For Immediate Release
Chicago, IL – December 3, 2012 – Zacks Equity Research highlights Monster Worldwide (NYSE:MWW) as the Bull of the Day and Best Buy Co (NYSE: BBY) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on the Apple, Inc. (AAPL), AT&T, Inc. (T) and MetroPCS Communications, Inc. (PCS).
Here is a synopsis of all five stocks:
Earnings estimates have moved up significantly after Monster Worldwide (MWW) reported better-than-expected results for the third quarter of 2012. Monster announced a series of restructuring actions in order to focus on its core business and improve its cost structure. These initiatives are aimed at boosting profitability and cash flow.
The restructuring actions include the sale of the ChinaHR business and curtailing losses in developing markets. On the other hand, Monster is currently reviewing strategic alternatives to maximize shareholder value, which includes the possible divestiture of the company.
We believe the shares have already hit an all-time low and a gradual recovery hereafter is on the cards. Thus, we maintain our Outperform recommendation on the stock.
Best Buy Co. (BBY) posted dismal third-quarter 2013 results. The quarterly earnings of $0.03 per share fell drastically by 94% from the year-ago quarter, and also missed the Zacks Consensus Estimate of $0.12 by miles. Total revenue also declined 3.5% to $10,753 million but came ahead of the Zacks Consensus Estimate of $10,730 million.
A tough economic environment in China and weak sales in Canada were the headwinds. Best Buy also suspended its future share buyback program and abstains from providing earnings projections for fiscal 2013 due to the uncertain environment related to product launches and industry-wide sales.
We remain concerned about secular headwinds and falling comps in televisions, gaming, notebooks and digital imaging. Moreover, Best Buy's cash position has shattered, plunging 85.1% year-over-year to $309 million at the end of the quarter. Consequently, we maintain our bearish stance on the stock.
T-Mobile May Get iPhone
There is a new buzz in the market that T-Mobile USA – the fourth largest telecom carrier in the U.S. may finally offer Apple, Inc’.s (AAPL) unlocked version of iPhones to its subscribers.
Earlier, most of the analysts had estimated that continuous loss of subscribers may force T-Mobile USA to team up with Apple to sell their iPhone devices to T-Mobile subscribers from 2013 onwards. However, unavailability of 4G LTE network service coupled with weaker cash positions has kept T-Mobile in a losing situation. Moreover, things worsened further when AT&T, Inc. (T) failed to acquire T-Mobile USA.
To recoup from its current position, T-Mobile USA took some major steps, this year. Firstly, they appointed a new CEO to help the company meet their future goal by executing their plans properly. Secondly, the company invested $4 billion in a bid to upgrade its network to 4G LTE (nearly 37,000 cell sites) and most recently, the company plans to merge with MetroPCS Communications, Inc. (PCS). The deal is still being considered by FCC.
Taking these factors into consideration, most of the analysts believe that the company’s latest move is intended to bring iPhone to its portfolio, which in turn will boost its subscriber growth going forward.
However, we believe that if these iPhones are launched at a subsidized rate ($400 per iPhone 5) then it will put huge pressure on margins and at the same time will affect the company’s bottom-line growth.
We maintain our long-term Neutral recommendation on AT&T Inc. and MetroPCS.
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.
About the Analyst Blog
Updated throughout every trading day, the Analyst Blog provides analysis from Zacks Equity Research about the latest news and events impacting stocks and the financial markets.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous analyst coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Click here to subscribe to this free newsletter today.
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros.
Follow us on Twitter: https://twitter.com/zacksresearch
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Zacks Investment Research
800-767-3771 ext. 9339
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
More From Zacks.com