For Immediate Release
Chicago, IL – August 07, 2014– Zacks Equity Research highlights Take Two Interactive (TTWO-Free Report) as the Bull of the Day and Loews Corp (L-Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Amgen (AMGN-Free Report), Vertex (VRTX-Free Report) and Regeneron (REGN-Free Report).
Here is a synopsis of all five stocks:
Bull of the Day:
For the better part of the last 14 years I’ve been a market nerd. It totally and completely consumes me. I fall asleep to the Nikkei 225 Futures on a laptop beside my bed. I wake up to check the S&P 500 e-mini’s. My entire day is spent watching stocks across various industries ebb and flow with the market. And I just can’t get enough of it.
Another side of my nerd-like tendencies is gaming. As in video gaming. Before I was a typical casual gamer. Over my life I’ve had various gaming consoles ranging from the Sega Master System, to Genesis, to Playstation to my current XBOX 360. It’s on this latest platform that my nerd went nuclear. I went “Turbo Nerd.” I was playing Grand Theft Auto V and the perfect marriage of my nerd sides occurred when I realized the game had a built-in stock market. Stocks would go up and down based on what you did in the game and based on what other players were doing.
A few short weeks later, my GTA V character literally had $2 billion worth of in-game currency. Thanks almost exclusively to the perfect harmony of nerd that was singing through my XBOX controller. Then the stock nerd took over again as I thought to myself, “Who’s the company that makes this game?”
Take Two Interactive (TTWO-Free Report) is the company behind Rockstar and 2K Games that made this masterpiece I was playing. The video game maker owns some of the most popular gaming franchises including BioShock, Borderlands, Grand Theft Auto, NBA 2K, Midnight Club, and Sid Meier’s Civilization. In all, Take Two has 10 franchises that have sold over 5 million units a piece. The crown jewel, the Grand Theft Auto series, has sold over 185 million units including 33 million for the latest installment GTA V. For the record, GTA V reached $1 billion in retail sales faster than any entertainment release in history.
Bear of the Day:
Today’s Bear of the Day is Zacks Rank #5 (Strong Sell) Loews Corp (L-Free Report). I know what you’re thinking, “Dave, what do you have against movie theatres?” No, it’s not that Loews. “Dave, do you work part-time at Home Depot?” No, it’s not that one either. I’m talking about Loews the insurance holding company. No popcorn, no Home Depot dogs.
This Loews owns a variety of companies ranging from CNA property & casualty insurance, to Diamond Offshore to a luxury hotel and resort chain. The company acts as a patient value investor with a long-term philosophy. Loews claims this gives them freedom and patience to invest opportunistically across industries.
Unfortunately as a value investor sometimes the tide of the market goes decidedly against you. Which in the long run you don’t worry about from that perspective but it can make for some rough going in the short to intermediate term. And in the short run it appears like Loews is facing a bit of a headwind.
Two analysts have dropped their earnings estimates for the next year over the last 60 days. This drop in the number has helped bring consensus down from $3.85 to $3.51. Next year’s numbers aren’t the only estimates that have dropped for the company. This quarter analysts are now looking for 74 cents a share versus previous consensus of 79 cents. This helped take down the current year number from $3.08 down to $2.97.
Biotech Stock Roundup
Last week, earnings remained in focus with several companies reporting their second quarter results. While Amgen’s (AMGN-Free Report) results remained impressive, Vertex (VRTX-Free Report) posted a wider loss. Meanwhile, Regeneron (REGN-Free Report) missed earnings expectations by a pretty wide margin though Eylea sales continued to impress.
Among all this, the Ebola outbreak is also making headlines and has brought quite a few biotech companies into the limelight for their experimental Ebola disease treatments.
Recap of the Week’s Most Important Stories
1. Amgen was in the news not just for its impressive second quarter performance but also for its decision to implement a restructuring plan and cut 2,400-2,900 positions (12% - 15% of the total work force). Investors viewed the company’s restructuring plan favorably with shares gaining 5.4% -- the restructuring plan should make the company leaner and more cost-efficient. Amgen also raised its earnings and revenue guidance for 2014. All in all, it was a good earnings report from Amgen (Read more: Amgen Beats on Q2 Earnings & Revs, Ups View & Plans Job Cuts).
2. Vertex reported a wider loss in the second quarter with revenues also lagging expectations. Shares were down on the earnings report. The company maintained its outlook for 2014. Cystic fibrosis treatment, Kalydeco, should benefit from the recent approval of eight additional mutations in the EU – this provides access to 250 eligible patients (Read more: Vertex Pharmaceuticals Posts Wider Q2 Loss, Maintains View).
3. Regeneron’s second quarter earnings missed expectations by a wide margin. Revenues, however, surpassed expectations with eye drug, Eylea, performing well in the quarter. Eylea should see accelerated growth in the second half of the year thanks to the recent FDA approval for diabetic macular edema (:DME). The drug could gain FDA approval for a fourth indication – macular edema following branch retinal vein occlusion – in October. The company is also preparing to file for approval of its PCSK9 inhibitor, alirocumab (Read more: Regeneron Misses on Earnings in Q2, Eylea Drives Sales Beat).
4. The recent Ebola disease outbreak has brought quite a few biotech companies into focus. One of the companies involved in the development of an anti-Ebola virus treatment is Canada-based Tekmira. Although Tekmira’s phase I candidate, TKM-Ebola is currently under clinical hold, hopes are up that an early resolution of the hold could materialize given the urgent need for Ebola virus treatments (Read more: Tekmira Pharma in Focus as the World Awaits Ebola Treatment).
Last week, Regeneron led the major biotechs with its price increasing 9.42% on Eylea’s performance and the earlier-than-expected approval for an additional indication. Amgen’s shares were up 3.71% with investors reacting positively to the company’s results and restructuring plan.
Vertex was the biggest loser, with shares declining 8.96%, followed by Biogen (down 4.83%). Regeneron was the biggest gainer over the last six months as well (up 18.20%). The NASDAQ Biotechnology Index was down 1.21% last week
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