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Domino???s Pizza, JetBlue Airways, Texas Instruments, ON Semiconductor and Vishay Intertechnology highlighted as Zacks Bull and Bear of the Day

Zacks Equity Research
Texas Capital (TCBI) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.

For Immediate Release

Chicago, IL – October 9, 2017 – Zacks Equity Research Domino’s Pizza(NYSE: DPZ – Free Report)as the Bull of the Day, JetBlue Airways(Nasdaq: JBLU – Free Report)as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Texas Instruments (Nasdaq: TXN– Free Report), ON Semiconductor (Nasdaq: ON– Free Report) andVishay Intertechnology (NYSE: VSH– Free Report).

Here is a synopsis of all five stocks:             

Bull of the Day:                   

Despite a pretty solid economic situation, it has been a rough stretch for the restaurant sector. Heavy competition and changing consumer tastes are taking their toll, while investors have largely moved on to higher growth areas of the economy.

And while that might be the case for most of the companies in this segment, is it true for all of the restaurants? I would definitely argue no, and that is particularly true if you look at the fundamentals for Domino’s Pizza (NYSE: DPZ – Free Report).

Domino’s in Focus

While Domino’s is off of its highs like a number of other restaurant stocks, the company has come surging back in recent weeks and is arguably well-positioned for its earnings report later this week. In fact, the momentum has been so strong in the shares that it has earned itself a ‘B’ grade on this front, and industry crushing metrics too.

And it isn’t hard to see why the momentum has been strong when we consider that the sell-off in shares for this company was probably overblown, and that fundamentals remain intact. Analysts have actually been raising estimates for the company’s earnings prospects in recent weeks, so if anything, the story is improving for DPZ investors.

Recent Estimates

If we look to the most recent earnings estimates, we see that analysts have been raising their projections for DPZ’s earnings prospects, almost unanimously. Double-digit percentage EPS growth is projected, while we see a similar level of sales growth baked into the numbers too.

And remember, this is in a time that DPZ shares were facing rocky trading, so the fundamental story definitely didn’t lineup with the negativity that investors were largely seeing in the shares. Plus, with earnings fast approaching and estimates still rising into the report, there is plenty of hope that the stock can continue on its recent rebound and hit fresh highs once more.

Bear of the Day:

It has been a summer to forget for the nation’s airlines, as poor weather and heavy competition have combined to push many names in the sector lower.

However, thanks to some positive news from Delta in recent sessions, the sector has been coming back with full force as of late. But with a nice run in airline stocks from this move recouping some of the recent losses, investors have to be wondering if the trend can continue or if a return to a sluggish environment is ahead.

Well, it is hard to say for all airlines, but the outlook certainly isn’t great for JetBlue Airways (Nasdaq: JBLU – Free Report).

Why JBLU?

JetBlue has benefited from the surge in optimism just like its peers, but its fundamental picture remains quite poor. This is especially evident if you look to recent earnings estimates for the stock.

For the current quarter, we have seen eight estimates go lower for earnings in the past month compared to zero higher, while we have seen a similar trend for the current year as well. And for both time frames, a double-digit percentage decline is projected for the change in EPS too.

The magnitude of the recent shift in the consensus is also pretty telling for JetBlue. The company’s consensus estimate has gone down by about 17.5% in the past two months, while the full year estimate has plunged by over 9% as well. The longer-term picture doesn’t get much better, as growth is expected to be positive, but those estimates have come down sharply in recent weeks too.

Additional content:

3 ‘Internet of Things’ Stocks to Buy Now

One of the strongest corners of the market this year has been the semiconductors industry. Throughout the chip-making market, companies have successfully adapted to the changing needs of the consumer, including an increased demand for small, high-powered chips that enable “Internet of Things” (IoT) devices.

For those that don’t know, the Internet of Things is the growing world of interconnected household and industrial devices. Everyday products and machines can now be embedded with sensor technology to process data or interact with other electronic devices.

For example, consumer-level IoT products include things like Amazon’s (AMZN) Echo “smart speaker,” wearable motion and activity tracking products, and advanced in-car technology. On the commercial side of the IoT market, industrial manufacturers have begun implementing sensors into machines to track performance and efficiency.

(Also Read: How to Invest in the "Internet of Things")

As demand for the microchips that power these IoT devices continues to grow, semiconductor manufacturers with a focus on IoT products will continue to benefit. With that said, we’ve found three already-strong stocks that are looking to benefit even more from further IoT growth.

1.       Texas Instruments (Nasdaq: TXN– Free Report)

Although you might recognize the brand because of its calculators, Texas Instruments is actually one of the leading suppliers of advanced semiconductors in the world. The company’s IoT profile falls under its Embedded Processors division, which includes the Connectivity, Microcontrollers, and Processors categories. In its most recent earnings report, Texas Instruments saw growth of 15% in its Embedded Processors segment, and that’s not to mention that it once again surpassed our consensus estimates for earnings and revenue. Texas Instruments is currently a Zacks Rank #2 (Buy), and on top of this, the company pays a nice 2.44% dividend.

2.       ON Semiconductor (Nasdaq: ON– Free Report)

ON Semiconductor has traditionally been known as a power management and commodity chip maker, but the company has started to carve out a budding IoT division. ON is now heavily involved with automotive solutions, and its IoT offerings also include products catered to wearables, smart city development, and industrial automation. Currently, the stock is sporting a Zacks Rank #1 (Strong Buy) and an overall VGM grade of “A.” ON has emerged as an exciting growth pick, with current consensus estimates calling for EPS growth of 75% and sales growth of 38% this fiscal year. The company’s P/E ratio of 13.75 and P/S ratio of 1.61 also work to show that its shares may be undervalued right now.

3.       Vishay Intertechnology (NYSE: VSH– Free Report)

Vishay Intertechnology is a global manufacturer and supplier of discrete semiconductors. The company has a broad portfolio of unique passive and active solutions that are tailored to the “things” being controlled in the IoT. Vishay markets its portfolio to manufacturers of everything from biometric monitoring systems to fitbands and smart appliances. The stock is currently a Zacks Rank #1 (Strong Buy) and has an “A” grade for Value. VSH has a P/E ratio of 14.51, as well as a PEG ratio of 0.71 and a P/S ratio of 1.18—all figures that suggest its shares are undervalued. Also, based on our current consensus estimates, we expect to see Vishay post EPS growth of 58% and sales growth of 9% this fiscal year.

Bottom Line

The Internet of Things is one of the most exciting emerging tech markets in the world. Home automation products are fun. In-car technology is cool.

And while these specific products are interesting, the real moneymakers in these situations are the companies that are building the tech that powers these products. The Internet of Things needs semiconductors to function, and as the IoT grows, so too will semiconductor companies.

The best way for investors to cash in on this growing trend is to identify semiconductor companies that are not only investing in the Internet of Things, but are also displaying solid fundamentals and impressive Zacks metrics.

Want more stock market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!

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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.

Strong Stocks that Should Be in the News

Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year. See these high-potential stocks free >>.

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JetBlue Airways Corporation (JBLU) : Free Stock Analysis Report
 
Domino's Pizza Inc (DPZ) : Free Stock Analysis Report
 
Texas Instruments Incorporated (TXN) : Free Stock Analysis Report
 
ON Semiconductor Corporation (ON) : Free Stock Analysis Report
 
Vishay Intertechnology, Inc. (VSH) : Free Stock Analysis Report
 
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