For Immediate Release
Chicago, IL – August 12, 2014 – Zacks Equity Research highlights Universal Display Corp (OLED-Free Report) as the Bull of the Day and AGCO Corp (AGCO-Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Intel (INTC-Free Report), Apple (AAPL-Free Report) and Google (GOOGL-Free Report).
Here is a synopsis of all five stocks:
Bull of the Day:
Universal Display Corp (OLED-Free Report) has beaten the Zacks Consensus Estimate in four of its last five earnings reports and recently reported strong guidance. Today, OLED is a Zacks Rank #2 (Buy), and it is the Bull of the Day.
Why a Zacks Rank #2 (Buy)
The Bull of the Day is not an article that is designed to show a stock that is going up the most on any one given day. It is about showing how the Zacks Rank works and the positive attributes that the highly ranked stocks have.
Normally we write about Zacks Rank #1 (Strong Buy) stocks for the Bull of the day, but I wanted to highlight a stock that I think has a number of positive catalysts that could drive the stock price higher.
Universal Display Corporation is a leader in the research, development and commercialization of organic light emitting diode, or OLED, technologies and materials. OLEDs are thin, lightweight and power-efficient solid-state devices that emit light, making them highly suitable for use in full-color displays and as lighting products. OLED displays are capturing a growing share of the flat panel display market.
Most Recent Quarter
OLED reported a strong 2Q14 beating the Zacks Consensus Estimate by $0.04 in posting a 10% positive earnings surprise. The company reported revenues of $64M when the street was calling for $62M in the quarter. The $2M top line beat translated into a 3.3% revenue surprise.
Tight In The Shorts?
I took a look at the short interest in this stock and was surprised to see at a great short squeeze candidate. On 5/30 the absolute number of shares sold short was at a high point over the last twelve months. 9.2M shares had been sold short as of that date, and with 680K shares in daily volume that meant the shorts needed 13.5 days to cover.
On 6/13 the reported number of shares sold short ticked down by 50K, but days to cover ballooned to 15.5.
The most recent data is from 7/15 and it shows there are 8.5M shares sold short with days to cover standing at a brisk 13.6. This implies that a even a small move up in the stock could produce a pretty large short squeeze.
Bear of the Day:
AGCO Corp (AGCO-Free Report) may have beaten the Zacks Consensus Estimate in each of the last three quarters, but estimates have moved lower recently. AGCO a Zacks Rank #5 (Strong Sell), and it is the Bear of the Day.
AGCO Corporation manufactures and distributes agricultural equipment and related replacement parts worldwide. It offers tractors and combines. AGCO Corporation was founded in 1990 and is headquartered in Duluth, Georgia.
The company guided lower on July 29 as they expected sales to be between $10.1B -$10.3B compared to the $10.34B estimate. At that time the company also noted that EPS for FY14 would be $5.00.
Recent Earnings Reports
The most recent report saw AGCO come in ahead of the Zacks Consensus Estimate. The company reported $1.77 vs. the $1.68 estimate fro a beat of $0.09 or 5.4% positive earnings surprise. The guidance, however, disappointed Wall Street and the stock sold off by 5.2% in the session following the release.
Technology Stock Roundup
A fake PR creates temporary tension at Intel (INTC-Free Report) as Xiaomi takes the lead in China and Google’s smartphone strategy takes shape.
Fake PR Says Intel to Close Israel Operations
A press release purported to have come from Intel’s PR department said that Intel had decided to abandon/delay its Israel operations (in which it has invested $6 billion) because of the ongoing conflict with Gaza. Intel has since assured that both the release and claims weren’t authentic, but someone seems to have gone to a lot of trouble to set up a false website and have a person “with an American accent” answering the PR contact number enlisted on the release.
Business Insider said that the person confirmed Intel’s plans to close/postpone operations in Israel and WSJ reported that the said person who identified himself as Nick Veritas later agreed that the whole thing was a hoax intended to prove disconnect between what companies said and did “regarding corporate responsibility and human rights.”
China Answers Samsung, Apple
As the smartphone war heats up in China, local players are sprouting up all over. But heading the list is Xiaomi, which initially made strides copying Apple (AAPL-Free Report). But it’s now a serious contender, with its 15 million Q2 units and strong growth rates giving it a leading 14% share of the Chinese smartphone market. Xiaomi uses a forked version of Android and also sells a few phones based on an internally developed OS. Strategy Analytics says that Xiaomi has jumped to the fifth largest global vendor on the basis of its growth in China and preliminary success in India.
Samsung has plenty to worry about: a separate report indicated that it also dropped to number two in India where local player Micromax took over the leading position. Apple continues to do well in the premium segment.
Google Cornering the Smartphone Market
There have been a few rumors that Google (GOOGL-Free Report) is retiring its Nexus Line in favor of Android Silver, where it will retain more control over the OS, ensure faster updates and attract premium pricing. However, reports in the media have also said that these plans were shelved.
But Nexus may have already served its purpose because of the Google Play versions that have actually caught on very well. Contrary to what may have been believed, the closed OS (that was developed by the Open Handset Alliance, or OHA) is doing better than the open one (Android Open Source Project, or AOSA), according to a new report from ABI Research.
OHA now has a global market share of 65% compared to AOSA’s 20%. The latter is however growing faster because of rapid adoption in Asia. For all practical purposes, Google is providing an entry-level OS and enabling migration to a more advanced one.
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