For Immediate Release
Chicago, IL – December 20, 2022 – Zacks Equity Research shares Global Partners GLP as the Bull of the Day and MGM Resorts MGM as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Airgain, Inc. AIRG, Kaleyra, Inc. KLR and TESSCO Technologies Inc. TESS.
Here is a synopsis of all five stocks:
Bull of the Day:
Global Partners is a Zacks Rank #1 (Strong Buy) that is an adaptive distribution energy company. Global Partner's focus is to source low-cost energy in bulk and then transport products through its vertically integrated adaptive distribution network to wholesale, commercial and retail customers.
Despite the recent pullback in crude oil, the stock is trading just under its 2022 highs. The relative strength in the name is very evident, which signals further gains in 2023. Additionally, a recent earnings report and surging earnings estimates is bringing more attention to the name.
More About GLP
Global Partners was incorporated in 2005 and is headquartered in Waltham, MA. The company focuses on the regions of New England, New York and the Mid-Atlantic. Global employs over 2400 people and has a market cap of $1.1 Billion.
The company has its hand in all aspects of the energy markets. They purchase, sell, gather, blend, store, and transport gasoline and gasoline blendstocks, distillates, residual oil, renewable fuels, crude oil, and propane to wholesalers, retailers, and commercial customers.
The stock has a Zacks Style Score of "A" in Growth, Momentum and Value. Global Partners currently pays a 7.5% dividend.
On November 4th, GLP reported a 135% EPS beat for Q3. Earnings came in at $3.12 v the $0.86 a year ago. Revenues came in at $4.3 billion v the $3.32 billion last year. EBITDA climbed to $168.5M from $79.2M last year.
The Gasoline Distribution and Station Operations segment performed well in Q3. The company saw increased activity at its convenience stores and higher retail fuel margins year-over-year.
Management commented that for the Wholesale segment, fuel inventory was managed effectively despite sustained backwardation in the gasoline and distillates markets. They added that the Commercial segment saw a year-over-year increase in bunkering activity.
The earnings beat was the fifth in a row and the eighth out of the last ten quarters. Since that streak began, the stock is up over 130%.
After the big earnings report, analysts started to take estimates higher across all time frames.
For the current quarter, numbers have been taken 197% higher over the last 60 days, from $0.47 to $1.40. For the current year, they have gone from $7.17 to $9.88, a 38% rise, over that same time frame.
This is a steady improvement that will continue into next year. Over the last 60 days, next year's numbers have gone from $2.91 to $3.20.
The Technical Take
The relative strength in the name as crude oil prices head lower is telling. Investors are buying this name and anticipate the stock is heading back to the 2014 all-time highs of $45.75.
For those looking to buy pullbacks, the moving averages have been fairly reliable. While the 200-day MA has cracked twice, the bulls reclaimed that level and the stock continues its march higher. The 50-day has been holding since October and the 21-day MA has been short-term support for a majority of November.
The current 200-day is just under $28 and would likely find support it markets sold off. The 50-day $30.50 is one to watch for really bullish investors as the stock might be too strong to see a big sell off below the $30 level.
Upside Fibonacci targets drawn from the COVID sell off are $41.25 and $62.50
Global Partners offers investors an opportunity to get that energy exposure and get paid a hefty dividend. The company has posted consecutive quarters of strong cash flows and is looking to increase its scale through acquisitions.
In 2022, stocks showing relative strength typically go on to outperform the market. There is no reason to think that 2023 will be any different and being invested in the energy space will likely continue to reap rewards.
Look for GLP to close out the year strong and be a top performer in 2023.
Bear of the Day:
MGM Resorts is a Zacks Rank #5 (Strong Sell) that owns and operates casino, hotel and entertainment resorts in the United States and Macau. The company's resort portfolio incorporates 30 unique hotel offerings, including some of the most familiar resort brands in the industry such as Bellagio, MGM Grand, Mandalay Bay and The Mirage.
About the Company
MGM is headquartered in Las Vegas, Nevada. The company was incorporated in 1986 and employs 52,000 people. MGM operates through three segments: Las Vegas Strip Resorts, Regional Operations, and MGM China.
As a percentage of revenue in 2021, the Las Vegas Strip was 49%, Regional Operations was 35% and MGM China was 12.5%. Management and other operations were 3.5%.
MGM is valued at $13.5 billion and has a Forward PE of 28. The company holds Zacks Style Scores of "B" in Value but "D" in Growth. The stock pays a small dividend of 0.03%.
The company reported EPS on November 2nd, missing expectations by 732%. EPS came in at -$1.39 v the $0.22 expected. Revenues beat, coming it at $342B v the $326B expected. The loss was due to a $1.2B expense due to new Macau gaming laws.
Outside of that charge, the quarter was the company's best in history. Las Vegas Strip RevPar was $210 vs $148 last year. Occupancy was up to 93% v the 82% last year. However, China Net revenues were down to $87M v the $289M last year.
While the company is optimistic about operations like BetMGM and strong domestic bookings into 2023, analysts are dropping their estimates.
Over the last 60 days, current quarter estimates have fallen from $0.20 to a negative $1.31. While they have ticked higher for next quarter, the current year has been lowered as well. Over the last 60 days, we see a 70% drop for that time frame, falling from $4.51 to $1.29.
While these numbers have a lot to do with the Macau expense, next year is falling as well. Analysts have lowered their estimates from $0.70 to $0.24 over the last 60 days, but we have seen an uptick over the last 30 days from $0.04 to $0.24.
The stock is still trading above the 200-day moving average, but a break below that $35 level might cause some selling. While the stock has fallen 20% on the year, it has traded sideways since August.
Investors should be cautious under $35 and seek value in the low $30s. A move above $39 and the bulls take back control of the stock.
MGM has a great core business, but complications in Macau gaming laws are hitting their numbers. Additionally, China's zero-COVID policies continue to hamper its business.
While the action in Vegas has been strong, margins are starting to look like an issue. If the customer starts to struggle, some of MGM's resorts might as well.
3 Sub-$10 Telecom Stocks Wall Street Analysts Recommend
As the curtains roll down on an action-packed 2022, the world eagerly awaits a new year that will likely tame the rising inflationary pressure and mitigate recessionary fears. The challenging macroeconomic environment and a highly volatile equity market have highlighted the need for low-priced stocks with the potential for a healthy return. One of the safest options to capitalize on such unique money-minting opportunities is to adhere to Wall Street recommendations and follow the experts' advice.
Before we try to replicate this model in the Telecom sector to identify three stocks priced below $10 with solid Zacks Rank and robust average broker rating, let us delve a little deep into the current market dynamics.
Telecom Sector Modalities
With virtual communication largely replacing in-person exchanges due to increasing work-from-home options, telecom firms have stepped in to fill the void and aided countless people with large-scale 5G deployments to stay digitally connected. The fifth generation of cellular technology, or 5G, has accentuated the need for high-speed, high-bandwidth and low-latency connections for digital sustainability.
5G has fast-tracked the wide proliferation of video and other bandwidth-intensive applications with a data transmission rate of about 10-100 times faster than the existing 4G networks. Billed as the technology of the future with faster download speed and low latency, 5G is touted as the primary catalyst for next-generation IoT services. These include connected cars, augmented reality, virtual reality platforms, smart cities and connected devices that are likely to revolutionize key industry verticals.
As the 5G ecosystem evolves with increased deployment across the globe, it is likely to offer a plethora of opportunities for diverse industries to spearhead innovation and redefine our daily lives. Riding on such growth drivers, various telecommunication firms are poised to benefit in 2023 and beyond. Below is a list of three such low-priced stocks in random order.
3 Low-Priced Telecom Stocks to Watch
Airgain, Inc.: Headquartered in San Diego, CA, Airgain offers integrated wireless solutions in the form of antenna products. These products are equipped to solve critical connectivity needs in both the design process and the operating environment across the enterprise, automotive and consumer markets. Ideal for original equipment and design manufacturers, vertical markets, chipset vendors, service providers, value-added resellers and software developers worldwide, the customizable antennas serve both indoor and outdoor connectivity issues.
Airgain has a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It has a long-term earnings growth expectation of 35% and delivered an earnings surprise of 86.4%, on average, in the trailing four quarters. It has a VGM Score of A. Currently trading at $6.56, it has an average brokerage recommendation (ABR) of 1.80 on a scale of 1 to 5 (Strong Buy to Strong Sell). ABR is the calculated average of actual recommendations made by brokerage firms and portends the future potential of the stock. Earnings estimates for Airgain for the current year have moved up 163.2% since December 2021.
Kaleyra, Inc.: Headquartered in Milan, Italy, Kaleyra offers mobile communication services to financial institutions, e-commerce players, OTTs, software firms, logistic enablers, healthcare providers, retailers and other large organizations worldwide. Through its proprietary platform and robust APIs, it manages multi-channel integrated communication services, consisting of messaging, rich messaging and instant messaging, video, push notifications, e-mail, voice services and chatbots across more than 190 countries, including all tier-1 U.S. carriers.
This Zacks Rank #2 stock has a VGM Score of A. Currently trading at 85 cents, it has an ABR of 1.50 on a scale of 1 to 5. Over the years, Kaleyra has emerged as a trusted global CPaaS provider, offering multi-channel integrated business communication solutions. The company is well-positioned to tap the huge potential in underpenetrated markets. Earnings estimates for Kaleyra for the current year have moved up 18.9% since August 2021.
TESSCO Technologies Inc., sporting a Zacks Rank #1, delivered an earnings surprise of 126.1%, on average, in the trailing four quarters. Earnings estimates for TESSCO for the current year have moved up 44.3% since December 2021.
TESSCO offers products to the industry's top manufacturers in mobile communications, Wi-Fi, wireless backhaul and related products. With more than three decades of experience, it delivers complete end-to-end solutions to the wireless industry. Currently trading at $4.75, it has an ABR of 1.00 on a scale of 1 to 5. TESSCO boasts multiple growth drivers over the next several years with the accelerated deployment of 5G and the increasing prevalence of the IoT.
Why Haven't You Looked at Zacks' Top Stocks?
Our 5 best-performing strategies have blown away the S&P's impressive +28.8% gain in 2021. Amazingly, they soared +40.3%, +48.2%, +67.6%, +94.4%, and +95.3%. Today you can access their live picks without cost or obligation.
See Stocks Free >>
Zacks Investment Research
800-767-3771 ext. 9339
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report