is where most of their stores are located. This Zacks Rank #5 (Strong Sell) saw same-store-sales decline in all of its worldwide brands.
Signet is the largest retailer of diamond jewelry in the world. It operates about 3,600 stores worldwide under the well known brands of Kay Jewelers, Zales, Jared The Galleria of Jewelry, H.Samuel, Ernest Jones, Peoples and Piercing Pagoda.
Huge Miss in Q1 Adds to the Pain
Shares of Signet had already been sliding for most of 2017 but it's fiscal first quarter earnings report on May 25 sent them tumbling even lower.
Signet missed by 63 cents, reporting earnings of $1.03 versus the consensus of $1.66.
Same-store-sales got absolutely crushed, falling 11.5%. It said that 330 basis points of that decline was due to the later timing of Mother's Day, which is a significant jewelry holiday.
But even still, not a single brand saw positive comps.
Among its brands, the worst performers included Kay, which saw same-store-sales fall 13.5% year-over-year. Zales was down 13.4%, including a decline of 13.8% at Zales US. Jared was equally as weak, with same-store-sales falling 10.3%.
Many of their brands have brick and mortar stores in the mall, which saw declining traffic as consumers shun the malls. Diamond fashion jewelry such as bracelets, earrings and necklaces were the best performers in the merchandise portfolio.
3 Stocks to Buy from Top-Ranked Energy Industry
The energy sector has always driven market movement and investors are keen on tapping stocks from this space. Per our latest Earnings Trends, the sector witnessed impressive year-over-year dollar growth in the first quarter. But there are a few industries in the sector and proper investment calls for intense research.
This article shows why and how the Oil/Gas Production Pipeline MLP industry a lucrative investment proposition for now.
Attractions in Oil/Gas Pipeline MLP
Top Ranked in Energy Sector
Oil/Gas Production Pipeline MLP is top ranked among the industries in the Oil & Energy sector. It is ranked #76 and falls within the top 30% of industries.
Investors should know that that the top 50% of the Zacks Ranked industries is likely to outperform the bottom 50% by a factor of more than two to one. For more information please refer to our Zacks Industry Rank.
Reaps More Yield than S&P 500
Dividend yield is among the few important parameters that investors usually consider before investing in a particular sector.
The current dividend for the Oil/Gas Production Pipeline MLP industry is 6.7%, which is way higher than the 1.4% yield for the S&P 500 Index.
Our proprietary model shows that the Oil/Gas Production Pipeline MLP has been witnessing net margin growth since first-quarter 2014. The industry’s net margin during the January to March quarter of 2017 came at 6.9%, far better than the 3.7% margin for first-quarter 2014.
On Nov 30, 2016, OPEC signed a landmark deal to curb crude production by 1.2 million barrels per day. Following the cartel in early December, non-OPEC players, headed by Russia, decided to take the same path and lowered oil output by 558,000 barrels per day. So they collectively decided to curb crude production by 1.8 million barrels each day.
On May 25, in the Vienna meeting, producers from both the sides voted to extend the slash in oil production by the same mark of 1.8 million barrels per day for the coming nine months.
We believe that U.S. shale players are likely to take the opportunity of production cut and may continue producing more oil at the expense of OPEC. In fact, the recent weekly rig count data provided by oil field services firm Baker Hughes showed the 19th consecutive increase in the U.S. weekly rig count.
The factor that is driving the shale firms to pump more crude is that they are now in a position to sell the commodity, recovered significantly from Feb 2016 historical lows, at much higher prices. With more production, there will be greater needs for new oil pipeline and storage infrastructures and will be beneficial for stocks belonging to the Oil/Gas Production Pipeline MLP industry.
3 Buy Rated Stocks from the Industry
With the help of our proprietary Stock Screener we pinpoint three prospective stocks carrying either Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here .
Houston, TX-based Enbridge Energy Partners LP ( EEP – Free Report), a master limited partnership (MLP), is engaged in the gathering, processing and transmission of natural gas and crude oil. The partnership currently sports a Zacks Rank #1 and has VGM Score of “B.”
VGM Score, where V stands for Value, G for Growth and M for Momentum, is a comprehensive tool that allows investors to filter the standard scoring system and pick winning stocks. Also, Enbridge Energy beat the Zacks Consensus Estimate in three of the trailing four quarters, with an average positive earnings surprise of 38.22%.
Delek Logistics Partners LP ( DKL – Free Report) – headquartered in Brentwood, TN – has midstream assets utilized for storage and transportation of crude in the U.S.
The partnership carries a Zacks Rank #2 and VGM Score of “A.” Moreover, for 2017, we are expecting 18.8% year-over-year earnings growth for Delek Logistics.
Headquartered in Houston, TX Enbridge Energy Management LLC (EEQ – Free Report) primarily operates oil and gas transportation and storage properties through limited partner interest in Enbridge Energy Partners.
Presently, the stock carries a Zacks Rank #2.
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