CHICAGO, Aug. 3, 2011 /PRNewswire/ -- Zacks Equity
Research highlights Lincoln Electric Holdings, Inc. (Nasdaq:
LECO) as the Bull of the Day and Cincinnati Financial
(Nasdaq: CINF) as the Bear of the Day. In addition, Zacks Equity
Research provides analysis Archer Daniels Midland Company
(NYSE: ADM), Bunge Limited (NYSE: BG) and Corn Products
International Inc. (NYSE: CPO).
(Logo: http://photos.prnewswire.com/prnh/20101027/ZIRLOGO)
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:
Lincoln Electric Holdings, Inc. (Nasdaq: LECO) recently
reported its fiscal 2011 second quarter results delivering an
adjusted EPS of $0.68 versus
$0.39 in the year-over-year quarter.
Total revenue, as reported by the company, increased 35.6% year
over year to $699.3 million.
Lincoln Electric is pursuing a multi-year strategy to become
more cost competitive by building manufacturing facilities in
Eastern Europe and Asia besides acquiring companies complementing
Lincoln's operations elsewhere in
the world. Lincoln forayed into
the Russian market with the acquisition of Mezhgosmetiz-Mtsensk OAO
and OOO Severstal-metiz.
In addition, Lincoln acquired
number of welding companies in North
America. These acquisitions will expand Lincoln's presence across the globe. Thus, we
reiterate our Outperform recommendation with a target price of
$41.00.
Bear of the Day:
We are downgrading our recommendation on the shares of
Cincinnati Financial (Nasdaq: CINF) following the
wider-than-expected operating loss reported by the company in
second quarter 2011 owing to huge cat losses. Moreover, the
Commercial Lines segment will remain somewhat weak due to the
sluggish economy, although the decline in business is
moderating.
The company is expected to face limited investment growth due to
continued low yields for investment options. We expect pressure on
top line until the soft insurance market cycle turns
completely.
Our six-month target price of $25.00 equates to about 42.4x our earnings
estimate for 2011. We view the $1.60
per common share annual dividend as secure, implying a negative
return of about 4.7% over that period. This is consistent with our
Underperform recommendation on the shares.
Latest Posts on the Zacks Analyst Blog:
ADM EPS Dented by Higher
Taxes
Archer Daniels Midland Company (NYSE: ADM) reported a
disappointed fourth-quarter 2011 results. Net income for the
reported quarter was $381.0 million
or 58 cents per share compared with
$446.0 million or 69 cents per share in the year-ago quarter.
Quarterly earnings also missed the Zacks Consensus Estimate of
84 cents a share.
Earnings in the reported quarter declined primarily due to a
robust rise in income tax rate, partially offset by increased
segmental profit and positive discrepancy from changes in
Last-In-First-Out (LIFO) inventory valuations caused by lower
agricultural commodity prices.
Quarterly Details
Archer Daniels' quarterly net sales surged 45.6% year over year
to $22,870.0 million, beating the
Zacks Consensus Estimate of $20,484.0
million. The growth in net sales was mainly attributable to
a robust jump of 42.2% in Agricultural Services to $9,960.0 million, a rise of 56.1% in Oilseeds
Processing revenues to $8,567.0
million and an increase of 44.3% in Corn Processing revenues
to $2,841.0 million.
Total segment operating profit for Archer Daniels increased to
$888.0 million from $799.0 million in the prior-year quarter.
Operating profit for Agricultural Services segment grew 8.4% to
$193.0 million from $178.0 million in the year-ago period, reflecting
strong results from North American interior elevators and export
operations, partially offset by weaker international
operations.
Archer Daniels' Corn Processing segment's operating profit
inched down to $118.0 million from
$140.0 million last year. The decline
was primarily attributed to a significant surge in net corn costs,
partially offset by improvement in bio-products performance,
stemming from better margins of ethanol and lysine and increased
processing volume.
Archer Daniels' Oilseeds Processing segment recorded a quarterly
operating profit of $379.0 million
compared with an operating profit of $359.0
million in the year-ago period. The increase was primarily
attributable to better performance in North America.
Operating profit from the other business segment came in at
$198.0 million compared with an
operating profit of $122.0 million in
the year-ago quarter.
The long-term debt-to-capitalization ratio was 31.0% compared
with a long-term debt-to-capitalization ratio of 32.9% in the
prior-year quarter.
Archer Daniels, which competes with Bunge Limited (NYSE:
BG) and Corn Products International Inc. (NYSE: CPO),
currently has a Zacks #4 Rank, implying a short-term Sell rating on
the stock. The company also retains a long-term Neutral
recommendation.
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.
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