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Chicago, IL - April 21, 2016- Zacks Equity Research highlights West Marine, Inc. ( WMAR ) as the Bull of the Day and Agrium Inc. ( AGU ) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Verizon Communications Inc. ( VZ ), Yahoo! Inc. ( YHOO ) and Facebook Inc. ( FB ).
Here is a synopsis of all five stocks:
West Marine, Inc. ( WMAR ) is bucking the negative retail trend. This Zacks Rank #1 (Strong Buy) is expected to grow earnings by the double digits in Fiscal 2016.
West Marine is a specialty retailer in the world of water with 260 stores in 38 states and Puerto Rico and an e-commerce website. It also sells wholesale to professional customers.
Its customers include cruisers, sailors, anglers and paddlesports enthusiasts. It sells marine paints, shoes, apparel and other accessories, guidance systems, safety products and other water craft accessories.
Fiscal 2015 Sales Up
On Feb 25, West Marine reported fourth quarter and full year fiscal 2015 results. It beat on the fourth quarter reporting a loss of $0.45 versus the Zacks Consensus of a loss of $0.47.
Sales for the year rose 4.3% in the 53-week period, compared to a gain of 5.4% in the 52-week period of fiscal 2014.
Excluding the extra week, same store sales rose 6% in Fiscal 2015.
Sales from the website rose 32.5% year over year and is now 9.5% of total sales, up from 7.7% for the same period a year ago.
It has a goal of seeing 15% of total sales from its website so it's making good progress towards that goal.
Sales through its stores, however, actually rose to 45.7% of total sales, from 41% a year ago. It has been trying to optimize sales at its stores by focusing on core boating products at those locations.
In fiscal 2015, core product sales were up 2.8% year over year while some of its expansion categories such as footwear and apparel, fishing products and paddlesports equipment were up 16.4%.
West Marine also outperformed the rest of the retail industry over the holiday season as holiday same store sales rose 9.4%.
Agrium Inc. ( AGU ) is struggling as fertilizer prices remain weak. This Zacks Rank #5 (Strong Sell) is expected to see declining earnings again in 2016.
Agrium produces all three major fertilizers, including nitrogen, phosphates and potash. It is also a retail supplier of agricultural products such as crop protection and seeds in North America, South America and Australia.
It's headquartered in Calgary.
A Fourth Quarter Beat
On Feb 9, Agrium reported its fourth quarter results and beat the Zacks Consensus by $0.03. Earnings were $1.43 compared to the Zacks Consensus of $1.40.
It was the second highest fourth quarter results on record, boosted by strong wholesale performance.
But continued falling fertilizer prices are hurting even though the retail side of the business provides some cushion.
Still, in 2015, the company generated $8.59 per share of free cash flow. It pays a healthy dividend of $3.50 per share, which is yielding 4.2%.
Analysts Gloomy About 2016
In February, the company gave a broad earnings guidance range for 2016 of $5.50 to $7.00.
Analysts have grown gloomier since then and have been lowering estimates.
3 estimates were lowered for 2016 in the last week with 2 lowered for 2017 in that time.
The Zacks Consensus Estimate has plunged to just $6.09 from $7.51 three months ago. $6.09 is still within the company's February guidance range, but it is edging towards the lower end of that range now.
Agrium is expected to see an earnings decline of 12.8% this year.
Additional content:
Verizon: Is a Yahoo Buyout in the Cards?
According to a report by The Wall Street Journal, U.S. telecom behemoth Verizon Communications Inc. ( VZ ) is currently the frontrunner to acquire the core assets of Yahoo! Inc. ( YHOO ). Apart from Verizon, private equity firm TPG Capital LP and Yellow Pages owner YP LLC are the other two suitors of Yahoo's web businesses. But Verizon appears to be best suited to merge Yahoo into its online platform.
Internet-based information service provider giant Yahoo is currently struggling with its core businesses namely mail service, online sports, financial and general news sections and its vital online advertising technology, which includes the video advertising platform, BrightRoll. In Feb 2016, Yahoo stated that it would consider "strategic alternatives" for its core businesses, including an outright sale or a spin off.
In the event of the deal materializing, we believe it will largely be beneficial for Verizon. Since the beginning of 2015, the company has been focusing on mobile video offerings, online digital advertising and web-based content business as a diversification strategy.
In Oct 2015, Verizon launched its ad-supported mobile video service Go90 targeting the younger generation. To derive maximum benefits from its mobile video platform, in Jun 2015, the company took over AOL Inc. that provides advertising technology enabling automated buying and selling of ads online.
In addition to online advertising tools, AOL provides popular online content through Huffington Post which has around 200 million unique visitors worldwide. Other websites include Tech Crunch, Engadget, Moviefone and MapQuest.
In Oct 2015, Verizon also acquired Millennial Media, a leading company that sells mobile ads across numerous websites and applications. Its advertising platform is designed to monetize applications for publishers and developers through the use of data-driven ad targeting.
The core businesses of Yahoo perfectly complement Verizon's focus areas. Notably, Yahoo boasts a significant user base that trails only Google and Facebook Inc. ( FB ). At present, Yahoo has more than 1 billion users for its e-mail, finance, sports and video sites, AOL has 2 million users and Verizon commands over 112 million wireless subscribers.
If the deal takes place, Yahoo's online ad technology and popular content will be combined with AOL's targeted ad technology and consumer data platform and integrated into Verizon's massive subscriber base and Internet-based mobile video offering to provide a powerful data-driven targeted mobile ad platform.
Verizon is currently focusing on online content delivery, mobile video and online advertising for future growth. These businesses have the potential to generate significant revenues for the company, especially given that its legacy telecom business is presently facing serious pricing competition. According to market research company eMarketer, the global mobile ad market value is expected to reach $ $133.7 billion by 2017.
The acquisitions of AOL and Millennial Media have enabled Verizon to sell digital media services to large companies and social media firms by leveraging its massive wireless customer base. With an Internet giant like Yahoo in its kitty, Verizon can potentially gain a strong and extensive foothold in the global online content and advertising market.
Both Verizon and Yahoo currently carry a Zacks Rank #4 (Sell).
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WEST MARINE INC (WMAR): Free Stock Analysis Report
AGRIUM INC (AGU): Free Stock Analysis Report
VERIZON COMM (VZ): Free Stock Analysis Report
YAHOO! INC (YHOO): Free Stock Analysis Report
FACEBOOK INC-A (FB): Free Stock Analysis Report
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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.
