CHICAGO, Sept. 8, 2014 /PRNewswire/ -- Zacks Equity Research highlights VASCO (Nasdaq:VDSI-Free Report) as the Bull of the Day and Smith & Wesson (Nasdaq:SWHC-Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis onBonanza Creek Energy Inc. (NYSE:BCEI-Free Report), Matador Resources Company (NYSE:MTDR-Free Report) and Penn Virginia Corporation (NYSE:PVA-Free Report).
Here is a synopsis of all five stocks:
It doesn't take private photos of Jennifer Lawrence being leaked on the internet for the public to recognize the need for cyber security. Each day more and more data is transferred between consumers and businesses alike via the internet. Keeping this information private between parties is paramount in many cases. Sometimes though, that data enters the wrong hands and it can be very damaging. Today's Bull of the Day is a company that seeks to minimize data theft by advancing their authentication technologies.
VASCO (Nasdaq:VDSI-Free Report) is a global leader in strong authentication, digital signatures, and identity management solutions specializing in securing financial transactions and protecting access to data and applications. The company was listed on the NASDAQ in 1997 and is a leader in Gartner Magic Quadrant for user authentication. This growth company had a 21% CAGR in revenues from 2003 to 2013 and has been on a streak of 46 consecutive quarters of profitability.
VDSI counts more than 10,000 customers in over 100 countries. More than half of the top 100 global banks and 1,700 financial institutions rely on VASCO. They offer on premise, mobile, and cloud based solutions.
Now is as good a time as any to invest in the cyber security market. Data breaches are up 30% year over year and the industry has a CAGR forecast of 14% through 2019. Two out of three cyber-attacks focus on login credentials at some point in the attack. Authentication and a digital signature platform provide protection against these attacks and the newest attacks such as Heartbleed, Emmental, and others.
The enormous opportunity in this market is only part of the reason for the Zacks Rank #1 (Strong Buy) this stock has. A big part of it is the company's earnings history and the consistent surprises they've enjoyed recently. Each of the last four quarters VDSI has surprised to the upside, with an average surprise of 10 cents.
Gun control. Conceal and carry. Some of the most hotly debated political issues out there right now. I'm not in the business of politics. I'm in the business of making money in the stock market. And when I find a company that's misfiring I try to tell investors to steer clear of it. Not for any underlying political stance I have on an issue. Trust me, I could care less. But in the case of today's Bear of the Day, you may want to put on some Skynyrd and get back your bullets.
Smith & Wesson (Nasdaq:SWHC-Free Report) is a Zacks Rank #5 (Strong Sell) that has been stinking up the place recently. It's not just the chart that leaves something to be desired, but the earnings revisions to the downside that are really burying this one. Frustrating for investors who enjoyed a big rally in the first half of the year.
Smith & Wesson has a vision of being the leading firearms manufacturer in the world. The name carries a lot of weight as the company has been around since 1852. Headquartered in Springfield, MA, SWHC has 1,700 employees. They are a huge player in the consumer and professional firearms markets.
But the last quarterly report is what has put this gun maker back into the holster. Year over year sales were down 22.9%. Long gun sales were responsible for 87% of the sales decline. Handgun sales fared much better, losing only 3.2% year over year. It's not just the sales numbers but also the margins that suffered. Gross margin fell from 42.6% to 37.2%.
One bit of good news for SWHC was the jump in new shooters. Nearly 11% of people that have been sport shooting in 2012 were beginners. And a handgun usually isn't the kind of thing you only buy one of. Nearly 90% of handgun owners own multiple firearms with an average of 8 handguns per owner. Nearly 25% of first-time buyers buy at least one more firearm with the first year after their first purchase.
Yet analysts remain unimpressed. Four analysts have dropped their earnings estimates for the current quarter, next quarter and the current year. This has dropped consensus for the current quarter from 28 cents all the way down to 7. The current year numbers look even worse, with consensus going from $1.42 per share to 91 cents.
Additional content:
3 Oil E&P Stocks to Dump Now
The prospects of oil exploration and production (E&P) companies are largely tied to crude prices. The persistent weakness seen in crude pricing is sure to have an adverse effect on the earnings of oil E&P firms.
Drop in Crude Prices
Starting from August, crude has been trading significantly below the major psychological threshold of $100 per barrel. In fact, West Texas Intermediate (WTI) crude price closed at $92.88 per barrel earlier this week, the lowest level since Jan 2014. This leads to the obvious question of what is keeping oil prices so low.
Oversupply: While looking at the supply side, we see that domestic crude oil production is now at the highest level since 1987. Crude inventories have ballooned to 360.5 million barrels, thereby creating a supply glut.
Reduced Global Demand: Weak Chinese and European economic data have lowered the demand for oil from the refiners in these regions.
Strong U.S. dollar: A stronger dollar is also one of the reasons for the fall in crude oil prices. The dollar touched its highest level against yen this year. Strength in the dollar makes import costly, so demand falls.
EIA's Projection for Crude to Remain Low
Energy Information Administration (EIA), which provides official energy statistics from the U.S. Government, in its most recent Short-Term Energy Outlook, projected global oil demand to grow by 1.1 million barrels per day in 2014 from the 2013 level. On the other hand, the global supply is expected to increase by 1.5 million barrels per day in 2014. This will create excess supply, which will keep prices under pressure.
Stocks to Remove from Your Basket
As the pricing environment appears to remain soft for the rest of 2014, the primary business of the crude oil E&P companies will remain under pressure. So it will be prudent decision to get rid of some bottom-ranked stocks in this space if you are already holding them. Otherwise, you should stay away from these stocks as they may witness downside in the near term.
Here are three such stocks:
Bonanza Creek Energy Inc. (NYSE:BCEI-Free Report)
The Denver, CO-based upstream firm engages mainly in the exploration, production and development of oil and gas resources located in the state and Southern Arkansas.
Bonanza Creek carries a Zacks Rank #5. The company has also witnessed downward estimate revisions over the last 30 days. Bonanza Creek looks overvalued too, as it trades at a price-to-book ratio (P/B) of 3.4 against the industry average of 1.6.
Matador Resources Company (NYSE:MTDR-Free Report)
The Dallas, TX-based upstream energy firm is primarily involved in exploration, production and development of oil and natural gas assets located in the U.S. Currently, the company is operating mainly in the Eagle Ford shale play and Permian Basin, both of which are liquid rich recourses.
Presently, the stock holds a Zacks Rank #4. The forward price-to-earnings ratio (P/E) of the stock is 20.3x, higher than the industry average of 18.5x.
Penn Virginia Corporation (NYSE:PVA-Free Report)
The Radnor, PA-based company's principal operations include exploration, production and development of liquid and natural gas resources located onshore U.S. As of Dec 31, 2013, the company's total proved reserve stood at roughly 136 million barrels of oil equivalent.
The upstream firm carries a Zacks Rank #4 and has witnessed downward estimate revisions over the last 30 days.
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