For Immediate Release
Chicago, IL – March 27, 2014– Zacks Equity Research highlights Kraton Performance Polymers (KRA-Free Report) as the Bull of the Day and XO Group (XOXO-Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Baidu (BIDU-Free Report), Google (GOOG-Free Report) and Qihoo 360 (QIHU-Free Report).
Here is a synopsis of all five stocks:
Bull of the Day:
After reporting 6 earnings misses in the span of 7 quarters in 2012 and 2013, Kraton Performance Polymers (KRA-Free Report) has delivered 2 straight earnings beats. This has prompted a significant turnaround in earnings momentum, sending the stock to a Zacks Rank #1 (Strong Buy).
The valuation picture looks attractive too with shares trading below their peers on almost every relative valuation multiple. This, combined with strong earnings momentum, could propel shares significantly higher over the next few months.
Kraton Performance Polymers produces styrenic block copolymers ('SBCs') and other engineered polymers and markets its products under the Kraton, Cariflex, and NEXARTM brands.
Its products are found in many everyday applications, including personal care products such as disposable diapers and the rubberized grips of toothbrushes, razor blades and power tools, as well as in adhesives, sealants and coatings and paving and roofing products. The company also produces Cariflex isoprene rubber and isoprene rubber latex, which are used as substitutes for natural rubber and natural rubber latex in products like surgical gloves and condoms.
The majority of its revenue comes from overseas.
Kraton reported better-than-expected Q4 results on February 26. Adjusted earnings per share came in at 8 cents, beating the Zacks Consensus Estimate calling for a loss of 15 cents. It was also a significant increase from the 22 cent loss it reported in the same quarter last year.
Bear of the Day:
XO Group (XOXO-Free Report) delivered disappointing fourth quarter results on March 13. Since then, analysts have revised their estimates for both 2014 and 2015 significantly lower, sending the stock to a Zacks Rank #5 (Strong Sell).
Shares of XO Group have sold off considerably since the Q4 report, but the stock still does not look like at a value at 45x forward earnings. Investors should consider avoiding the stock until its earnings momentum turns around.
XO Group owns websites focused on weddings, pregnancy, and everything in between. Its portfolio includes The Knot, The Nest, The Bump, and Ijie.com.
XO Group reported its fourth quarter results on March 13. Adjusted earnings per share came in at a loss of 3 cents, which was well below the Zacks Consensus Estimate calling for earnings of 11 cents per share.
Baidu Down 13.3% YTD – Time to Buy?
Baidu (BIDU-Free Report) is well-known as the Google (GOOG-Free Report) of China given its 73% share of combined mobile and PC search traffic (according to research firm Analysys International). So why are prices declining?
While Baidu most certainly gained from Google’s exit from China, several home-grown players are now proliferating, the most significant of which is currently Qihoo 360 (QIHU-Free Report). Qihoo entered the search market by leveraging its security user base of more than 450 million.
The company was already offering its Internet security products for free and generating revenue through advertisements. Its search engine So.com followed the same model and so was immediately successful, pushing it to the number two spot. Qihoo is particularly strong on the mobile platform, where it has a number of popular products.
Baidu is the market leader by far and the company is now focusing on the mobile segment, because this area is likely to see much stronger growth. The company has built products targeting three specific areas in mobile search, app distribution and location-based services. Management stated that at the end of the last-reported quarter, it had leadership positions in all three.
On the flip side, the company saw SG&A expenses increase 107% in 2013, driven primarily by the promotion of its mobile products. And investment for growth does not end here -- it is expected to remain particularly strong through 2014. Although sales will increase this year, management intends to plough back all additional profits into promotion in order to capture further market share in mobile.
Get today’s Zacks #1 Stock of the Day with your free subscription to Profit from the Pros newsletter:
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 the Analyst Blog
Updated throughout every trading day, the Analyst Blog provides analysis from Zacks Equity Research about the latest news and events impacting stocks and the financial markets.
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.
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Click here to subscribe to this free newsletter today.
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros.
Get the full Report on KRA - FREE
Get the full Report on XOXO - FREE
Get the full Report on BIDU - FREE
Get the full Report on GOOG - FREE
Get the full Report on QIHU - FREE
Follow us on Twitter: https://twitter.com/zacksresearch
Join us on Facebook: https://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
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 http://www.zacks.com/performance for information about the performance numbers displayed in this press release.