Zacks Bull and Bear of the Day Highlights: Green Mountain Coffee Roasters,
China Petroleum and Chemical, Rio Tinto, BHP Billiton and Denison Mines
CHICAGO, Jan. 24, 2013
CHICAGO, Jan. 24, 2013 /PRNewswire/ -- Zacks Equity Research highlights Green
Mountain Coffee Roasters (Nasdaq:GMCR) as the Bull of the Day and China
Petroleum and Chemical Corporation (NYSE:SNP) as the Bear of the Day. In
addition, Zacks Equity Research provides analysis on Rio Tinto Plc.
(NYSE:RIO), BHP Billiton Plc. (NYSE:BBL) and Denison Mines Corp. (AMEX:DNN).
Full analysis of all these stocks is available at
Here is a synopsis of all five stocks:
Bull of the Day:
One of the stock market all-stars in recent years has undoubtedly been Green
Mountain Coffee Roasters (Nasdaq:GMCR).
The Vermont-based company burst onto the scene with its wide variety of
coffees, teas and other beverages that often come in single serve packs, an
innovation that helped propel the company to fame. However, increased
competition as of late has made investors sour on the company, pushing GMCR's
stock well off of its lofty heights.
The company has fought off this competition though, and it continues to make a
name for itself with its at home brewing accessories leading many to think
that the firm is back on track. This is further confirmed by recent trends in
the stock price, and some solid news on the estimate front which both suggest
that the company is out of the doldrums and back on its way towards
In fact, GMCR has seen its stock price soar in the trailing three month
period, with gains approaching 70% in the time frame, although it still has a
ways to go before eclipsing its 52 week high. We believe that the company
could be back on track to doing this, as earnings estimates have been soaring
as of late making the company an interesting candidate for investors seeking a
fresh play in 2013.
Bear of the Day:
The perceived health of the Chinese economy has improved greatly in recent
months, as many investors are once again bullish on the huge emerging market.
Not every stock in the country looks to be able to continue to ride this wave
of optimism though, as some bearish clouds are starting to appear for China
Petroleum and Chemical Corporation (NYSE:SNP) in particular.
SNP is one of the largest oil and gas firms in China and the world, with
reserves of nearly 2.9 billion barrels of crude oil and 6.7 trillion cubic
feet of natural gas. The firm also has an increasingly large overseas
operation, in both developed markets as well as in the Near East. Yet despite
these recent acquisitions and large reserves, the earnings picture isn't
exactly great for the company.
Full year estimates are pricing in negative earnings growth in the -16% range,
though they are also expecting a rebound in the following year. Still, the
Most Accurate Estimate and Zacks Earnings ESP for both this year and next are
negative, suggesting a broad analyst trend to the downside.
Thanks in part to this, SNP currently has a Zacks Rank of 5 or 'Strong Sell',
a huge change from just a week ago when the stock had a Zacks Rank of 3 or
'Hold'. The firm also receives a Zacks Recommendation of 'Underperform'
implying a weak longer term outlook as well.
Latest Posts on the Zacks Analyst Blog:
Rio Tinto Downgraded to Underperform
On January 22, we downgraded metal mining giant, Rio Tinto Plc. (NYSE:RIO) to
Underperform based on the company's huge write down of assets relating to its
coal and aluminium business.
Why the Downgrade?
On January 17, the company announced a possible impairment of assets to be
charged in fiscal 2012. The write down includes roughly $3 billion for assets
relating to the Rio Tinto Coal Mozambique, whereas an exorbitant amount of
$10-$11 billion relates to the aluminium business of the company. Along with
this, Rio also expects additional smaller write-downs in the quarter.
It is anticipated that the current write down of assets will have a negative
impact on the full year 2012 results as well. The company expects to announce
results for the full year on February 14, 2013. The Zacks Consensus Estimate
stands at $2.86.
With a Zacks Rank #3 (Hold) and Zacks Earnings Expected Surprise Prediction
(ESP) (Read: Zacks Earnings ESP: A Better Method) of -10.84%, Rio is less
likely to beat earnings next quarter. Moreover, this stock has mostly seen
downward estimate revisions in the recent past. Estimates for year 2012
declined 0.2% to $5.59 per share over the past 90 days, while that for fiscal
2013 declined by a much higher percentage of 5.9% to $6.10, over a period of
Rio also posted weak results for the half year 2012 with sales of $25.3
billion, down 12.8% year over year. Also, the earnings per share dropped 22%
year over year to $3.16 per share, for the half year 2012.
Cause for Concern
The company operates in a highly competitive industry, which is impacted by
micro factors such as price, quality and costs along with macro factors such
as government delays on permit issues and tax policies. Also, in a scenario,
where volatility in terms of demand and prices persists, it is difficult for
the company to sustain and grow its margins and earnings.
Other Stocks to Consider
While we remain bearish on Rio, other companies that are worth considering are
BHP Billiton Plc. (NYSE:BBL) and Denison Mines Corp. (AMEX:DNN), both of which
have a Zacks Rank #2 (Buy).
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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