For Immediate Release
Chicago, IL – February 13, 2018 – Zacks Equity Research SkyWest SKYW as the Bull of the Day, AZZ Inc AZZ as the Bear of the Day. In addition, Zacks Equity Research provides analysis on AT&T Inc. T, Windstream Holdings, Inc. WIN and Verizon Communications Inc. VZ.
Here is a synopsis of all five stocks:
Bull of the Day:
Top stocks are often found in top industries. An easy way to find these winners is by leaning on not only the Zacks Rank, but the Zack Industry Rank. Zacks divides the market into 255 industries, then ranks them among each other in terms of the strongest earnings trends. Industries seeing lots of positive activity in earnings estimates will be near the top of the pack. Then, you can dig into each industry to find the Zacks Rank #1 (Strong Buy) stocks which are leading the way.
One such strong stock in a strong industry is today’s Bull of the Day, SkyWest. SkyWest is in the Airlines industry which ranks in the Top 4% of our Zacks Industry Rank. SkyWest, Inc., through its subsidiaries, operates a regional airline in the United States. As of December 31, 2017, it provided scheduled passenger and air freight services with approximately 2,980 total daily departures to various destinations in the United States, Canada, Mexico, and the Caribbean; and had a fleet of 595 aircraft available for scheduled service. The company operates its flights as Delta Connection, United Express, American Eagle, or Alaska under code-share arrangements.
Analysts have been increasing their earnings estimates for SkyWest recently. Over the last sixty days, four analysts have increased their estimates for the current year while two analysts have pushed up next year’s number. The bullish sentiment has increased our Zacks Consensus Estimate from $5.49 to $5.78 for the current year. Next year’s number has shot up from $5.73 to $6.11.
The company is coming off yet another earnings beat with EPS coming in at $1.28, well above expectations calling for $1.09. The last time the company failed to meet earnings expectations was back in August 2014. What helped fuel their rise higher this year was a series of upgrades to their fleet. Over the last year, the company added 44 planes, creating a more efficient fleet while retiring some older planes.
This Zacks Rank #1 (Strong Buy) is coming off a very strong quarter where it beat expectations. Currently, it’s hovering right at the 200-day moving average. A breakout above this level would put new 52-week highs on the radar.
Bear of the Day:
The best stocks are often found in the strongest industries. One way to measure the strength of an industry is to check out where it hits on the Zacks Industry Rank. Our Zacks Industry Rank breaks down the market into 255 different industries and compares them with one another. Industries made up of stocks with the strongest earnings trends rise to the top. On the flipside, those in industries experiencing shrinking earnings estimates will find themselves near the bottom of the pack. Today’s Bear of the Day is in one of those industries near the bottom of our Zacks Industry Rank.
Today’s Bear of the Day is Zacks Rank #5 (Strong Sell) AZZ Inc.AZZ Inc. provides galvanizing and metal coating services, welding solutions, specialty electrical equipment, and highly engineered services to the power generation, transmission, distribution, refining, and industrial markets. The company operates through two segments, Energy Segment and Metal Coatings. As of February 28, 2018, the company operated 45 metal coating plants located in various locations in the United States and Canada. That means AZZ is in the Manufacturing – Electronics Industry which ranks in the Bottom 28% of our Zacks Industry Rank.
The reason for the unfavorable Zacks Rank #5 (Strong Sell) lies in the series of earnings estimate revisions to the downside recently. Over the last thirty days, analysts have cut their expectations for the current quarter, next quarter, current year and next year. The bearish sentiment has dropped the Zacks Consensus Estimate for the current year from $2.20 to $2.03 while next year’s number has been slashed from $3.05 to $2.52.
A.I. Investment Gains Prominence: 3 Telecoms in Focus
With the telecom industry on the cusp of 5G boom, President Trump has renewed an investment pledge to prioritize research and development efforts in Artificial Intelligence (AI) — a key differentiator to analyze huge data troves to get meaningful information. The strategic move follows similar such initiatives by other countries such as China to bridge the digital divide with the United States in this field.
Trump has signed an executive order in this regard to maintain the competitive edge of the country. Dubbed the American AI Initiative, the plan involves significant investments to seek the application of AI technology in diverse fields ranging from wars to health care. It also aims to make government data and computing resources widely available to AI experts for possible data mining activities for the overall benefit of the industry.
AI: A Key Differentiator
With the wide proliferation of smartphones and exponential growth in demand for data traffic, telecom operators have to deal with a huge pool of heterogeneous data originating from various web and mobile applications that traces geolocation, consumer profile data, call detail record, service usage and billing data. The burgeoning customer digital footprint leaves behind a huge data trail, which is time consuming and seemingly impossible to analyze by humans for data collation. This is where AI techniques come into play. Telecom enterprises are increasingly deploying these tools to predict and analyze consumer behavior on real-time basis, which can then be tapped by marketing agencies and retailers to fast-track their sales.
AI facilitates telecom enterprises to dig deeper into the customer realm and predict the propensity of customers to buy products through holistic profiling. It helps to get a cognitive insight into customer behavior, thus helping to better connect with them and customize an offering for higher probability of acceptance. At the same time, data monetization and data mining techniques by leveraging subscribers’ data could help unearth new revenue opportunities for the company. In addition, AI enables telecom operators to deploy intelligent networks using tools that automate back-end processes to lower costs and deploy additional human capital for other value-added analytical work.
The Money Trail: What Stokes Investments?
In addition to classification of traffic, anomaly detection and network optimization and utilization, AI along with Machine Learning (ML) techniques conflate to form the basis of numerous intelligent technologies that have redefined our daily lives. A few of these developments that affect the usage of telecom networks substantially are:
• Smart Homes: AI has given shape to the concept of Smart Homes that help remote monitoring and management of Internet-connected appliances and systems, such as lighting and heating. This provides homeowners security, comfort, convenience and energy efficiency by allowing them to control smart devices through a smartphone app or other networked device.
• Self-Driving Cars: The growing autonomous vehicle fleet is a testament to the fact that driverless vehicles are getting closer to being a common feature on public roads. This requires seamless data connectivity and AI to control vehicle speed according to road traffic and sensitive areas to prevent any road casualties.
• Smart Cities: Improving the quality of life for residents of the city, reducing environmental impact and increasing operational efficiency are three prime factors that have led to the evolution of Smart Cities. The essence of a Smart City is connectivity, where embedded telecom infrastructure works as a mesh in which data flows seamlessly and enables tasks with the least human intervention in the smartest possible way.
Telecom Stocks in the Limelight
AT&TInc.: This Zacks Rank #3 (Hold) stock is focusing on AI and ML techniques to automate operations such as common call center procedures, and to analyze and correct network outages. AT&T is using AI to help make the global network more secure, self-healing and self-resilient. The company is also utilizing AI tools to improve traffic flow and manage the rapid growth of video traffic on mobile networks as it moves toward 5G technology.
Windstream Holdings, Inc.: Since Windstream embraced SD-WAN (software-defined wide-area network), it has been able to dovetail into AI. This Zacks Ranks #3 stock has utilized SD-WAN Concierge to enable customers set their own routing policies, based on what SLAs (service level agreements) are more important to their unique business needs. The company is providing customers unprecedented network visibility and control, such as identifying which applications are using the most bandwidth, and prioritizing how that needs to change in order to meet business and customer experience objectives.
Verizon Communications Inc.: Verizon is reportedly using its predictive analytics and ML algorithms to monitor 3GB of data every second streaming from millions of network interfaces — from customers’ routers to an array of sensors gathering operational data. The strategy has been designed to be customer-focused from the ground up in order to reduce customer dissatisfaction and ensure prompt service. On its home networks, Verizon runs automated testing on a sample of 60,000 in-home routers every two hours in order to ensure optimum speed of data connectivity. The strategy is increasingly important for the company as it moves toward the goal of deploying mobile 5G networks across the country. Verizon currently has a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Although the American AI Initiative lacks clarity regarding the funding details and the quantum of investment, it has set the ball rolling for continued thrusts and focus on R&D efforts to thwart competition. It remains to be seen whether such concerted efforts by the Trump administration trickle down to the bottom rung of the industry for its overall development.
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SkyWest, Inc. (SKYW) : Free Stock Analysis Report
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