For Immediate Release
Chicago, IL - October 26, 2018 - Zacks Equity Research Harsco Corp HSC as the Bull of the Day, Coherent COHR as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Amazon AMZN , Alibaba BABA and Walmart WMT .
Here is a synopsis of all five stocks:
Harsco Corp is a Zacks Rank #1 (Strong Buy) and sports a solid set of style scores. Let's review those style score, the movement in earnings estimates and look forward to next week when the company reports in this Bull of the Day article.
Harsco Corporation is a services and engineered products company. The principal lines of business are: mill services that are provided to steel and non-ferrous metal producers; gas control and containment products; scaffolding services; railway maintenance of way services and equipment; and several other lines of business including, process equipment, industrial grating and bridge decking, industrial pipe fittings, slag abrasives and roofing granules.
At Zacks, we have developed Style Scores to help investors more easily identify growth stocks and value stocks and momentum names. The Momentum Style Score refers mostly to earnings momentum and not to a chart pattern.
HSC as a nice set of scores, with B's for value and momentum. Being the aggressive growth stock strategist for Zacks, I look mostly at growth names and the A that HSC has in growth makes this a stock I have to take a deeper look at.
The Zacks Rank helps investors identify the stocks that have a positive change in earnings estimate revisions. The more positive the revision, the better the Rank.
The recent moves higher this quarter, next quarter, this year and next year's estimates have helped push HSC to a Zacks Rank #1 (Strong Buy).
The quarterly estimates have trickled higher by a penny or two over the course of the last 90 days. This quarter is looking at $0.37 while next quarter is looking for $0.29.
The annual estimates are more heavily weighted in the Rank, and the move from $1.20 to $1.23 over the last 90 days helps, but the real move is in the estimates for next year.
The Zacks Consensus Estimate for 2019 has moved from $1.35 to $1.45 over the last 90 days and that sort of move will get you noticed.
Earnings Next Week
I mentioned that HSC is going to be reporting soon, and I see the date as October 31 before the market opens. Hopefully, the numbers will not spook investors.
I see the Zacks Consensus calling for $447M on top and that would represent growth of 16% from the prior year. For 2018, I see topline growth projected to come in 7.6% ahead of last year and next year to be 6.6% ahead of this year.
We could get some guidance for next year on the upcoming earnings call, so be prepared for that.
Coherent recently slipped to a Zacks Rank #5 (Strong Sell) and is now the Bear of the Day just a few short weeks before the next earnings event. Let's take a look at how this stock became the lowest of the Zacks Ranks in this Bear of the Day article.
Coherent, Inc. is an American company, designs, manufactures and markets laser systems and components, laser measurement and control products, optics, and laser accessories, which are used both in industry and scientific research. Their markets are the microelectronics industry (e.g., flat panel display manufacturing, integrated circuit packaging, and integrated circuit inspection), scientific research, OEM components, and materials processing (e.g., CO2 lasers for cutting metals).
Recent Earnings Reports
COHR has reported EPS below the Zacks Consensus Estimate in each of the last two quarters. The most recent quarter was a miss of $0.07 for a negative earnings surprise of 2%.
The report previous to that was a miss of 15 cents for a negative earnings surprise of 4.3%.
COHR doesn't have the worst history I have ever seen, but it certainly isn't the best.
The Zacks Rank tells me how earnings estimates have trended of late. I see from the Zacks Rank #5 (Strong Sell) that earnings estimates will be heading lower.
CHOR has seen the estimate for 2018 move from $14.24 90 days ago down to $13.72.
There was a similar move for the 2019 Zacks Consensus Estimate as it moved from $14.52 to $12.83 over the same time period.
Estimates for the current quarter have fallen a lot. 90 days ago the Zacks Consensus Estimate was calling for $3.75, but that number now stands at $3.30.
eCommerce Stocks on the Rise in Emerging Markets
It's certain that in developed markets, e-commerce has become second nature for consumers. This can be seen through the number of Prime subscribers Amazon has. As of June 2018, there were 95 million prime subscriptions in the United States, according to Statista . It's no surprise that e-commerce in countries like the United States and China has already saturated the online industry and created platforms like Amazon and Alibaba. It's only a matter of time until developing markets will have a growing number of sales coming from e-commerce.
The Markets That Are In It to Win It
Although the idea of e-commerce is known worldwide, it sometimes may not be easily accessible or challenges may arise for businesses in developing countries. According to the World Trade Organization, more people in less-developed countries are being able to access the internet, day by day. Let's take a closer look at how e-commerce will affect these three developing countries in the upcoming years.
India is proving to be a front-runner in one of the fastest growing e-commerce markets in the world. Since 2015, the amount of internet users increased almost ten times from a decade prior. With accessibility to cheap mobile connections and internet access, users have been able to maximize the way they use the internet, which includes e-commerce as a big part.
Dominating the market in India is its largest e-commerce marketplace, FlipKart. Since its launch in October 2007, it has been the preferred online marketplace for Indian and many different International brands. The platform offers over 80 million products in more than 80 different categories. The e-commerce platform was acquired by retail giant Walmart a couple of months ago. From this acquisition, we can expect Walmart to revolutionize commerce in India with lower prices and more international products.
According to the India Brand Equity Foundation , the e-commerce market is expected to reach US$64 billion by 2020 from US$39 million in 2017. There has been an ongoing digital transformation in the country and due to that, India could surpass the United States to become the second largest e-commerce market in the world by 2034.
South East Asia
E-commerce is on the way to becoming a major industry in the SEA region as well. According to TechinAsia , there are over 330 million internet users in the South East Asia region, with the number only increasing. Most of SEA's demographics is made up of a younger population, hence it being a mobile-first economy. In countries like Singapore, Malaysia, Indonesia and the Philippines, mobile commerce has grown by almost 20% as the average Southeast Asian spends about 140 minutes online shopping every month.
E-commerce startups have been quite successful in the SEA region over the past few years. In 2017, different startups raised almost $8 billion. More specifically, Singapore based e-commerce startup, Carousell, raised $85 million in Series C funding earlier this year. It is apparent that smaller businesses have found their niche in the e-commerce market and have been doing well in that area with the support of government and educational institutions helping to kick-off the businesses.
According to ValueWalk , e-commerce is expected reach a valuation of $200 billion by 2025. It is clear that with a community that is successful with startup culture, we can expect success in the upcoming years in the e-commerce market in South East Asia.
Although still a long way to catch up, Latin America is slowly but surely trying to enter the e-commerce market. Brazil and Mexico are definitely the two top largest countries in Latin America that have doubled in size in terms of e-commerce, with a lot of goods imported from the United States to be sold there. According to DigitalCommerce360, three quarters of Mexico's online population shopped online in 2017. More developed countries in Latin America such as Argentina and Colombia are the ones to look towards, especially for online retailers looking to enter the Latin American market.
However, some challenges have arose in the e-commerce industry in the Latin America. One main problem that Latin America faces is the difference in payment methods across the country. Since the region has a very large underbanked population, most consumers use cash payments. This means that it can be difficult to use e-commerce if the only way to pay is through cash. Although, the country is expected to reach $118 billion by 2021.
From the developing countries listed above (and many more), it is definitely certain that the e-commerce market is on the rise, everywhere. In the upcoming years, we can expect a variety of online retailers and business to arise.
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