For Immediate Release
Chicago, IL - February 16, 2012 - Zacks Equity Research
highlights
AMERCO, Inc.
(
UHAL
) as the Bull of the Day and
Arch Coal, Inc.
(
ACI
) as the Bear of the Day. In addition, Zacks Equity Research
provides analysis on
Capital One Financial Corporation
(
COF
),
ING Groep NV
(
ING
) and
HSBC Holdings Plc
(
HBC
).
Full analysis of all these stocks is available at
http://at.zacks.com/?id=2678
.
Here is a synopsis of all five stocks:
Bull of the Day
:
AMERCO, Inc.
(
UHAL
) is the parent company of U-Haul International, the largest
consumer truck rental company in the world. It is also the second
largest self-storage company in North America.
The impact of the decline in housing and a decrease in apartment
occupancy rates appears to have ended. We expect continued
improvements in operating parameters. Our recommendation continues
as Outperform, with a price target of $110 a share.
The stock has usually been valued on EBITDAL (EBITDA plus lease
expense) per share, selling between two and three times EBITDAL.
Based on our estimates for the next four quarters EBITDAL of $40 a
share, we would expect a price range of $95 to $125.
Bear of the Day
:
Arch Coal, Inc.'s
(
ACI
) fourth quarter operating earnings of $0.29 per share missed the
Zacks Consensus Estimate. Full-year results also failed to meet
expectations. Going forward, increased regulation and alternate
energy sources, specifically natural gas, continue to be major
risks for coal miners like Arch Coal.
We remain concerned about the recent difficulties faced at the
company's Powder River Basin operations as well as the longwall
outage at Mountain Laurel (Appalachia). We retain our Underperform
recommendation on the company.
Arch Coal's current trailing 12-month earnings multiple is 13.4,
compared to the 10.0 average for the peer group and 14.3 for the
S&P 500. Presently, the stock is trading at a discount to the
peer group, based on 2012 earnings estimates. The trailing 12-month
EV/EBITDA multiple is above the industry average. Our target price
is $13, valued at 7.1x 2012 EPS.
Latest Posts on the Zacks
Analyst Blog
:
Fed OK's Capital-One-ING Direct Deal
It's a 'YES' for
Capital One Financial Corporation
's (
COF
) plan to acquire ING Direct USA, the online banking unit of
Amsterdam-based
ING Groep NV
(
ING
). On Tuesday, the Federal Reserve finally approved the deal. The
consent removes the doubt that the acquisition would create the
next 'too-big-to fail' banking institution.
In June 2011, COF had announced that it would acquire ING Direct
in a stock-cum-cash transaction. As per the terms of the deal, the
company would pay $6.2 billion in cash and $2.8 billion in stock to
ING Groep. For this, the company will offer 55.9 million shares to
ING Groep at $50.07 per share, making ING Groep the largest single
shareholder in COF. Now, the company is expected to close the deal
over the next few days.
This deal will enable COF to move to the fifth position from the
present eighth, in terms of deposits in the U.S. Additionally, ING
Direct, with about 7.7 million customers in its kitty, would
further enhance the company's market share in the online banking
sector.
Reasons for the Delay in Approval
Following the announcement of the agreement in June 2011,
serious concerns were raised by Congressman Barney Frank and the
National Community Reinvestment Coalition (NCRC) against COF-ING
Direct deal. According to them, the deal would limit the consumer
access to banking and credit services as well as would heighten the
risks to the financial system of a new 'too-big-to-fail'
institution.
The COF-ING Direct deal became the first acquisition agreement
that was reviewed by the Fed under the provisions of the Dodd-Frank
Act. The Fed, under the Dodd-Frank Act, was required to weigh the
systematic risks of the deal before giving it the regulatory
nod.
Hence, the Fed held three public hearings on the proposed
acquisition during September-October 2011. The Fed had also
extended the period for public comment on the abovementioned
agreement.
Reasons for the 'YES'
The Fed thoroughly analyzed the COF-ING Direct deal and
scrutinized whether the proposed agreement would benefit the public
at large with better efficiency, increased competition as well as
greater convenience. These benefits should outweigh the adverse
affects that include unfair competition, unstable banking
practices, conflicts of interest and risk to the stability of the
U.S. financial system.
The Fed also took into consideration various factors including
complexity and size of both the companies, their regulatory capital
ratios before and after the completion of the agreement, asset
quality and inter-relation between the companies and the economy as
a whole. Furthermore, the Fed also considered the other pending COF
agreement relating to the acquisition of
HSBC Holdings Plc
's (
HBC
) U.S. credit card unit.
The Fed stated that COF has a record of successfully integrating
large companies with its business operations. Since 2005, the
company has integrated three banks - Hibernia Corporation in 2005,
North Fork Bancorporation in 2006, and Chevy Chase Bank in
2009.
Moreover, while building the case in its favor, COF guaranteed
$180 billion in community loans and investments over the next 10
years. This includes $28.5 billion worth of home lending to
borrowers, who are characterized as low-and moderate-income group.
In addition to all these, the company announced its plans to hire
workers in Delaware.
However, the approval came with a set of conditions. The Fed has
asked COF to restructure its risk-management framework and lending,
and debt-collection practices. The company has 90 days to fulfill
these conditions.
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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ARCH COAL INC (
ACI
): Free Stock Analysis Report
CAPITAL ONE FIN (
COF
): Free Stock Analysis Report
HSBC HOLDINGS (
HBC
): Free Stock Analysis Report
ING GROEP-ADR (
ING
): Free Stock Analysis Report
AMERCO INC (
UHAL
): Free Stock Analysis Report
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