Markets

Rio Tinto, TripAdvisor, Wellcare Health, Qorvo and Cliffs Natural highlighted as Zacks Bull and Bear of the Day

For Immediate Release

Chicago, IL - August 11, 2016 - Zacks Equity Research highlights Rio Tinto ( RIO ) as the Bull of the Day and TripAdvisor ( TRIP ) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Wellcare Health ( WCG ), Qorvo ( QRVO ) and Cliffs Natural ( CLF ).

Here is a synopsis of all five stocks:

Bull of the Day:

When you see the word 'Rio' you probably think of the Olympics these days. But stock investors would be better off thinking about Rio Tinto ( RIO ) instead, thanks to its impressive turnaround story and potential for additional gains in the future.

This is largely thanks to a big turnaround in not only commodity prices, but general sentiment over the space too. Due to these trends, RIO has managed to add about 32% in the past six months, easily trouncing not only the market at large, but the broader materials sector too. Let's take a quick look at some of the company's fundamentals below and discuss why this might be a promising pick for the future too.

Rio Tinto in Focus

Rio Tinto is one of the world's largest miners and processors of metals and minerals. The company has massive operations around the globe, and mines everything from aluminum and copper, to precious metals and diamonds.

Many of these markets have bottomed out in recent months, allowing for RIO shares to bottom out too. And with a more bullish environment for commodities these days, analysts have begun to take notice and are upgrading their estimates for RIO stock.

Estimates

In fact, if we look to full year estimates, we can see a pretty incredible estimate revision trend taking place over the past few months.

Just sixty days ago, RIO was expected to earn $1.18/share in earnings, but today it is looking to post earnings of $1.76/share for the full year. And with a positive earnings ESP, it suggests that the most recent estimates have been the most bullish on the company's prospects.

Obviously, this represents a huge sea-change for RIO prospects, as estimates have increased by nearly one percent a day in the past two months. No wonder the stock has earned itself a Zacks Rank #1 (Strong Buy) and why we are looking for more outperformance from this name in the near future.

Bear of the Day :

It has been an extremely difficult period for companies in the travel market. Concerns over Zika and terrorism are making those that would otherwise travel stay home, hitting a number of companies in the airline, hotel, and cruise markets.

But another area that has also been impacted is the online travel review market, with companies like TripAdvisor ( TRIP ) being prime examples. After all, why would you review things-or look at reviews-for a trip that you aren't going to make anytime soon?

Don't believe me? Well, take a look at how TRIP has done in its recent earnings reports as a guide.

TRIP earnings

For both of TRIP's most recent earnings reports the company missed earnings estimates. The company saw a 40% miss two quarters ago, and it followed it up with a 9.6% miss in the most recently completed quarter.

Investors sold off the stock as a result, and shares of TRIP are approaching 2016 lows as a result of these recent sell-offs. And with some of the recent earnings estimate revisions, it is hard to have an optimistic look on TRIP stock these days, suggesting TRIP may test those 2016 lows before long.

Recent Estimates

Following the most recent miss for TRIP, analysts have been racing to downgrade their expectations for the stock in both the near term and the long term. Who can blame these analysts given the rough overall travel environment, and the fact that TRIP has had great difficulty in living up to earnings expectations?

It is also worth noting that analysts haven't just been giving a slight reduction in estimates lately, as shares have seen nearly double digit percentage Consensus estimate reductions for the current quarter, while the full year has seen a 10.2% reduction in the Consensus.

Additional content:

Keep Your Eyes on the Road Ahead: Zacks Market Strategy

The following is an excerpt fromJohn Blank's full Market Strategy report . To access the full PDF,click here .

Welcome to Zacks Market Strategy for August 2016. Here are three key things that matter to the stock markets.

A Forward Look on S&P 500 Earnings - It's All-Important

Consensus sees a -0.3% in EPS growth for 2016 and a hockey stick +13.3% for 2017. In 2015, the S&P 500 saw -0.8%. In 2014, it saw +5.1%. Consensus uses +1.8% for 2016 and +5.9% for 2017 as fresh revenue growth comps.

Second, Keep an Eye on the Small Caps

Russell 2000 stocks lead as markets go "Risk-on." Fast-growing small U.S. companies beat consensus more easily. A 2016 "risk-on" rally remains my call into the fall, after two years of poor performance.

Finally, Keep an Eye on Manufacturing

The U.S. ISM manufacturing PMI is strengthening. At 52.6 in July and 53.2 in June, a big lift took place from the 50.7 in May, 50.8 in April, 51.5 in March, and 51.3 in Feb. Companies have benefited from a mild pullback in the value of the U.S. dollar that makes U.S. goods less expensive. Consumer demand at home has also been steady. Higher oil prices ease pressure on energy firms to slash investment.

The global manufacturing sector showed a little life too. At 51 in July, the J.P. Morgan Global Manufacturing PMI™ registered a better reading to signal an early bounce to industry growth. Japan remains weakest among developed areas. China is flat. Brazil looks worst at 46, but that PMI read is bouncing. Russia broke 50.

Zacks Sector/Industry/Company Telescope for August

Winners: The usual strong sector plays -- Health Care and Info Tech -- showed up again. That means hot Medical Care and Drugs for Health Care industries and the hot Semiconductor industry for Info Tech.

Noted upgrades to Metals-non-Ferrous and Steel industries speak for themselves. Those upgrades led to Materials getting back to Attractive in August. In Industrials, note a pull for service business spending on cap-ex.

Losers: Clearly, there are issues of overconsumption/satiation playing out here. Apparel, Autos/Tires/Trucks and Home Furnishings/Appliances don't have any more lift in them, it appears lately. Consumer Discretionary is the big loser.

(1) Health Care remains the perennial Very Attractive sector. Medical Care is tops here, followed by Drugs.

Hot Stock #1:Wellcare Health ( WCG ) is a Zacks #1 Rank (STRONG BUY)

WellCare Health Plans, Inc . provides managed care services targeted exclusively to government-sponsored healthcare programs, focusing on Medicaid and Medicare.

(2) Info Tech remains Very Attractive. The Semiconductors lead the way again. Misc. Tech looks good too.

Hot stock #2: Qorvo ( QRVO ) is a Zacks #1 Rank (STRONG BUY)

Qorvo is a provider of technologies and RF solutions for mobile, infrastructure and aerospace/defense applications. The company operates through two subsidiaries: RF Micro Devices and TriQuint Semiconductor.

(3) Materials are Attractive. Metals-Non-Ferrous and Steel are leading the way now. Building Products/Construction Materials also looks good.

Hot Stock #3: Cliffs Natural ( CLF ) is a Zacks #2 Rank (BUY)

Cliffs Natural Resources , formerly Cleveland-Cliffs is an international mining company, a producer of iron ore pellets in North America and a supplier of metallurgical coal to the global steelmaking industry.

(4) Industrials are Market Weight. This was a noted sector UPGRADE. The Industrial Products-Services, Business Products and Business Services industries show the way. Cap-ex in service businesses are expanding.

(5) Energy stayed a Market Weight. The Oil E&P guys and Oil & Gas Integrated are doing well. The Drillers, Coal, and Energy-Alternates, and Oil Misc. are doing poorly. The recent WTI oil price decline to $40 and below is not good news.

(6) Telcos remain a Market Weight

(7) Utilities remain a Market Weight.

(8) Consumer Staples fell to Unattractive. Food/Drug Retail and Food, Soaps & Cosmetics, Beverages, all look poor. Agri-business looks terrible.

(9) Financials remain Unattractive. The best industries are Real Estate and Banks & Thrifts.

(10) Consumer Discretionary stayed at Very Unattractive. Apparel, Autos/Tires/Trucks and Home Furnishing/Appliances industries all looked poor.

This article is an excerpt fromJohn Blank's full Market Strategy report . To access the full PDF,click here .

The Zacks Rank is a truly marvelous trading tool. Our ranking system has beaten the S&P 500, yielding an average return of 25% per year for the last 29 years! 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 >>

Get today's Zacks #1 Stock of the Day with your free subscription to Profit from the Pros newsletter:

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.

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.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Click here to subscribe to this free newsletter today .

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros .

Follow us on Twitter: https://twitter.com/zacksresearch

Join us on Facebook: https://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

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.

Media Contact

Zacks Investment Research

800-767-3771 ext. 9339

support@zacks.com

https://www.zacks.com

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

RIO TINTO-ADR (RIO): Free Stock Analysis Report

TRIPADVISOR INC (TRIP): Free Stock Analysis Report

QORVO INC (QRVO): Free Stock Analysis Report

WELLCARE HEALTH (WCG): Free Stock Analysis Report

CLIFFS NATURAL (CLF): Free Stock Analysis Report

To read this article on Zacks.com click here.

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.

In This Story

TRIP RIO WCG QRVO CLF

Other Topics

Stocks