For Immediate Release
Chicago, IL - August 14, 2017 - Zacks Equity Research highlightsMSCI (NYSE: MSCI - Free Report ) as the Bull of the Day Banc of California(NYSE: BANC - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Melco Crown Entertainment (NASDAQ: MLCO - Free Report ), Wynn Resorts, Limited (NASDAQ: WYNN - Free Report ) and MGM Resorts International (NYSE: MGM - Free Report ).
Here is a synopsis of all five stocks:
Investors have witnessed a huge surge in interest for all types of passive investing products. These types of investments-and in particular, those in the ETF world-have seen sizable inflows as more and more look for a buy-and-hold approach, or seek to reduce costs by looking to index-based funds instead of actively-managed securities which tend to be a bit more expensive, on average.
This has been great news for index companies, as their benchmarks have become increasingly in-demand as of late. And with fund companies often paying licensing fees to use the indexes based on assets under management, a boon in fund assets is a win for index providers too.
MSCI operates in a couple different areas, including analytics, ESG/social research, real estate analysis, and of course, the index division which provides equity benchmarks for companies, as well as portfolio construction and rebalancing solutions. Analysts are becoming increasingly bullish on this business model as of late, and it doesn't hurt that the company has a great track record in beating earnings estimates either.
In fact, it is showing an average earnings surprise of 5.6% in the past four quarters, and it appears somewhat optimistic on the full year time frame too. I say that because analysts have also been increasing estimates for the current quarter and the current year as of late, and we actually haven't seen any estimates (at all) go lower for the current quarter or the current year in the past two months.
These analyst moves have also had a nice impact on the consensus estimate, as this has seen a boost over the past few weeks. In fact, the current quarter estimate has increased by roughly 5.5% in the past two months, while the full year estimate has increased by 4.4% in the same time frame.
With North Korean tensions dominating the headlines, investors are piling into safe havens. This is having a huge impact on Treasury bonds, pushing yields lower in the process.
It is also dulling the prospect of a rate hike by the Fed in the near term, and while we have seen a broad market sell-off a result, the impact has been especially poor for the financial sector. That is because this segment depends on a solid yield to fuel profits, and a risk-off environment doesn't help that trend.
We can see a great example of that in many names in the financial space as of late, while some in particular have been suffering from longer term issues too. These types of companies-which are experiencing both short term woes and longer-term trouble-may make for poor investments in today's environment, and investors may want to consider avoiding them in the near future. A great example of this is with Banc of California(NYSE: BANC - Free Report) , today's bear of the day.
Banc of California has a few major issues when we consider its fundamentals, including a poor recent history in earnings season. This includes two straight misses, something that is definitely indicative of a poor trend.
That isn't all though, as the company is seeing sliding earnings and sales when compared to the year ago period, while analysts are increasingly bearish about the company's future. This includes several analysts slashing estimates in the last month for both the current quarter and the current year, and also a complete lack of analyst estimate upgrades in these time periods.
We have also seen a huge cut to the consensus estimate as a result of these analyst downgrades. In just the past month, the consensus estimate has declined by nearly 40% for the coming quarter, and close to 30% for the full year. Clearly, the stock has earned its Zacks Rank #5 (Strong Sell) ranking and may be poised for more weakness in the future too.
Casino Stocks Fall: Is North Korean Tension to Blame?
Shares of some casino industry powerhouses fell across the board on Thursday, many of which have ties to Macau, the world's newest gambling Mecca. However, with tensions surrounding North Korea escalating, the hotspot's close proximity to the tumultuous region might possibly hurt stock prices.
Lower travel numbers could spark trouble for U.S.-based companies that now operate in Macau. The area's success has helped the gaming industry gain over 21% year-to-date, outpacing the S&P 500 by almost double, according to our Zacks Industry Rank data.
June travel to Macau rose 0.86% year-over-year according to an Oversea-Chinese Banking Corporation report. Mainland Chinese visitor rates to the gambling destination increased by 0.8%. But travel from nearby Hong Kong fell by 3.9%, and Taiwanese tourism dropped by 9.9%.
The report cited expensive transportation costs and pricey accommodation as possible reasons for June's slowdown in tourism.
But it seems for now casinos can breathe easy if June numbers hold, as visitor rates weren't down across the board. The number of overnight visitors to Macau grew for the 23 rd month in a row.
Japanese tourism increased by 13.5% and South Korean numbers skyrocket by 42.2% according to the OCBC report. However, June was a long time ago in terms of the geopolitical climate. If the North Korea situation keeps getting worse, which seems like a strong possibility, travel to Macau could slow and in turn help bust some casino stocks.
Investors should keep a close eye on these numbers from Japan and South Korea, two U.S. allies that have a lot at stake in the current climate. If tensions continue to increase, fear could keep tourists at home.
One Simple Trading Idea
Since 1988, the Zacks system has more than doubled the S&P 500 with an average gain of +25% per year. With compounding, rebalancing, and exclusive of fees, it can turn thousands into millions of dollars.
This proven stock-picking system is grounded on a single big idea that can be fortune shaping and life changing. You can apply it to your portfolio starting today. Learn more >>
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 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.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year. See these high-potential stocks free >>.
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
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer .
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 https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report