CHICAGO, April 11, 2011 /PRNewswire/ -- Zacks Equity
Research highlights V.F. Corporation (NYSE: VFC) as the Bull
of the Day and DryShips, Inc. (Nasdaq: DRYS) the Bear of the
Day. In addition, Zacks Equity Research provides analysis on
Ford Motor Co. (NYSE: F), General Motors Company
(NYSE: GM) and H&R Block Inc. (NYSE: HRB).
(Logo: http://photos.prnewswire.com/prnh/20101027/ZIRLOGO)
View Full analysis of all these stocks
Here is a synopsis of all five stocks:
Bull of the Day:
V.F. Corporation's (NYSE: VFC) fourth-quarter 2010
earnings of $1.78 per share outpaced
the Zacks Consensus Estimate, and jumped almost 10% from the
prior-year quarter on the heels of robust sales across all brands
and improved margins. We believe the acquisition of Rock and
Republic will allow V.F. Corp. to compete in the premium-denim
space dominated by Los Angeles
designers.
Furthermore, the company's capital strength allows it to sustain
its focus on international expansion, increasing direct-to-consumer
business, and investments in key brands going forward. In addition,
V.F. Corp. expects full-year 2011 earnings in the range of
$7.00 to $7.10 per share.
Currently, we are maintaining a long-term Outperform rating on
the stock. Our target price of $108.00, 15.3x 2011 EPS, reflects this view.
Bear of the Day:
We reiterate our Underperform recommendation on DryShips,
Inc. (Nasdaq: DRYS). The company's fourth quarter of fiscal
2010 financial results were well below the Zacks Consensus
Estimates. The drybulk shipping industry is facing serious
challenges, where the vessel rate collapsed even below the rate
during the recession.
We believe the sole reason for this dismal condition is the
sheer increase of ships under operation that have resulted in
intense price competition. The spot rate has fallen to such a low
level that even surging commodity prices in the Asian markets
failed to offset the loss of the vessel owners.
We believe continuation of this pricing trend may significantly
jeopardize DryShips future financials. The company is highly
leveraged with nearly $2.33 billion
of net debt at the end of fiscal 2010. We also remain skeptical
regarding the long-term growth prospect of the oil tanker
market.
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China Buys More Fords
Ford Motor Co. (NYSE: F) posted a 20% rise in sales to
53,440 vehicles in China during
March. The company's joint venture partner in China, Chongqing Changan Automobile delivered
42,157 vehicles during the month. This has brought the total sales
to 140,566 vehicles for the first quarter of the year, an increase
of 19% from the year-ago quarter.
In contrast, Ford recorded a 19% gain in sales to 212,777
vehicles during the same month in the U.S. The company's sales were
driven by small cars including Fiesta subcompact, new Explorer
crossover, Fusion sedan and Escape small SUV. Ford F-Series
remained the best-selling vehicle in the U.S. Its sales increased
25% to 53,272 units during the month.
Recently, Ford revealed its plan to invest 7 billion yuan ($1.1
billion) in China in order
to expand production capacity. The automaker will enhance the
production capacity at its new plant in Chongqing, operated by Changan Automobile Co,
to 650,000 units by 2012. It will also increase power train and
engine capacity to 750,000 units from 400,000 units in the
country.
Ford has been pursuing a major expansion plan in the emerging
countries, including Argentina,
Brazil, China, India
and Thailand. Through the
expansion plan, the automaker aims to tap the growing market
potential in the countries, especially those in Asia. Since last year, Ford has invested
$510 million in China and $500
million in India as part of
its expansion plan.
Last year, Ford has added 40 new dealerships in China as a part of its expansion plan.
Further, the automaker plans to add 66 new dealerships by the end
of the year, raising its total dealerships to 340 in the
country.
Ford's sales in China grew 40%
in 2010 driven by higher sales of Focus compact and Fiesta
subcompacts. Changan Ford sold 403,283 vehicles, an increase of 34%
from the last year. Meanwhile, Ford's commercial vehicle venture in
China, Jiangling Motors Corp.,
reported an impressive 56% rise in sales to 178,999 units.
Ford's domestic rival, General Motors Company (NYSE: GM),
posted a 29% increase in sales in the country to 2.35 million
vehicles in 2010. J.D. Power and Associates has predicted sales in
China to grow by 10.5% for
2011.
H&R Block Reports Interim Results
H&R Block Inc. (NYSE: HRB) reported a 5.7% year over
year increase in total tax returns prepared for the period
November 1, 2010 to March 31, 2011. Total retail returns prepared
grew 2.6%, while total digital returns increased 13.3% (including
29.2% increase in online filings).
The 29.2% growth in online filings and a 1.4% increase in
software-based returns were somewhat offset by a 10.2% decline in
returns prepared through the Free File Alliance. Total digital tax
returns, including online, software and Free File Alliance,
increased 13.3%. Total digital returns excluding Free File Alliance
increased 17.0%.
Net retail tax preparation fees improved from down 4.1% at
February 28 to down 2.2% at
March 31. The improvement resulted
from continuing growth in tax return volumes during the month. Net
retail tax preparation fees for the month of March improved 3.7%
year over year.
For fiscal 2011, H&R Block projects 2%-2.5% year over year
increase in total retail tax returns prepared. However, the company
estimates retail net average fee per return to decline 2.5 to 3.5
percentage points from fiscal 2010 level.
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