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Ocean Rig, Conn's, Macy's, Amazon.com and Best Buy highlighted as Zacks Bull and Bear of the Day

Chicago, IL - December 16, 2015- Zacks Equity Research highlights Ocean Rig ( ORIG ) as the Bull of the Day and Conn's ( CONN ) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Macy's, Inc. ( M ), Amazon.com Inc. ( AMZN ) and Best Buy ( BBY ).

Here is a synopsis of all five stocks:

Bull of the Day :

Some people are going to look at today's Bull of the Day and think that I've completely lost it. They're going to say I don't know what I'm talking about and that I've made the worst stock pick ever. I know there's a risk of me sounding like a complete idiot here. But hey, it wouldn't be the first time I got a fist full of haters talking about my stock pick and it probably won't be the last. But maybe, just maybe, I'm crazy like a fox.

Today's Bull of the Day is Ocean Rig ( ORIG ). Ocean Rig is an offshore drilling contractor that provides oilfield services for offshore oil and gas exploration, development, and production drilling. It specializes in the ultra-deepwater and harsh-environment segment of the offshore drilling industry. Now before you go pulling out your pitchforks and storming the castle, think about this. Maybe, just maybe, the worst is priced in already. Maybe, just maybe, these are the dark days for oil and it will get better from here. Maybe.

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Surprisingly Ocean Rig is a Zacks Rank #1 (Strong Buy). Even more surprising is our Zacks Consensus Estimate for the current year was $2.00 just ninety days ago. No, that's not an error, this is a company we thought would make $2 a share this year and yes, it's trading at $1.44. Let that sink in for a little bit. Like a late infomercial, wait, there's more. Over the last week, two analysts have increased their earnings estimates for the current year from $2.00 to $2.39. Again, the stock is trading at $1.44.

Now before you get too excited and load the boat on this one, there's still some major risk. Next year's consensus, while up from 83 cents, still sits down at $1.44. That's a significant drop off from this year's $2.39 EPS number. What's more surprising to me has been the earnings surprises for ORIG. The stock has surprised to the upside three quarters in a row. The most recent beat coming in at 58 cents versus expectations for 44 cents per share. Before that we had a 31 cent beat and a 36 cent beat.

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Again, I'm not saying this is a sure thing by any stretch of the imagination. But if you're looking for a roll of the dice that may work itself back into the good graces of the market over the next several months, perhaps you should give this name a shot.

Bear of the Day :

Times are changing. American consumers are changing the way that they shop for the holidays and everyday items. Rather than rushing into brick and mortar retailers, mobile shopping and online is taking over. In fact, over the most recent Black Friday weekend more shoppers clicked their way to items than bricked their way to items. That is, more people shopped and purchased online than in stores. Looks like the retailers are becoming giant showroom floors for the likes of Amazon, eBay and other online shopping sites.

So today's Bear of the Day is one of these brick and mortar retailers that's just not cutting the mustard as of late. Conn's ( CONN ) operates as a specialty retailer of durable consumer goods and related services. The company's stores provide home appliances, home furniture, mattresses, home office products and consumer electronics. The company operates about 100 stores in Arizona, Colorado, Georgia, Louisiana, Mississippi, Nevada, New Mexico, North Carolina, Oklahoma, South Carolina, Tennessee and Texas.

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The story at Conn's is similar to other retailers around the country. It's tough for the brick and mortar stores to keep up with companies that have an online presence and don't have the overhead of a physical location. The analysts have taken note and dropped their earnings estimates for the current quarter, current year and next year. The result has dropped our Zacks Consensus Estimates substantially for all three of these periods.

Over the last ninety days, our Zacks Consensus Estimate for the current quarter has gone from 65 cents down to 29 cents. The current year number has plummeted from $1.96 to $1.27 while next year's number has gone from $2.76 to $2.05. The negative revisions are a big reason for the Zacks Rank #5 (Strong Sell) rating we currently have on the stock.

Additional content:

Is Holiday Season Headed Toward a Retail Bonanza?

After a subdued Black Friday performance at brick-and-mortar stores dampened the retail fervor, the markets turned buoyant again on positive sales data for November that indicates sufficient momentum in the economy. After all, the holiday season is not over yet and Christmas is right around the corner.

Retail sales were up a modest 0.2% in November, following a 0.1% rise in October, representing the largest increase since July. So retailers should be on their toes, with promotional events, free shipping on online purchases and heavy discounts, to tap the willingness of consumers to spend more.

Black Friday did not turn out to be a blockbuster one as retailers had adopted and showcased their promotional strategies well in advance. This took some of the charm away from the Thanksgiving weekend, which is seen as the biggest holiday shopping weekend. Moreover, increased online shopping resulted in lower footfall in stores.

According to figures released by ShopperTrak, sales at brick-and-mortar stores on Black Friday declined 11.9% year over year to $10.21 billion. Sales on Thanksgiving came in at $1.76 billion, down 12.5% from 2014. On the contrary, Thanksgiving and Black Friday online sales touched a new record this year, surging 18% to $4.47 billion, per Adobe. It seems that customers have decided to beat the in-store rush and shop earlier or buy from the comfort of their homes.

With a rebounding economy, falling unemployment rate and gasoline prices, higher consumer confidence and improving consumer spending, the retail space is brimming over with optimism. ShopperTrak reiterated a sales increase of 2.4% at brick-and-mortar stores this holiday season.

The holiday season is no less than a battlefield for retailers who vie for consumer attention. Retail giants such as Macy's, Inc. ( M ), Amazon.com Inc. ( AMZN ) and Best Buy ( BBY ) will go the extra mile to attract bargain hunters. As retail companies move heaven and earth to win the hearts of shoppers, the wait for the winner will surely be an interesting one.

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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 the Analyst Blog

Updated throughout every trading day, the Analyst Blog provides analysis from Zacks Equity Research about the latest news and events impacting stocks and the financial markets.

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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.

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OCEAN RIG UDW (ORIG): Free Stock Analysis Report

CONNS INC (CONN): Free Stock Analysis Report

MACYS INC (M): Free Stock Analysis Report

AMAZON.COM INC (AMZN): Free Stock Analysis Report

BEST BUY (BBY): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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