For Immediate Release
Chicago, IL – May 24, 2016 – Zacks Equity Research highlightsHasbro (NASDAQ:HAS) (HAS) as the Bull of the Day and Advanced Auto Parts (AAP) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on BASF SE (DE:BASFN) (BASFY),Valeo (PA:VLOF) SA ADR (VLEEY) and Enbridge (ENB).
Here is a synopsis of all five stocks:
Hasbro (HAS) provides children’s and family leisure time products and services worldwide. The company operates through U.S. and Canada, International, Entertainment and Licensing, and Global Operations segments. Its brands include Playskool, Tonka, Super Soaker, Milton Bradley, Parker Brothers, Tiger, and Hasbro Interactive. Some of its popular games and products include Monopoly, Twister, Connect 4, Scrabble, Jenga, The Game of Life, Operation, Play-Doh, and Nerf.
Hasbro’s diversified toy and game product line has brought earnings momentum to the company and helped the stock become one of the best performers of 2016, up over 25%. The company recently became a Zack Rank #1 (Strong Buy) making it the Bull of the Day.
Fundamentals
Hasbro has a market cap of $10.5 Billion with a Forward PE of 20. The stock sports a Zacks Style Score of “A” in Growth and has of VGM score of “B”. The company has an expected 3-5 year growth rate just above 13% and it pays a dividend yield of 2.42% while you wait for that growth.
Relative Strength
Over the last two years Hasbro has outperformed, returning almost 70% verse just under 10% for the S&P 500. The combination of growth and a strong of earnings beats have led to the stock surge, but the driver has been the company’s ability to capitalize on hot toy markets.
Advanced Auto Parts (AAP) engages in the automotive replacement parts, accessories, batteries, and maintenance items for domestic and imported cars, vans, sport utility vehicles, and light and heavy duty trucks. The Virginia based company is now a Zacks Rank #5 (Strong Sell) after a recent EPS miss.
The company has a market cap of $10.7 Billion and has a Forward PE of 16. The stock sports a Zacks Style Scores of “C” in Growth, Value and Momentum. The company has 3-5 year growth rate of 11.55% and dividend yield of 0.16%.
Earnings
Q1 earnings came in at $2.51 verse the $2.61 expected. The company cut fiscal year same store sales to -5% versus a -3% expected. Advanced Auto also announced it will no longer target adjusting operating income of 12% for 2016. In addition, the company’s CFO will be leaving the company.
The stock reacted negatively to the news selling off almost 10% to February lows. However, investors and perhaps short sellers bought the stock back up to unchanged level. After making a 2016 high at $165 in early April, the stock now sits in a vulnerable spot under the $150 level. The earnings momentum is bringing sellers into the stock and another break of the $130 level could lead to long term investors dumping the stock.
Estimates
Over the last 60 days, the company has seen estimates fall for both fiscal year 2016 and 2017. For the current year we have seen a 5.7% revision lower from $10.01 to $9.43. For next year, estimates have fallen 5.2%, from $8.93 to $8.46.
These numbers are also reflected in the next couple quarters as well. If the company misses when it next reports in June the stock will be in danger of new 2016 lows.
Additional content:
Japan’s 20-Year Cycle Takes the Global Stage for G7
This Global Week Ahead ends with a 2-day meeting of G7 leaders in Ise-Shima Japan. According to the Government of Japan’s website, G7 leaders will discuss:
Global Economy & Trade (global growth)
Foreign Policy (Middle East, Ukraine, and North Korea)
Climate Change & Energy
Development (Japan hosts the 6th annual Tokyo International Conference on African Development in August)
Quality Infrastructure Investment
Health (public health emergencies like Ebola)
Women
Aides to President Obama also set up, at least half a year ago, a visit to nearby Hiroshima, Japan. That visit happens this Friday – in advance of the official G7 visit to Shima. The President’s visit will make him the first sitting U.S. head of state to set foot in the city devastated by an atomic bomb (in August 1945).
The U.S. State Department hopes Obama’s Friday, May 27th Hiroshima visit will become part of his diplomatic legacy. It will symbolize his pursuit of a nuclear-free world and the maturation of Japan-U.S. relations.
As a backdrop to these important G7 prime minister meetings, be aware. The Shima Peninsula (志摩半島, Shima Hantō) is home to Japan's most sacred Shinto religious shrines, the Ise Shrines.
The peninsula has been designated as Ise-Shima National Park given its natural beauty and cultural importance. Shima has evolved into a resort area popular with Japan’s nearby urban populations in the cities of Nagoya and Osaka.
Trees and stones have long been objects of deep devotion in Japan. Originally there were no shrine buildings at sacred locales like Shima. Instead a tree, forest, a large boulder, or a mountain — festooned with ropes — would be the focus of worship.
Nature worship was then ported to a set of buildings. The Ise Grand Shinto nature shrine is one of the grandest. It consists of two groups of wood buildings — Naiku and Geku.
Here’s an amazing fact:
Every twenty years , Japanese Shinto priests totally rebuild the two 1300 year-old shrines to nature on an adjoining site. The idea? To directly experience once-in-a-generation renewal.
Let’s hope a tone of renewal plays out for Japan’s economy and the world’s economy across the rest of 2016 and into 2017. Global indicators out this week look helpful in that regard.
The best-looking Zacks #1 Rank (Strong Buy) global stocks over the weekend included:
BASF SE (BASFY), the German diversified chemicals giant with a $69 billion market capitalization. The Zacks VGM score is B (Buy) Rating.
Valeo SA ADR (VLEEY), the Paris, France-based auto-truck component maker with an $11.7 billion market capitalization. It has 4 Business Groups: Powertrain Systems, Thermal Systems, Comfort and Driving Assistance Systems, and Visibility Systems. The Zacks VGM score is a B (Buy) rating.
Enbridge (ENB), the Canadian oil-products/pipeline company with a $37 billion market capitalization. It operates the world’s longest crude oil and liquids pipeline. The Zacks VGM score is also a B (Buy) rating.
In the global week ahead, both Germany and France should see improvement in their respective manufacturing PMIs. Better macro data will be fully consistent with the fresh high Zacks #1 ranks tied to Germany’s BASF and France’s Valeo.
Oil prices should keep climbing towards $50 a barrel, in part on stronger seasonal gasoline demand this summer. This helps Canada’s Enbridge ship more oil down its pipelines.
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HASBRO INC (HAS): Free Stock Analysis Report
ADVANCE AUTO PT (AAP): Free Stock Analysis Report
BASF SE (BASFY): Free Stock Analysis Report
VALEO SA-ADR (VLEEY): Free Stock Analysis Report
ENBRIDGE INC (ENB): Free Stock Analysis Report
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