Health & Fitness
Health and Fitness
Health and Fitness
Tue, May 18, 2010
Mon, May 17, 2010 ZOLL Medical, Tower Group, Macya?s, Nordstrom and Best Buy
CHICAGO--([ BUSINESS WIRE ])--[ Zacks Equity Research ] highlights ZOLL Medical Corporation (Nasdaq: [ ZOLL ]) as the Bull of the Day and Tower Group (Nasdaq: [ TWGP ]) the Bear of the Day. In addition, Zacks Equity Research provides analysis on Macya™s (NYSE: [ M ]), Nordstrom (NYSE: [ JWN ]) and Best Buy (NYSE: [ BBY ]).
Full analysis of all these stocks is available at [ http://at.zacks.com/?id=2678 ].
Here is a synopsis of all five stocks:
[ Bull of the Day ]:
ZOLL Medical Corporation's (Nasdaq: [ ZOLL ]) second quarter fiscal 2010 earnings of $0.17 per share surpassed the Zacks Consensus Estimate by $0.04. The better-than-expected results were driven by the strong showing of its LifeVest business and inclusion of its temperature management business.
We are pleased with the company's wide range of products. Its significant international presence should also drive growth.
ZOLL has made multiple acquisitions in the past which have aided growth and the company is looking for more such opportunities. Consequently, we upgrade the stock to Outperform with a target of $38.
[ Bear of the Day ]:
We are downgrading our recommendation on Tower Group (Nasdaq: [ TWGP ]) to Underperform. Tower Group is embarking on an aggressive geographic expansion plan at a time of intensifying competition and rate softening in the broader property-casualty market. Entering several new markets poses uncertainty, and we are concerned that the company could under-price unfamiliar risks.
Tower generates a substantial portion of its revenues from the Northeast United States, an area which is significantly prone to catastrophes. It has incurred losses from the recent catastrophes in this area.
Our six-month target price of $21.00 equates to about 7.4X our earnings estimate for 2010. We view the $0.28 per share annual dividend as secure, implying a negative total return of about 8.0% over that period.
Latest Posts on the Zacks [ Analyst Blog ]:
Weakness Behind Retail Numbers
This morning, the U.S. Census Bureau reported retail sales for April. The headline number looks pretty solid.
Seasonally adjusted retail sales were $366.4 billion, up 0.4% from March and 8.8% from April 2009 (which is against really low comps). Economists were expecting a monthly increase of 0.2%. The March number was revised higher to 2.1% from 1.9%.
When we dig a little deeper, however, the report isna™t as strong as the headline suggests.
Driving the Aprila™s gains were building materials, which increases $1.5 billion, or 6.9%, to $25.5 billion. Autos were up 0.5%; gasoline stations were up 0.5%, and drug stores increased 0.9%.
Growth in those areas masked weakness in other categories. Electronics and restaurants were flat. However, furniture was down 1.2%; grocery stores fell 0.5%; apparel stores were down 0.9%; sporting goods dropped 1.4%; and general merchandise stores fell 0.4%. If we combine these categories (i.e., sales ex-autos, building materials, and gas stations), retail sales decreased 0.2%.
Thata™s the first decline since December 2009 for core retail sales. Going forward, it is hard to believe that we will continue to see retail sales growth driven by building materials and autos. Growth will need to come from core retail stores like department stores, grocers and electronics stores.
In order for that to play out, we need to see more jobs and higher incomes. That will put more money in the pockets of consumers, allowing them to make more frequent visits to retail stores such as Macya™s (NYSE: [ M ]), Nordstrom (NYSE: [ JWN ]), or Best Buy (NYSE: [ BBY ]).
Get the full analysis of all these stocks by going to [ http://at.zacks.com/?id=2649 ].
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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