CHICAGO, Dec. 17, 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 theKohlberg Kravis Roberts & Co. L.P. (NYSE:KKR-Free Report), The Goldman Sachs Group, Inc. (NYSE:GS-Free Report), Dollar General Corporation (NYSE:DG-Free Report), Barclays PLC (NYSE:BCS-Free Report) and Delta Air Lines Inc. (NYSE:DAL-Free Report).
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Here are highlights from Monday's Analyst Blog:
KKR, Goldman Sell Stake in Dollar General
Last week, Wall Street Journal reported that private equity (PE) arms of Kohlberg Kravis Roberts & Co. L.P. (NYSE:KKR-Free Report) and The Goldman Sachs Group, Inc. (NYSE:GS-Free Report) have exited their remaining stake in the discount retailer, Dollar General Corporation (NYSE:DG-Free Report). KKR and Goldman sold their aggregate 4.2 million shares for $60.71 per share.
The sale price was roughly three times Dollar General's initial public offering (IPO). As an underwriter to the deal, Barclays PLC (NYSE:BCS-Free Report) purchased these shares and then offered them to the retail investors.
Notably, in Jul 2007, a group of investors including affiliates of KKR, Goldman and Citigroup Inc. had acquired Dollar General for $7.3 billion in an all-stock deal. This turned Dollar General into a private firm. However, in Aug 2009, Dollar General announced an IPO and turned into a publicly traded company again.
Since then, these PE investors have been offloading their stake in Dollar General from time to time. The last disposition was in March this year, when KKR and Goldman sold their interests for $1.75 billion.
With shares of Dollar General trading near its 52-week high, we believe it was the right time for KKR and Goldman to sell their stakes and maximize returns from their investments. Further, on Friday's (Dec 13, 2013) closing price of $60.48, Dollar General's shares reflected a year-to-date return of roughly 40.9%.
Further, given the recent rally in equity market, more such exits by PE firms will likely occur going forward. This will enable these PE firms to reap profits from their investments and utilize the cash generated to invest in other companies.
Currently, KKR carries a Zacks Rank #1 (Strong Buy), while Goldman holds a Zacks Rank #3 (Hold).
Delta to Fly BCS Fans to Bowl Games
In an attempt to attract the supporters of college football's Bowl Championship Series (BCS), mega airline carrier Delta Air Lines Inc. (NYSE:DAL-Free Report) has added numerous flights to the cities hosting the BCS bowl games. The BCS bowl games take place the first week of January 2014.
Notably, the Bowl Championship Series includes five bowl games in NCAA Division 1 Football. Competing for the championship early next year will be the Florida State Seminoles and the Auburn Tigers at the Rose Bowl in Pasadena, CA on January 6th.
Delta wants to draw the travelling supporters and will launch different flights between Los Angeles, Tampa, Alabama, Atlanta, Detroit, New Orleans and Oklahoma, to name a few. While fans across the major part of the nation will benefit from Delta's expanded network, the carrier too will enjoy brisk business.
Delta expects a surge in its 2013 profits from these added flights. The company estimates pre-tax profits, excluding special items, to shore up 70% year over year to $2.6 billion this year. Further, it also foresees its debt position to decline to $9.6 billion in 2013 from $11.7 billion in 2012.
The airline carrier also expects revenues of $40 billion in 2014. Further, the rating firm, Moody's Investors Service recently upgraded Delta's outlook from stable to positive on margin growth and improvement of leverage position in 2013. These positives lead us to maintain a bullish stance on the company.
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
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