Chicago, IL - April 06, 2015- Zacks Equity Research highlights DTS Inc. ( DTSI - Free Report ) as the Bull of the Day and Qihoo 360 Technology ( QIHU - Free Report ) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on McDonald's Corp. ( MCD - Free Report ), Cracker Barrel Old Country Store, Inc. ( CBRL - Free Report ) and BJ's Restaurants, Inc. ( BJRI - Free Report ).
Here is a synopsis of all five stocks:
DTS Inc. ( DTSI - Free Report ) is a $560 million digital audio technology company that develops and licenses consumer surround-sound products and provides the audio platform for the new high-definition Blu-ray format.
DTS decoders are in virtually every major brand of 5.1-channel surround processors, and there are more than 300 million DTS-licensed consumer electronics products available worldwide. A pioneer in multi-channel audio, DTS technology is in home theatre, car audio, PC and game console products, as well as DVD-Video, Surround Music and DVD-ROM software.
The company delivered a 25% earnings beat in early March and, excluding royalties from compliance activities, revenue for the fiscal year ended December 31, 2014 was $130.6 million, an increase of 10% compared to $118.8 million in 2013. An upside surprise of $2.7 million in revenue from the company's royalty audit program pushed Q4 revenues to $35.2 million.
Consensus EPS estimates for this year and next were subsequently bumped by over 13% to $1.30 and $1.61, representing 23% earnings growth.
This key provider of audio technology for nearly every consumer device became a Zacks #1 Rank on March 6 right after that report and the stock has moved quietly sideways, appearing poised for a breakout to 4-year highs above $34.
Assuming Blu-ray continues to grow in popularity and opens up new end-markets in PCs and video game consoles, DTS will benefit as a provider of mandatory-use technology that should become a meaningful earnings driver for the company. Blu-ray revenues currently comprise about 20% of the total.
Two new products include Headphone:X and Play-Fi and each represent new growth opportunities in consumer markets.
Qihoo 360 Technology ( QIHU - Free Report ) offers Internet and mobile security products and is the number 2 search engine in China behind Baidu. Despite high hopes for the company to eat away at the leader's market share in search, and the advertising revenues that go with it, Qihoo's business has not stood up to the hype.
The stock first became a Zacks #4 Rank (Sell) in late November after the company's 3rd-quarter results prompted analysts to lower earnings estimates. Back then it was trading over $70 and has slid progressively as the news doesn't get any better.
In the last 60 days, EPS estimates for this year have fallen from $3.43 to $2.88. And next year's growth outlook has seen EPS estimates drop from $5.70 to $4.37, a 23% plunge.
Shares have rallied from 20-month lows near $45 since their Q4 report on March 9 offered a 5.5% earnings beat. But analysts still took estimates lower.
Growth projections for Qihoo remain optimistic, but one has to wonder why the analysts keep having to rein in those views quarter after quarter. Until the estimates start getting revised back upwards, it might be best to stay on the sidelines with QIHU. The Zacks Rank will let you know when the coast is clear.
McDonald's Offers Wage Hike, Paid Leave & College Aid
McDonald's Corp. ( MCD - Free Report ) announced improved benefits for employees at its company-owned restaurants, including a wage increase along with paid time-off for full and part-time employees. These benefits will be effective Jul 1 for 90,000 employees at about 10% of McDonald's restaurants in the U.S.
Preliminary wages at McDonald's company-owned restaurants in the U.S. will be a dollar more than the official minimum wage in the region. The wages of all employees, up to the restaurant manager, will be revised according to the tenure served and performance.
In addition, McDonald's will allow full and part-time employees, who have been with McDonald's for at least a year, to accrue personal paid time-off. If employees do not use the time-off, they will be paid for that time. Further, by the end of 2016, McDonald's expects the average hourly wage rate for employees at company-owned locations to be more than $10.
Furthermore, the company is expanding its Archways to Opportunities education offerings to offer eligible McDonald's U.S. employees - at both company-owned and franchised restaurants - with free high school completion and college tuition assistance.
The company is also assisting eligible restaurant employees through Career Online High School (COHS) - a national accredited program - to take classes and earn a high school diploma at a convenient time and place, with McDonald's USA covering the costs. For those seeking a college education, the restaurateur will assist with college credits and tuition aid. Also, the company is expanding its offering of free English language classes for those who speak English as a second language.
We believe that the announcement of the wage hike across the company-owned restaurants will lead to better customer service. In addition, such a move might force franchisees to follow in the footsteps of the parent company, particularly if they are operating in the same market. Further, it would give the fast food giant some relief on the negative publicity it received due to low wages.
McDonald's currently carries a Zacks Rank #4 (Sell). Some better-ranked stocks in the same industry include Cracker Barrel Old Country Store, Inc. ( CBRL - Free Report ) and BJ's Restaurants, Inc. ( BJRI - Free Report ), which sport a Zacks Rank #1 (Strong Buy).
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