Zacks Bull and Bear of the Day Highlights: Ryder System, Diamond Foods,
DIRECTV, Viacom and Netflix
CHICAGO, Jan. 10, 2013
CHICAGO, Jan. 10, 2013 /PRNewswire/ --Zacks Equity Research highlights Ryder
System (NYSE:R) as the Bull of the Day and Diamond Foods (Nasdaq:DMND) as the
Bear of the Day. In addition, Zacks Equity Research provides analysis on
DIRECTV (Nasdaq:DTV), Viacom, Inc. (Nasdaq:VIAB) and Netflix, Inc.
Full analysis of all these stocks is available at
Here is a synopsis of all five stocks:
Bull of the Day:
We upgrade our recommendation on Ryder System (NYSE:R) to Outperform from
Neutral. The company's growth trajectory is backed by improvements in lease
fleet and used vehicle sales. Further, it is experiencing an improvement in
fleet age, implying more renewals and organic fleet growth.
In addition, the company's efforts in deploying a fuel-efficient fleet
continue to lead the industry, strengthening its foothold in the rapidly
growing market for environment-friendly vehicles. Apart from its organic
growth, Ryder also seeks entry into new markets via acquisitions and remains
successful in doing so.
Further, Ryder remains committed to its shareholders via dividends and share
repurchase. Thus, we remain optimistic on the company's growth prospects.
Bear of the Day:
We have downgraded our long-term recommendation on Diamond Foods (Nasdaq:DMND)
to Underperform following its dismal first quarter fiscal 2013 results. Its
adjusted earnings of $0.23 per share plunged 67.6% from the year-ago quarter,
primarily due to weak top-line performance and increased operating expenses as
a percentage of sales.
Total sales dipped 10.1% year over year to $258.5 million, and missed the
Zacks Consensus Estimate of $274.0 million. The company's performance may also
get a hit due to difficulty on its part to secure walnut supplies and repair
its ties with growers.
Otherwise, a highly leveraged balance sheet may stop it from taking strategic
initiatives. Further, continued macroeconomic headwinds, intense competition,
product recalls and fluctuations in raw material prices may undermine the
company's future growth prospects and sustainability.
Latest Posts on the Zacks Analyst Blog:
Subscriber Boost for DIRECTV
The largest U.S. satellite TV operator DIRECTV (Nasdaq:DTV) recently announced
solid subscriber addition of nearly 100,000 in the final quarter of fiscal
Despite generating highest subscriber growth for fiscal 2012, DIRECTV's U.S.
segment reported 20% fall in subscriber growth in the fourth quarter of 2012
as compared with last year's quarter but increased 49% as compared with the
fourth quarter of 2011, hence taking its tally to a total 20.081 million
subscribers, up 1% on an annualized basis.
Despite generating highest subscriber growth for the fourth quarter of fiscal
2012, DIRECTV's U.S. segment reported 20% fall in subscriber growth in the
reported quarter as compared with the same quarter the year before. However,
it increased 49% as compared with the fourth quarter of 2011, hence taking its
tally to a total 20.081 million subscribers, up 1% on an annualized basis.
We believe that such massive improvement in subscriber growth is mainly
attributable to settlement of service renewal fees with Viacom, and will
restore faith of the customers. Moreover, launch of new DVR devices and other
value added services may have prompted demand for DIRECTV.
During fiscal 2012, DIRECTV added 196,000 customers as compared with 661900
customers in fiscal 2011.
Dispute with Viacom, Inc. (Nasdaq:VIAB) coupled with slowdown in promotional
activities due to increasing cost is seen to have reduced customer growth for
the U.S. segment in 2012. Moreover, a saturated U.S. market and stiff
competition from other pay-TV and online video streaming companies like
Netflix, Inc. (Nasdaq:NFLX) and Hulu has continuously hurt subscriber growth
for the company going forward.
However, DIRECTV's Latin American segment has continuously posted record
subscriber growth mainly driven by lower penetration of the pay-TV market in
Consequently, the rise in renewal fees by nearly 20% may jack up programming
expenses of DIRECTV, thereby affecting margins going forward. In order to
mitigate such expenses the company has decided to hike rates by 8% from
February 7 onwards.
We believe that such increase in rates from next month may impact customer
growth for DIRECTV in the first quarter of fiscal 2013.
We are maintaining our long-term Neutral recommendation on DIRECTV. Currently,
the stock holds a Zacks Rank #3, 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
likely to outperform (Bull) or underperform (Bear) the markets over the next
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