For Immediate Release
Chicago, IL – November 1, 2013 – Zacks Equity Research highlights McKesson ( MCK- Free Report) as the Bull of the Day and QlikTech ( QLIK- Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on the Morgan Stanley ( MS- Free Report), Mitsubishi UFJ Financial Group, Inc. ( MTU- Free Report) and Bank of America ( BAC- Free Report).
Here is a synopsis of all five stocks:
Bull of the Day:
McKesson ( MCK- Free Report) recently delivered the coveted "triple play" in its latest earnings report:
- A positive earnings surprise
- A positive revenue surprise, and
- Increased guidance from management
This prompted analysts to revise their estimates significantly higher for both 2014 and 2015, sending the stock to a Zacks Rank #1 (Strong Buy).
McKesson Corporation is primarily a distributor and wholesaler of pharmaceutical products. The company distributes pharmaceuticals, health care supplies and consumer health products in North America.
McKesson reported better-than-expected results for the second quarter of its fiscal 2014 on October 24. Adjusted earnings per share came in at $2.27, well ahead of the Zacks Consensus Estimate of $2.03. It was a 19% increase over the same quarter last year.
Revenue rose 11% year-over-year to $32.954 billion, beating the consensus of $32.371 billion. Its largest segment, Distribution Solutions, saw revenues climb 11%, driven mainly by strong growth in U.S. pharmaceutical direct distribution and services revenues due to market growth, business mix and one additional sales day.
Income from continuing operating rose 20% year-over-year as the operating margin expanded from 1.5% to 2.4%.
Bear of the Day:
QlikTech ( QLIK- Free Report) delivered disappointing third quarter results on October 24. The company missed on both the top and bottom lines, prompting a flurry of negative estimate revisions from analysts.
It is currently a Zacks Rank #5 (Strong Sell).
While shares of QlikTech have taken a beating since the Q3 report, the stock still doesn't look cheap given the big drop in consensus estimates. Investors should wait for earnings momentum to turn around before jumping in.
QlikTech develops and sells the QlikView Business Discovery platform, or QlikView. This software is used for business intelligence (:BI) and data analysis.
QlikTech reported disappointing third quarter results on October 24. Adjusted EPS (which includes stock-based compensation) came in at a loss of 5 cents, below the Zacks Consensus Estimate calling for a loss of 2 cents.
Total revenue rose 21% to $104.1 million, but this was well below the consensus of $108.0 million. The company experienced solid growth in the Americas, but sales were weaker than expected in Europe and Asia Pacific.
Stock-based compensation expense rose 56% year-over-year to $8.6 million. If you exclude this, EPS actually came in ahead of consensus, but this was due in part to a large tax benefit.
Morgan Stanley to Buy Stake in Mitsubishi
According to Bloomberg, Morgan Stanley ( MS- Free Report) is set to acquire a 30% stake in Mitsubishi UFJ Financial Group, Inc. ( MTU- Free Report) wealth-management business in Japan. The deal will expectedly be complete early next year.
On closure of the deal, Mitsubishi UFJ will continue to run the business, while Morgan Stanley will be able to offer a wide range of research and investment products to the Japanese clientele. Mitsubishi’s wealth-management unit in Japan caters to wealthy clients and is an attractive acquisition for Morgan Stanley.
With Asia emerging as a lucrative business market for foreign companies, Morgan Stanley is keen to tap the growth opportunities of the Japanese economy. Earlier, in 2010, Morgan Stanley and Mitsubishi had set up two investment-banking ventures in Japan.
Mitsubishi’s wealth-management business was previously a joint venture (:JV) between Mitsubishi UFJ and Bank of America’s ( BAC- Free Report) Merrill Lynch brokerage unit. However, in Dec 2012, Mitsubishi purchased the remaining 49% stake in the JV.
The latest deal by Morgan Stanley strengthens its ties with Mitsubishi. Mitsubishi UFJ, which presently owns about 22% stake in Morgan Stanley, had invested $9 billion in the U.S. bank at the time of the 2008 economic crisis.
In the backdrop of a tepid economic recovery in the U.S coupled with stringent regulations and the Eurozone crisis, Asia has been attracting corporate companies. Fast growth, increased inflow of funds and investment in infrastructure to drive growth in the emerging economies of Asia favorably position these markets.
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