CHICAGO, Nov. 25, 2013 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Buffalo Wild Wings Inc. (Nasdaq:BWLD-Free Report), Charter Communications Inc. (Nasdaq:CHTR-Free Report), Time Warner Cable Inc. (NYSE:TWC-Free Report), Liberty Media Corp. (Nasdaq:LMCA-Free Report) and Cablevision Systems Corp. (NYSE:CVC-Free Report).
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Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Friday's Analyst Blog:
Buffalo Wild Wings Upped to Outperform
On Nov 21, we upgraded our recommendation on Buffalo Wild Wings Inc. (Nasdaq:BWLD-Free Report) from Neutral to Outperform based on better-than-expected earnings growth and solid top line in the third quarter of 2013. Moreover, Buffalo Wild Wings carries a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
The restaurateur has been consistently posting strong quarterly results for the past two quarters, driven by its cost-saving efforts.
In its recently concluded third-quarter 2013 results, Buffalo Wild Wings beat the Zacks Consensus Estimate for both revenues and earnings. Quarterly earnings also grew 66.7% year over year. Results in the quarter benefited from decent top-line growth and margin expansion. Total revenue also increased 27.9% year over year, led by increased restaurant sales and solid unit growth.
Following a better-than-expected performance in the third quarter, the company increased its earnings guidance for 2013. Buffalo Wild Wings now expects net earnings to grow 20% in 2013, higher than the prior estimate of 17%.
After the release of the third-quarter results, the Zacks Consensus Estimate for 2013 has gone up 3.0% to $3.75 per share during the past 30 days. Similarly, the Zacks Consensus Estimate for 2014 improved 5.2% to $4.69 per share during the same time frame.
Reason for Positive Bias
Along with the strong third-quarter results, the company's growth story looks attractive. Operating since 1982, Buffalo Wild Wings is considered as one of the most familiar casual dining restaurant chains in the U.S., especially among the sports fans.
Amid macroeconomic difficulties and highly competitive markets, the company has been posting positive comparable store sales (comps) for the past nine quarters, which validates its strong fundamentals.
The company has taken various initiatives like aggressive marketing program, menu launches and guest experience business model to reinvigorate its potential as a brand. Buffalo Wild Wings' collaboration with National Collegiate Athletic Association helps it to increase its visibility as a brand and attract customers through digital and social media. Foray into the smaller prototype restaurants, PizzaRev, is also a positive for the stock.
Is Time Warner Up for Sale?
The Wall Street Journal recently reported that cable TV operator Charter Communications Inc. (Nasdaq:CHTR-Free Report) is striving to reach an agreement with several banks to raise funds in order to acquire Time Warner Cable Inc. (NYSE:TWC-Free Report).
This announcement has reignited the six-month old rumor in the cable TV industry. Earlier this month, Reuter also reported that Charter Communications is considering another bid for Time Warner Cable before the end of 2013.
The news of a proposed merger between Charter Communications and Time Warner Cable first surfaced after Liberty Media Corp. (Nasdaq:LMCA-Free Report) acquired a 27.3% stake in Charter Communications for a total consideration of $2.617 billion. Liberty Media is aggressively pursuing the idea of Charter Communications acquiring a major cable TV operator in the U.S., such as Time Warner Cable.
Nevertheless, Time Warner Cable rejected the earlier acquisition attempt by Charter Communications. Earlier this year, Charter Communications acquired Cablevision Systems Corp.'s (NYSE:CVC-Free Report) western U.S. cable systems unit, Optimum West, for around $1.6 billion in cash.
A recent analysis by Leichtman Research Group Inc. revealed that the cable TV operators in the U.S. are gradually losing hold in the pay-TV market. Internal dynamics of the pay-TV market is slowly shifting toward fiber-based video offerings of large telecom and satellite TV operators. Video offering is the core business area of the cable TV operators, which is slipping out of their hands.
Leichtman also stated that the top nine U.S. cable TV operators had a net loss of 600,643 pay-TV customers in the third quarter of 2013. This was cable TV industry's biggest net loss after the third quarter of 2010. Time Warner Cable lost a whopping 306,000 residential pay-TV subscribers in the said quarter.
At this juncture, consolidation in the cable TV industry may become a logical conclusion. The U.S. telecom sector is witnessing massive consolidation drive in order to attain sufficient spectrums and economies of scale.
Meanwhile, Time Warner Cable recently stated that before finalizing any deal, the company will thoroughly evaluate whether the deal will add sufficient value to its investors. Currently, both Time Warner Cable and Charter Communications have a Zacks Rank #3 (Hold).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
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