For Immediate Release
Chicago, IL – January 16, 2012 – Zacks Equity Research
highlights: Fastenal Company (FAST) as the
Bull of the Day and CNO Financial Group (CNO)
as the Bear of the Day. In addition, Zacks Equity Research provides
analysis on Apple Inc (AAPL), Google
Inc. (GOOG) and Hewlett-Packard
Company (HPQ).
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:
Fastenal Company (FAST) has been eyeing
profitable government projects in order to strengthen its position
in local markets. Moreover, the company has undertaken several
steps that will simultaneously upgrade its services and reduce
costs.
Its hub and spoke model and aggressive store expansion strategy
supported by an improving cash flow will also increase customer
satisfaction and benefit its business going forward. The company's
profits in the most recent quarter were in line with the Zacks
Consensus Estimate of $0.33 per share.
Therefore, we have upgraded our recommendation on the shares of
Fastenal from Neutral to Outperform. Our $55 target price, 39.6x
our 2012 EPS estimate, reflects this view.
Bear of the Day:
We are downgrading our recommendation on CNO
Financial Group (CNO) to Underperform based on the
continuous deterioration in the premium revenue of its Bankers Life
segment, coupled with the significant underwriting and pricing
risks. The company's third-quarter earnings results were driven by
poor top-line performance in most business segments.
The current interest rate environment, which is generating
spread compression, will continue to put pressure on the bottom
line. We do not expect any significant improvement on that front in
the forthcoming quarters as the pricing pressure is expected to
persist for awhile.
Our six-month target price of $5.75 equates to 7.9x our earnings
estimate for 2011. This price target implies an expected negative
total return of 10.9% over that period. This is consistent with our
Underperform recommendation on the shares.
Latest Posts on the Zacks Analyst Blog:
Decline in PC Shipments Continues
Personal computer (PC) shipments continue to struggle as
research firms Gartner and IDC reported a decline in PC shipments
for the fourth quarter of 2011. Gartner and IDC estimate 1.4% and
0.2% declines in worldwide PC shipments, respectively in the fourth
quarter.
Worldwide PC shipments for the fourth quarter were in the range
of 92 million and 93 million, as per Gartner and IDC. The adjusted
figures could be gathered from the PC makers, as the companies
release their quarterly reports in the coming weeks.
This decline in PC shipments is attributable to various factors,
the most important of them being the growing popularity of the
mobile devices that are more convenient, less expensive and almost
as powerful as PCs. The massive popularity of smartphones was
primarily responsible for the decline in PC sales.
In this regard, the iPhone needs a special mention
as Apple Inc’s. (AAPL) iconic device has
garnered a massive fan following since its launch in
2007. Google Inc.’s (GOOG) Android
operating system (used in more than 200 million smartphones across
the world) has also contributed to the popularity of smartphones,
which in turn has affected PC sales. This apart, with the advent of
tablets, which are becoming increasingly popular, PC sales have
further deteriorated. Global PC major Hewlett-Packard
Company (HPQ) leads the pack with 16.0% of the total
market share.
The problems for the PC manufacturers were aggravated by the
recent flood in Thailand, which disrupted the hard disk
manufacturing process for some time, leading to hard-disk drive
shortages, and thereby leading to a price increase, with a
corresponding pressure on margins. The increase in costs is
somewhat absorbed by the PC manufacturers, while the other part is
passed on to the consumers through price increases.
The greatest decline in PC shipments was reported in the US.
Both Gartner and IDC calculated a fourth-quarter PC shipment
decline of 5.0% to 6.0% in the US, which is the biggest fall in PC
shipments in the last decade.
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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Continuous analyst coverage is provided for a universe of 1,150
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APPLE INC (AAPL): Free Stock Analysis Report
CNO FINL GRP (CNO): Free Stock Analysis Report
FASTENAL (FAST): Free Stock Analysis Report
GOOGLE INC-CL A (GOOG): Free Stock Analysis Report
HEWLETT PACKARD (HPQ): Free Stock Analysis Report
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