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Statoil ASA, Signet Jewelers, TD Ameritrade Holding and E*TRADE Financial highlighted as Zacks Bull and Bear of the Day

Zacks Equity Research
Analyzing a company's cash position can be far more rewarding because this reveals its true financial health.

For Immediate Release

Chicago, IL – Jan 05, 2018 – Zacks Equity Research highlights Statoil ASA STO as the Bull of the Day, Signet Jewelers SIG as the Bear of the Day. In addition, Zacks Equity Research provides analysis on TD Ameritrade Holding Corporation AMTD and E*TRADE Financial Corporation ETFC.

Here is a synopsis of all four stocks:

Bull of the Day:

Commodity prices have been on the move in recent weeks. Part of that move can be attributed to a weakening US dollar but another big chunk of that is chalked up to increased global demand. With the world economy humming along on all cylinders, demand for energy is on the move. Not only has crude oil been on the move, but other energy prices have been increasing as well. The cold start to winter has natural gas on the move and that’s good news for producers like today’s Bull of the Day.

Statoil ASAis a Zacks Rank #1 (Strong Buy) in an industry which ranks in the Top 8% of our Zacks Industry Rank. Statoil ASA, an energy company, explores for, produces, transports, refines, and markets petroleum and petroleum-derived products, and other forms of energy in Norway and internationally. The company operates through Development and Production Norway; Development and Production International; Marketing, Midstream and Processing; and Other segments.

The company also transports, processes, manufactures, markets, and trades oil and gas commodities, such as crude, condensate, gas liquids, products, natural gas, and liquefied natural gas (LNG); markets and trades electricity and emission rights; and operates refineries, gas processing plants, LNG plant, methanol plant, and crude oil terminals. In addition, the company develops offshore wind, and carbon capture and storage projects, as well as offers other renewable energy and low-carbon energy solutions. 

A series of bullish earnings estimate revisions is the reason for the favorable rank. Over the last sixty days, 2 analysts have increased their estimates for the current year, while two have also done so for next year. The moves have had a very bullish effect on the Zacks Consensus Estimates for those periods. The current year consensus number has jumped up from $1.07 to $1.28 while next year’s number has gone from 87 cents all the way to $1.22.

Bear of the Day:

It’s tough being bearish on anything in this market. After the tax cut hit the news wire, a rash of upgrades has hit the market. That’s especially great for the small cap stocks out there. Anything domestically inclined is really rocking and rolling right now. However, there are a few areas of the stock market that are still under pressure. One of those areas is retail. There’s still a huge struggle out there for retailers fighting for their life with tons of pressure coming from online giants like Amazon.

Today’s Bear of the Day is unique as it is a retail name but because it’s in the jewelry business it faces different risks. I’m talking about Signet Jewelers.Signet Jewelers Limited engages in the retail sale of diamond jewelry, watches, and other products in the United States, Canada, Puerto Rico, the United Kingdom, the Republic of Ireland, and the Channel Islands. Its Sterling Jewelers division operates stores in malls and off-mall locations primarily under the Kay Jewelers, Kay Jewelers Outlet, Jared The Galleria of Jewelry, Jared Vault, and various mall-based regional brands. 

Analysts soured on the stock about sixty days ago after its last earnings report. Three analysts dropped their earnings estimates for the current quarter and next year. The drop in estimates took down the Zacks Consensus Estimate for the current quarter from $4.50 to $3.95. The current year number dipped from $7.08 to $6.27. The most dramatic move occurred in next year’s estimates where the consensus has come from $7.43 all the way down to $6.48.

Additional Content:

TD Ameritrade or E*TRADE: Which Stock Is Better?

TD Ameritrade Holding Corporationand E*TRADE Financial Corporation — the two investment brokers — have market capitalization of $28.9 billion and $13 billion, respectively. Being based in the same region, both companies are influenced by a similar economic environment.

The Zacks Industry Rank is #38 (top 14% of the 250 plus Zacks industries) for the industry, to which these companies belong to. Our back-testing shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than two to one.

Benefits from a stabilizing economy and the gradually improving interest-rate scenario have positioned the industry well. In terms of price performance, TD Ameritrade’s shares have gained 12.5% in the past year, while E*TRADE’s shares have rallied 37.9%.

Though both investment brokers have similar business trends, deeper research into the financials will help decide which investment option is better.

TD Ameritrade

TD Ameritrade has a trailing 12-month ROE of 15.91% compared with the industry average of 9.78%. This shows the company reinvests its earnings more efficiently.

Moreover, the company’s earnings for fiscal 2018 are projected to be up 26.6%, while sales are likely to rise 32.9%. Further, the dividend yield of the company is 1.63%.

Analysts seem optimistic about the stock’s earnings prospects. Over the last 60 days, TD Ameritrade has witnessed three upward revisions (against no downward revisions) for fiscal 2018. The Zacks Consensus Estimate has inched up 1.7% to $2.33 for 2018.

TD Ameritrade has a VGM Score of B. Further, the stock carries a Zacks Rank #2 (Buy). Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best upside potential.

E*TRADE

E*TRADE has a trailing 12-month Return on Equity (ROE) of 9.34% compared with the industry average of 9.78%. This shows the company is less efficient in reinvesting its earnings.

In addition, the company’s 2017 and 2018 earnings are projected to rise 22.4% and 15.7%, respectively, while sales are estimated to be up 50.6% and 9.92%, respectively.

Notably, the company does not pay any dividends at the current level.

Nevertheless, analysts seem optimistic about the stock’s financial performance. For 2017, it witnessed two upward revisions (against no downward revision) over the past two months. As a result, the Zacks Consensus Estimate for 2017 has inched up to $2.27.

E*TRADE currently carries a Zacks Rank #2. Also, it has a VGM Score of F. You can see the complete list of today’s Zacks #1 Rank stocks here.

Our Take

Both TD Ameritrade and E*TRADE are well positioned in terms of ROE, Zacks Rank as well as earnings and sales growth potential. However, VGM Score, a favorable dividend yield, along with more reinvestment potential, make TD Ameritrade a better pick.

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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 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.

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E*TRADE Financial Corporation (ETFC) : Free Stock Analysis Report
 
TD Ameritrade Holding Corporation (AMTD) : Free Stock Analysis Report
 
Statoil ASA (STO) : Free Stock Analysis Report
 
Signet Jewelers Limited (SIG) : Free Stock Analysis Report
 
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