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Duluth, Culp, J2 Global, Hewlett Packard and Garmin highlighted as Zacks Bull and Bear of the Day

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Zacks Equity Research
Potbelly Corporation (PBPB) could be a stock to avoid from a technical perspective, as the firm is seeing unfavorable trends on the moving average crossover front
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For Immediate Release

Chicago, IL – October 23, 2018 – Zacks Equity Research Duluth Holdings DLTH as the Bull of the Day, Culp Inc. CULP as the Bear of the Day. In addition, Zacks Equity Research provides analysis on J2 Global, Inc. JCOM, Hewlett Packard Enterprise Company HPE and Garmin Ltd. GRMN.

Here is a synopsis of all five stocks:

Bull of the Day:

Through its popular Duluth Trading brand, Duluth Holdings is a retailer that sells casual wear, workwear, and accessories for men and women. Duluth markets its products under trademarks, trade names, and service marks including Dry on the Fly, Duluthflex, Longtail T, and its namesake brand, among many other.

Duluth went public back in 2015, and the company was founded in 1989.

Better-Than-Expected Q2 Earnings

Duluth’s second quarter results showed nice growth overall. Earnings of 20 cents per share easily beat the Zacks Consensus Estimate, while revenues of $110.7 million rose 28.3% year-over-year.

Revenue growth in Q2 was driven primarily by a nice uptick in direct sales, and a huge 74% jump in retail sales; new store openings were the main reason for soaring retail store sales.

And thanks to lower spending on advertising and marketing, the company’s bottom line expanded.

As a result, management reiterated its guidance for the year, with sales and EPS growth of 20% and 14%, respectively.

CEO Stephanie Pugliese said that this quarter was Duluth’s 34th quarter in a row that sales increased year-over-year, and she reaffirmed that the retailer is still on track to open 15 new stores during the fiscal year.

“These results demonstrate the strength of the Duluth Trading brand and validate the investments we have made in building our omnichannel presence over the past few years. For the balance of the year, we plan to focus on product innovation, digital marketing, opening the remaining seven stores, and the completion of key technology and infrastructure projects to prepare us for our peak selling season,” said Pugliese in Duluth’s earnings release.

Bear of the Day:

Headquartered in High Point, North Carolina, Culp Inc. is a company that manufactures, sources, markets, and sells mattress and upholstery fabrics. Its fabrics are used in residential and commercial furniture and bedding products like sofas, recliners, chairs, loveseats, sectionals, sofa-beds, office seating, panel systems, and mattress sets.

Shares of CULP have experienced volatile stretches throughout 2018, and the stock is down almost 35% since the start of the year.

Last quarter, Culp reported disappointing results for its first quarter fiscal 2019.

Earnings of 24 cents matched the Zacks Consensus Estimate, while revenues of $72.5 million fell 10.1% year-over-year.

Mattress fabrics sales were down 23.6%, but upholstery fabrics sales ticked up 10.9% from the prior year period.

Culp did provide guidance for Q2, and anticipates sales to be down about 5% compared to the same period last year. Pre-tax income is expected to be in the range of $3.6 million to $4.6 million.

“As expected, our results for the first quarter reflect challenging bedding industry conditions resulting primarily from the significant increase of low-priced imported mattresses from China…While we are experiencing considerable headwinds, we are optimistic that we will begin to see improvement in our quarterly results in the second half of the fiscal year,” said Frank Saxon, president and CEO.

Additional content:

3 Tech Stocks for Dividend Investors to Buy Now


Tech stocks have been unpredictable at times recently, but the sector has rebounded from volatility strongly at times, and there is no question that tech has been the leader of the market’s strong multiyear run. However, this might mean that income investors—those focused on finding companies with solid dividends—might be feeling left out, as tech stocks aren’t really known for their payouts.

Finding a strong dividend-yielding tech stock might feel like searching for a golden goose, but investors should not feel too intimidated. In fact, dividend-focused investors can search for the best tech stocks by using the Zacks Stock Screener, the perfect one-stop screening tool for investors of all kinds.

By limiting our search to companies in our “Computer and Technology” sector with Zacks Rank #2 (Buy) or better rankings, we can ensure that we are finding the highest quality stocks to buy right now. Throw in your preferred dividend yield and voila—the best tech stocks for dividend investors to target!

Check out three of these stocks to buy now:

1. J2 Global, Inc.

j2 Global provides cloud-based communications, storage messaging services, and digital media. Its enterprise services include eFax, eVoice, KeepItSafe, and Onebox, and it owns popular media companies like IGN, Mashable, and PC Mag. The company also provides software-as-a-service communication services and solutions.

J2 has a Zacks Rank #2 (Buy) and a dividend yield of 2.3%. Earnings are expected to improve by double-digit percentages this year, but the real story here is the valuation picture. JCOM is trading at just 12x earnings and has a PEG of 1.5, both of which look like significant discounts compared to the industry.

2. Hewlett Packard Enterprise Company

Hewlett Packard Enterprise is an integrated systems company focused on enterprise offerings like IT solutions, servers, and cloud-based products. The old Hewlett Packard Company might have been losing some of its clout, but the spinoff has created new efficiencies for HPE, and analysts are getting on board with this Zacks Rank #2 (Buy) stock right now.

At current levels, the stock is presenting a dividend yield of 2.9%. HPE is also expected to see significant earnings growth this year, with full-year EPS estimates calling for a 60% improvement over the prior year. The firm has a long-term projected growth rate of 10%. Moreover, shares are trading at just 10x forward earnings.

3. Garmin Ltd.

Garmin is a designer of GPS navigation and wearable technology equipment. The stock is holding a Zacks Rank #2 (Buy) and presents a dividend yield of about 3.4%. Investors have to pay a slight premium for GRMN right now, but a valuation of 19x forward earnings and a PEG ratio of 2.6 are certainly not outrageous.

Meanwhile, Garmin generates $3.42 in cash per share and sticks out from the rest of the technology group with its net margin of 18.7%, which dramatically outpaces its industry’s average. Garmin is also an efficient company, evidenced by its RoE of 16%.

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

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Hewlett Packard Enterprise Company (HPE) : Free Stock Analysis Report
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