Chicago, Dec. 31, 2014 /PRNewswire/ — Zacks Equity Research highlights Lifelock (NYSE: LOCK–Free Report) as the Bull of the Day and AOL (NYSE: AOL–Free Report)as the Bear of the Day. In addition, Zacks Equity Research provides analysis onNordstrom Inc. (NYSE: JWN–Free Report), Pacific Sunwear of California Inc. (Nasdaq: PSUN–Free Report) and Shoe Carnival Inc. (Nasdaq:SCVL–Free Report).
4Q 2014 performance of LOCK (source Yahoo Finance).
Here is a synopsis of all five stocks:
Lifelock (NYSE: LOCK–Free Report) with all the college football games coming up, some gamblers will be looking for a “lock” or a play that is as close to a sure thing as you can get. My personal “lock” for that is taking Ohio State and the points. LOCK is a Zacks Rank #2 (Buy) and while it has nothing to do with gambling or college football it is a great play on personal security.
An idea that might be lost in the recent Sony hack was that a list of employees and their social security numbers was published by the hackers. This exposes those employees in a big way and should lead to the company picking up the tab for Lifelock services.
Warning messages by Hackers of Sony Pictures(file photo).
The number of companies that were hacked last year was pretty big, but the number of consumers that were exposed is even bigger. Companies like Home Depot and Target noted that millions of their customers credit cards were compromised, but what if the same thing happens to a bank?
LifeLock provides identity theft protection services for consumers as well as fraud and risk solutions for enterprises in the United States. It protects consumer subscribers through monitoring identity-related events, such as new account openings and credit-related applications. LifeLock was founded in 2005 and is headquartered in Tempe, Arizona.
The Zacks Research System (ZRS) gives me all the data that I use to review stocks. It has data on 9 earnings reports for LOCK, and in all of them, the company has beaten the Zacks Consensus Estimate. Most were by a penny or maybe two, but the most recent beat is the one that catches my eye. The company reported earnings of $0.12 when the Zacks Consensus Estimate called for $0.08. Thatfour cent beat translates into a 50% positive earnings surprise. The company also beat on the topline in each of the last four quarters as well.
There are times when I look at the list of Zacks Rank #5 (Strong Sell) stocks and I see a theme. Right now the theme is oil stocks and anything related to the oil patch, as those stocks are seeing lowered earnings estimates as the price of crude continues to fall. But a different name stood out at me on the list of roughly 200 #5’s.
AOL (NYSE: AOL–Free Report) is now a Zacks Rank #5 (Strong Sell) while I see a number of other internet names that have much higher Zacks Rank. This is clearly not a case of a sector in turmoil, but rather a stock that is seeing analysts cut earnings estimates.
AOL, formerly America Online, is an online media company that provides internet search and content as well as ad serving technology. The company was founded in 1985 and is headquartered in New York, New York.
AOL has missed the Zacks Consensus Estimate in two of the last three quarters, which is a departure from the recent history of beating the number. Prior to the recent misses AOL was on a roll of 9 consecutive beats of the Zacks Consensus Estimate.
At the end of the year, I take a look at stocks that could see a pile-on effect of tax loss selling and lowered earnings estimates. This is not the case for AOL as the stock is more or less flat with the start of the year, so there is no real benefit to any tax loss selling. In fact, it is almost the opposite.
Additional content:
Will Nordstrom Gain Further Traction from Growth Initiatives?
Shares of leading fashion specialty retailer, Nordstrom Inc. (NYSE: JWN–Free Report), have been gaining traction, backed by its store-growth initiatives, flourishing customer strategy reflecting growth across channels and its latest Trunk Club acquisition bearing fruit. These, in turn, led to strong third-quarter fiscal 2014 results.
Nordstrom offers a broad array of over 500 brands and caters primarily to the upscale segment through its globally recognized brands. This enables it to generate high-margin revenues. Nordstrom also appeals to its consumers by offering a more inclusive selection of quality merchandise, which further distinguishes it from other mall-based department store retailers.
Further, the company has been making continuous efforts toward its store expansion. In fact, quite recently, Nordstrom announced its plan to introduce another Rack store in Florida. This will mark the company’s ninth Rack store in South Florida.
Nordstrom’s focus on store expansion is evident from the series of Rack store openings since the beginning of fiscal 2014. Its latest store openings signify the company’s commitment toward strengthening its network with the aim of driving top-line growth. Since the beginning of fiscal 2014, the company has opened 29 stores and currently operates a total of 289 outlets across 37 U.S. states andCanada.
Moreover, in a move to capture the rapidly growing men’s clothing market, Nordstrom recently completed the acquisition of Chicago-based provider of personalized clothing services for men, Trunk Club. We believe that this acquisition strategically fits Nordstrom’s business model.
Coming to its financial results, the company recently posted strong third-quarter results wherein its quarterly earnings of 73 cents per share came ahead of the Zacks Consensus Estimate of 71 cents and in line with the company’s expectations. Earnings also rose 5.8% from the comparable prior-year quarter figure. On an average, the company has delivered a positive earnings surprise of nearly 4% over the past 6 quarters.
Also, backed by robust comparable-store sales growth, Nordstrom’s total revenue of $3,140 million registered about 8.9% year-over-year growth and surpassed the Zacks Consensus Estimate of $3,108 million. Shares of the company have jumped 8.6% since the announcement.
Additionally, the company enjoys a healthy financial status as is evident from its regular dividend payments. Dividend payments highlight a company’s stable cash position and cash flow generating capacity, indicating that it can be a growth and income stock.
All these factors speak positively about the company and highlight its solid growth prospects. Further, Nordstrom hit a 52-week high of$79.57 yesterday, before closing at $79.18 and displaying a year-to-date increase of 30.6%.
However, the company’s projections for fiscal 2014 reflect higher costs across the board due to the ongoing investments, which will likely weigh on its margins. Moreover, we are cautious about the company’s growth prospects due to the soft economic recovery, intense competition and exposure to seasonal fluctuations.
Nordstrom currently carries a Zacks Rank #3 (Hold).
Key Picks from the Sector
Better-ranked retail stocks include Pacific Sunwear of California Inc. (Nasdaq: PSUN–Free Report) and Shoe Carnival Inc. (Nasdaq:SCVL–Free Report), each sporting a Zacks Rank #1 (Strong Buy).
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