For Immediate Release
Chicago, IL – July 10, 2012 – Zacks Equity Research highlights Amerisafe, Inc. (AMSF) as the Bull of the Day and Companhia de Bebidas Das Americas (ABV) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Research In Motion Ltd. (RIMM), Apple Inc. (AAPL) and Google Inc. (GOOG).
Full analysis of all these stocks is available at http://at.zacks.com/?id=2678.
Here is a synopsis of all five stocks:
We are upgrading our recommendation on Amerisafe, Inc. (AMSF) to Outperform, based on the consistent top-line growth and sound financial position witnessed in the first quarter, where earnings considerably surpassed the Zacks Consensus Estimate based on higher-than-expected premiums and investment income that drove the top line, underwriting results, book value per share, ROE and combined ratio.
Prudent capital management, expanded share repurchase plan and affirmation of a strong financial strength rating point to decent long-term growth. Employers engaged in hazardous industries pay substantially higher than average rates for workers compensation insurance due to the inherent workplace danger. Amerisafe has a history of profitable underwriting in these industries.
Our six-month target price of $33.00 per share equates to about 19.1x our earnings estimate for 2012. With no dividend supplement, this target price implies a total expected of 18.3% over that period, which is consistent with our Outperform recommendation.
We are downgrading our long-term recommendation on Companhia de Bebidas Das Americas, or AmBev (ABV) to Underperform, citing a negative impact on the company's future financial performance due to the Brazilian government's recent decision to raise taxes on beer and soft drinks.
To shield against the higher taxes, the company might inflate its prices in an effort to somewhat offset the negative impact, which might result in lower volumes. As a result, the net income may be pulled down.
The company reported a lower-than-expected first-quarter 2012 earnings of $0.40 per share. Also, intense competition from global and regional players coupled with seasonal nature of business may undermine the company's future operating performance.
Latest Posts on the Zacks Analyst Blog:
Research In Motion Remains Neutral
The beleaguered BlackBerry smartphone manufacturer Research In Motion Ltd. (RIMM) remains in dire strait as it reported highly disappointing first quarter of fiscal 2013 financial results, which were nowhere near the Zacks Consensus Estimates. The company’s future financial outlook looks grim and it continues to delay the launch of its much-hyped BlackBerry 10 software based handsets. We reiterate our Neutral recommendation on the stock due to its extremely low-level of current valuation.
For the first time since December 2003, the stock price of the company tumbled below $10 per share in June 5, 2012. So far, Research In Motion failed to provide any specific time frame when its free fall will ultimately end. Further, the company hired investment banks, JPMorgan Chase & Co. and RBC Capital Markets, to evaluate various strategic options including the sale of the company as management is unsure about its future prospects.
Research In Motion is facing severe problems from several fronts. The company is facing an ever increasing competitive landscape, a stagnant product portfolio, and an unfavorable product mix. The nightmare of Research In Motion continues ever since Apple Inc.’s (AAPL) iPhone hit the market. The situation aggravated once Google Inc. (GOOG) launched its Android software and several handset manufacturers adopted that operating system.
We believe management has so far failed to do a proper research, which can place the company’s motion forward. We are still waiting for a game changing product (either software innovation or hardware innovation), which can turn the tide in favor of Research In Motion.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.
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.
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