The Zacks Analyst Blog Highlights: Pandora, Apple, Google, Sirius XM and Markel
For Immediate Release
Chicago, IL – November 11, 2013 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Pandora (P-Free Report), Apple (AAPL-Free Report), Google (GOOG-Free Report), Sirius XM (SIRI-Free Report) and Markel Corp. (MKL-Free Report).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Friday’s Analyst Blog:
Pandora’s Listener Hours Go Up
Despite significant competition, Pandora (P-Free Report) continued to solidify its position in the U.S. web-based radio market in October. Pandora recently announced that listening hours jumped 18.0% from the year-ago month to 1.47 billion in Oct 2013.
Additionally, Pandora’s share of the total U.S. radio listening market surged to 8.10% compared to 6.60% in the year-ago month and 7.8% in Sep, 2013.
We believe that the rise in listening hours may have resulted from Pandora’s change of policy related to listening limits. In September, the company cancelled the listening limits (40 hours per month) that it had imposed on free users. As a result, listening hours nearly matched the 1.49 billion listener hours it had reported in March, prior to the setting up of the ban. Listening hours also improved from 1.36 billion reported in September.
Pandora exited the month with almost 70.9 million active listeners, in comparison to 59.2 million listeners a year ago. However, the number of active listeners declined over the month from 72.7 million in Sep, 2013.
We believe that the slowdown resulted from the recent launch of Apple’s (AAPL-Free Report) iRadio service. As more and more people try iTunes Radio, we believe that Pandora will lose some market share going forward.
However, we note that Pandora enjoys a first mover advantage in the music streaming industry. We believe that Pandora’s already popular service, driven by its effective discovery engine and well established infrastructure places it well to compete against the likes of Apple, Spotify, Google (GOOG-Free Report) and Sirius XM (SIRI-Free Report).
Additionally, Pandora had raised some $400.0 million from stock offering in September. The company expects to use a portion of the proceeds for international expansion. The company will also open new sales offices and compete with radio stations for attracting local advertising, which is a significant opportunity going forward.
Nevertheless, we believe that rising costs related to licensing and intense competition are the major headwinds in the near term.
Currently, Pandora has a Zacks Rank #3 (Hold).
Strong Buy on Markel Corp.
On Nov 7, Zacks Investment Research upgraded Markel Corp. (MKL-Free Report) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Markel has been experiencing rising earnings estimates on the back of improved core fundamentals in third-quarter 2013. Moreover, the company’s strong underwriting capabilities as well as improved coverage ratios have been impressive.
Additionally, this property-casualty insurer delivered positive earnings surprises in all of the last 4 quarters with an average beat of 92.4%. Markel also outperformed the year-to-date S&P 500, which posted an increase of 22.5% against the modest return of 23.4% clocked by the company.
On Nov 6, Markel reported third-quarter 2013 operating earnings of $4.68 per share, which missed the Zacks Consensus Estimate of $6.55 but exceeded the year-ago quarter number of $3.55 per share.
Although higher operating, tax and underwriting expenses marred the bottom line, the top line surged 55.6% over the prior-year quarter, driven by higher earned premiums, net investment income and other revenues. Consequently, combined ratio improved to 96% from 101% in the year-ago quarter. Even book value per share increased 14% at 2012-end.
Markel’s strategy of growth through acquisitions has been scoring well with the ratings agencies. Despite the latest acquisition of Alterra Capital Holdings Ltd. (:ALTE), in May 2013, Markel’s debt to capital ratio improved to 26% at Sep 2013-end from 28% at the end of 2012. Overall, the acquisition along with enhanced operating leverage and sturdy balance sheet of the company continue to boost investors’ confidence in the stock.
Based on Markel’s capital strength and underwriting discipline, the Zacks Consensus Estimate for 2013 rose 0.8% to $23.38 per share in the last 30 days. The estimate for 2014 is pegged at $25.85, up two pennies in the last 30 days. Meanwhile, no downward revision in estimates was witnessed for both the years.
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
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