Zacks Bull and Bear of the Day Highlights: Badger Meter, Cliffs Natural
Resources, LibertyGlobal, Virgin Media and BT Group
CHICAGO, Dec. 18, 2012
CHICAGO, Dec. 18, 2012 /PRNewswire/ -- Zacks Equity Research highlights Badger
Meter (NYSE:BMI) as the Bull of the Day and Cliffs Natural Resources
(NYSE:CLF) as the Bear of the Day. In addition, Zacks Equity Research provides
analysis on Liberty Global Inc. (Nasdaq:LBTYA), Virgin Media Inc.
(Nasdaq:VMED) and BT Group plc. (NYSE:BT).
Full analysis of all these stocks is available at
Here is a synopsis of all five stocks:
Bull of the Day:
Badger Meter (NYSE:BMI) reported earnings of $0.62 in the third quarter of
2012 and revenues of $87 million, up 35% and 25%, respectively. Both outpaced
the respective Zacks Consensus Estimates. The acquisitions of Racine
Federation, Cox Flow Measurement and Remag are expected to boost the company's
flow measurement business globally.
The acquisitions broadened the company's product range and customer base for
Badger Meter. The company will continue to benefit from the customers
preference for the cost effective AMR technology as well as growing interest
in AMA. Furthermore, buoyed by its strong balance sheet and healthy cash
flows, Badger Meter can invest in growth opportunities, develop new products
and return cash to shareholders.
Based on these positives, we have upgraded our recommendation from Neutral to
Outperform on Badger Meter with a target price of $55.00. This target price,
27.1x our 2012 EPS estimate, reflects our view.
Bear of the Day:
We are downgrading our rating on Cliffs Natural Resources (NYSE:CLF) to
Underperform following its lackluster third-quarter 2012 results. Earnings
fell well short of the Zacks Consensus Estimate while profit slid roughly 86%
on account of lower iron ore pricing and higher costs. Revenues declined at a
double-digit clip and missed the Zacks Consensus Estimate.
The company cut its U.S. iron ore and North American coal sales volume
forecasts for 2012 factoring in the volatile pricing environment. Cliffs
remains hamstrung by lower iron ore pricing, partly due to the slowdown in
Chinese demand and oversupply in the industry.
The prices for commodities are expected to remain under pressure due to the
uncertain economic environment. The company also contends with higher labor
and mining costs.
Latest Posts on the Zacks Analyst Blog:
Liberty Global to Buyback Shares
In an attempt to enhance shareholder return, Liberty Global Inc.
(Nasdaq:LBTYA), one of the largest triple play cable operators in the
international market, has declared the authorization of a share repurchase
program worth $1 billion. The company intends to spend the proceeds in
different periods of 2013.
At the end of the third quarter of 2012, Liberty Global had $4,294.5 million
of cash and marketable securities on its balance sheet. However, the company
had $26,461.5 million of outstanding debt, which translates into higher
interest payments, thereby reducing the bottom line and earnings per share.
The share repurchase activity will not only fuel the company's earnings per
share but will also boost its share price.
Under the new $1-billion share buyback plan, the Englewood, Colorado-based
company plans to buy back its different class of shares, which includes Series
A, Series C or a combination of both type during 2013.
The stock repurchase program may be done through open market transaction or
through privately-negotiated deals, which may include derivative transactions.
Nevertheless, the share buyback timing will depend on market condition.
During 2012, Liberty Global repurchased shares worth $925 million, bringing
the total amount of share brought to $9 billion since the commencement of the
program in 2005. This reflects the company's consistent effort to boost the
return to its shareholders.
Though the company has declared weak third-quarter 2012 financial results, its
losses narrowed considerably compared to prior-year quarter. Moreover,
deployment of high-speed DOCSIS 3.0 network has facilitated the company to
compete with Virgin Media Inc. (Nasdaq:VMED) and BT Group plc. (NYSE:BT), and
has also led to an increase in revenue. We believe these factors along with a
strong liquidity position have stimulated the buyback decision.
We maintain our long-term Neutral recommendation on Liberty Global. Currently,
it has a Zacks #3 Rank, implying a short term Hold rating.
Get the full analysis of all these stocks by going to
About the Bull and Bear of the Day
Every day, the analysts at Zacks Equity Research select two stocks that are
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