CHICAGO, Aug. 7, 2013 /PRNewswire/ -- Zacks Equity Research highlights Lithia Motors (NYSE:LAD-Free Report) as the Bull of the Day and Kraton Performance Polymers (NYSE:KRA-Free Report)as the Bear of the Day. In addition, Zacks Equity Research provides analysis ontheThe Blackstone Group L.P. (NYSE:BX-Free Report), Credit Suisse Group AG (NYSE:CS-Free Report) and BlackRock, Inc. (NYSE:BLK-Free Report).
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Here is a synopsis of all five stocks:
Lithia Motors (NYSE:LAD-Free Report) recently delivered its 14th consecutive positive earnings surprise, driven by a double-digit increase in both new and used vehicle sales.
Management also raised its guidance for the remainder of 2013, prompting analysts to revise their estimates significantly higher. This sent the stock to a Zacks Rank #1 (Strong Buy).
Although shares of Lithia Motors have had a spectacular run, with shares trading at a reasonable 16x forward earnings, this stock appears to have plenty of gas left in the tank.
Lithia Motors is the 9th largest automotive retailer in the United States with 91 stores in 11 states. It sells 27 brands of new vehicles and all brands of used vehicles.
Lithia reported excellent second quarter results on July 24. Adjusted earnings per share jumped 42% to $1.05, beating the Zacks Consensus Estimate by 13 cents. It was the company's 14th consecutive positive earnings surprise.
Revenue soared 23% to $1.009 billion, ahead of the consensus of $986.0 million. Both new and used vehicle same store sales rose 19% as the automotive sector continues to recover from the depths of the Great Recession.
Kraton Performance Polymers (NYSE:KRA-Free Report) recently reported its 3rd straight earnings miss, prompting analysts to revise their estimates significantly lower for both 2013 and 2014. This sent the stock to a Zacks Rank #5 (Strong Sell).
Despite the negative earnings momentum, shares of Kraton still trade at a premium to their peers on a forward P/E basis. Investors may want to wait for earnings momentum to turn around before establishing a long position.
Kraton Performance Polymers produces engineered polymers that are used in a variety of products, such as adhesives, coatings, consumer and personal care products, sealants and lubricants, and medical, packaging, automotive, paving, roofing and footwear products.
Kraton Performance Polymers reported disappointing second quarter results on July 31. Adjusted earnings per share fell -67% year-over-year to 15 cents, missing the Zacks Consensus Estimate by 9 cents. It was the company's 3rd consecutive earnings miss.
Sales were down -11% to $334.5 million, well below the consensus of $363.0 million. The decline was driven mostly by lower butadiene prices as overall volumes were essentially unchanged. The 'Paving & Roofing' end market saw the biggest revenue drop at -19% thanks in part to wet weather. Meanwhile, the gross profit margin fell 166 basis points to 17.9% of sales.
Additional content:
Blackstone Acquires Strategic Partners
The Blackstone Group L.P. (NYSE:BX-Free Report) recently completed the acquisition of Strategic Partners from Credit Suisse Group AG (NYSE:CS-Free Report). In Apr 2013, Blackstone had entered into a deal with Credit Suisse wherein it had agreed to buy Strategic Partners, the latter's secondary private equity business with assets under management (AUM) worth $10 billion.
Blackstone has been on an expansion spree for quite some time and the recent acquisition comes in line with the company's strategy to increase its product base worldwide. Notably Blackstone's inorganic growth can be traced back to Nov 2012, when it closed the acquisition of Vivint Inc, a security provider, offering home automation and technology services.
Earlier, in the same month, Blackstone Capital Partners V, L.P − a private equity fund managed by Blackstone – announced the completion of the acquisition of GCA Services Group from Nautic Partners, L.L.C. and other minority shareholders. In Sep 2012, Blackstone had reached an agreement with real estate finance company Capital Trust, Inc. to acquire the latter's investment unit.
The divestment of Strategic Partners will, on the other hand, help Credit Suisse focus on its core business and prudent cost management. Notably, in line with its ongoing business streamlining process, Credit Suisse sold its European exchange traded funds (ETF) business to BlackRock, Inc. (NYSE:BLK-Free Report) on Jul 1, 2013.
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