WageWorks, Genomic Health, Barrick Gold, Newmont and AngloGold Ashanti highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – October 03, 2013 – Zacks Equity Research highlights WageWorks (WAGE-Free Report) as the Bull of the Day and Genomic Health (GHDX-Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on the Barrick Gold (ABX-Free Report), Newmont (NEM-Free Report) and AngloGold Ashanti (AU-Free Report).
Here is a synopsis of all five stocks:
Bull of the Day:
Looking for a company that could benefit from the Affordable Care Act? Consider WageWorks (WAGE-Free Report), a $1.7 billion provider of benefits administration for corporations.
WAGE administers and operates an array of "consumer-directed benefit" solutions (CDBs), including spending account management programs, such as health and dependent care flexible spending accounts, health savings accounts, health reimbursement arrangements and commuter benefits, such as transit and parking programs.
While analysts are optimistic about WAGE's prospects in the new healthcare exchange environment, the stock has run pretty far this year to capture that sentiment.
WageWorks has a partnership with one of the most well-known private employee exchanges, Towers Watson. Towers has said its active employee exchange, which has recently been formed, will add two employers with 40,000 employees on January 1, 2014, along with its own employees. We believe it is possible Towers will add several hundred thousand employees in 2015 and many more in subsequent years.
Analysts at William Blair believe "there are many other companies considering private healthcare exchanges and we believe that WageWorks is having conversations with several current and potential industry participants."
Consulting firm Accenture aggressively forecasts that there will be 40 million active employees in healthcare exchanges by 2018, up from 1 million in 2014. WageWorks has about 10% market share in consumer-directed healthcare benefits today with 2.1 million customers.
Bear of the Day:
Genomic Health (GHDX-Free Report) is a life science company focused on the development and commercialization of genomic-based clinical diagnostic tests for cancer that allow physicians and patients to make individualized treatment decisions. It was started in 2000 by CEO Randy Scott, who was then at Incyte Genomics.
Randy's experience with a close friend who was diagnosed with cancer brought him the realization that despite all the research to map and understand the human genome, there was little being done to help patients get the best care based on the molecular make-up of their specific tumor.
Scott set out with the goal of developing high-value diagnostics to enable more personalized cancer treatment decisions driven by the genomic activity within a patient's individual tumor.
In 2004, the company launched its first test, Oncotype DX, which has been shown to predict the likelihood of breast cancer recurrence and chemotherapy benefit in early stage breast cancer patients. The Oncotype DX assay represents the first diagnostic gene expression test on the market that provides consistent results across multiple independent trials having breast cancer patients, including a large validation study of The New England Journal of Medicine.
The reason that Genomic's shares have been hanging out amidst the Zacks #5 Rank stocks (Strong Sell) is that their earnings outlook significantly deteriorated after a Q2 earnings miss at the end of July. On August 1st, the stock dropped to a #5 and has since traded down over 15% from $36 to $30.
Additional content:
Precious Metals Stock Roundup
Treasury Secretary Jack Lew warned that the U.S. will hit the debt ceiling by Oct 17 unless Congress passes a bill to extend the country’s $16.7 trillion borrowing limit. A failure to act by that deadline will see the Treasury run out of cash to pay bills, placing the nation at a risk of sovereign debt default. Shutdown and debt default woes burnished the safe-haven appeal of gold.
Bullion moved south on Thursday as traders considered a cascade of mixed economic reports. Data showed a fall in initial weekly jobless claims to near-six year low (at 305,000). Moreover, Commerce Department figures (third estimate) showed that the U.S. GDP rose at a 2.5% annual rate in the second quarter, in line with the second estimate released in August but lower than 2.6% predicted by economists. Data also showed that pending home sales clipped 1.6% last month, marking a fall for three straight months.
However, a 1.1% gain on Friday helped gold to wrap up the week in the green. Prices got a lift from possibility of a government shutdown coupled with a comment by the President of the Chicago Fed Charles Evans, who said that tapering may not take place until next year.
Gold prices (for December delivery) on the New York Mercantile Exchange’s Comex division crept up 0.5% for the last week to close at $1,339.20 per troy ounce last Friday. Silver, however, finished the week lower with a roughly 0.5% fall to $21.83 per ounce.
Both metals remain in the bear market with prices trending roughly 25% and 38% below their 52-week highs, respectively. Shares of most major mining stocks closed the week in red.
The AMEX Gold Bugs Index moved down 1.2% last week while the Philadelphia Gold and Silver Index and the NYSE Arca Gold Miners Index shed 2.1% and 2.2%, respectively. This compares to a roughly 1.1% loss for the S&P 500.
Stocks in the News
Among key developments last week, Barrick Gold’s (ABX-Free Report) CEO Jamie Sokalsky, at the Denver Gold Forum, hinted that the gold giant is planning to sell additional assets in Australia, in line with its objectives to trim costs and divest mines with shorter life. Moreover, the company is reportedly considering a joint venture with Newmont (NEM-Free Report) in Nevada to explore means to cut costs.
Moreover, Barrick got a respite after the Supreme Court of Chile issued a ruling which upheld the environmental approval for the key Pascua-Lama project in Chile. The ruling requires Barrick to complete the project’s water management system according to its environmental permit to the satisfaction of Chile's environmental regulator.
Newmont is reportedly seeking acquisitions to add low-cost gold or copper output. Its CEO Gary Goldberg, at the Denver Gold Forum, said that the company will look for mines having longer life and lower costs. Moreover, the company is reportedly laying off 56 employees in Nevada amid rising costs and pricing pressure.
South African miner AngloGold Ashanti (AU-Free Report) said that its Kibali gold mine in the Democratic Republic of Congo has produced its first gold ahead of schedule and within budget.
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