Zacks Bull and Bear of the Day Highlights: Weyerhaeuser, Randgold Resources,
Allstate, PartnerRe and Montpelier Re
CHICAGO, April 24, 2013
CHICAGO, April 24, 2013 /PRNewswire/ -- Zacks Equity Research highlights
Weyerhaeuser (NYSE:WY) as the Bull of the Day and Randgold Resources
(Nasdaq:GOLD) as the Bear of the Day. In addition, Zacks Equity Research
provides analysis on Allstate Corp. (NYSE:ALL), PartnerRe Ltd. (NYSE:PRE) and
Montpelier Re Ltd. (NYSE:MRH).
Full analysis of all these stocks is available at
Here is a synopsis of all five stocks:
Bull of the Day:
With strong revenue growth potential and excellent cost management,
Weyerhaeuser (NYSE:WY) seems to be a position to deliver another positive
surprise when it reports its earnings on Friday.
Further, with improving outlook for the industry, this Zacks Rank #1 (Strong
Buy) stock looks very attractive as of now.
Structured as a REIT, Weyerhaeuser is one of the world's largest private
owners of timberlands, with more than 6 million acres of timberlands primarily
in the U.S., and another 14 million acres under management in Canada.
Weyerhaeuser is also one of the largest manufacturers of wood and cellulose
fibers products. They also develop real estate, primarily as a builder of
The company has been focused on improving its capital structure with strong
liquidity and reduced interest expenses. Further with housing recovery
underway, continued operational excellence and excellent cost management, WY
is positioned for strong revenue growth and is expected to grow its dividend
On April 11, 2013, Weyerhaeuser announced its quarterly dividend of $0.20 per
share, up 18% from earlier quarterly dividend of $0.17 per share. The company
has grown its dividend by more than since declaring its initial dividend as a
As a result of improving outlook for the company, analysts have been revising
their estimates for March 2013 quarter and the fiscal year 2013. Zacks
consensus estimates for the current quarter and the current year now stand at
$0.22 and $1.08 per share, respectively up from $0.19 and $0.97 per share, 60
The company will report it first quarter earnings on April 26, 2013.
Bear of the Day:
Gold miners have had a rough ride in the recent past as gold prices plunged.
In fact, gold miners have been more hit by the precious metal's slide.
Further, sharp downward estimates revisions have resulted in a cloudy
near-term outlook for this Zacks Rank #5 (Strong Sell) stock.
Randgold Resources (Nasdaq:GOLD) is an African focused gold mining and
exploration company, with its stock listed on the NASDAQ and the London stock
Due to disappointing outlook, quarterly and annual estimates have been revised
sharply downwards in recent weeks.
Zacks consensus estimate for the current quarter now stands at $1.06 per share
versus $1.61 per share, 60 days ago, while the full-year consensus estimate is
$5.24 per share now, down from $6.10 per share.
While gold has rebounded slightly from its lowest level in recent months, gold
miners still seem to be struggling. GOLD is down about 28% year-to-date, while
Gold ETF (GLD) is down 15% year-to-date.
Gold equities have actually been underperforming the bullion, for the last
more than 10 years and more so, since 2010. I do not expect this trend to
reverse anytime soon with rising costs and increased production issues.
Latest Posts on the Zacks Analyst Blog:
Allstate Expects Higher CAT Loss
Last week, home and auto insurer Allstate Corp. (NYSE:ALL) announced its
pre-tax catastrophe (CAT) and net of reinsurance loss estimate to jump to $198
million for Mar 2013. This takes the total CAT loss estimate for the first
quarter to $391 million, occurring from 9 events.
However, the total estimate for the quarter was partly negated by favorable
reserve re-estimates of CAT losses in the prior years, bringing the net
pre-tax CAT loss to $359 million. This is higher than $259 million incurred in
the year-ago quarter.
After tax, Allstate is expected to incur CAT losses worth $129 million in Mar
2013 and $233 million in the first quarter of 2013. The company is slated to
release its first quarter results after the closing bell on May 1, 2013.
Help from the Bond Market
As CAT losses have become a regular phenomenon with uncertain extent of
damages, Allstate now seeks to manage its exposure to such losses by investing
collateral into bonds primarily created for natural disasters. While these
funds carry high interest rates, they also have the risk of losing capital if
a natural catastrophe occurs.
However, Allstate is investing into CAT bond collateral securities, which are
rated "AAA" by Standard & Poor's Investor Ratings Service (S&P). The last
bond, Willow Re 2008, that the company had invested in 2007 had matured in
2011. Post that, Allstate has now put in its collateral into money market
funds through a special purpose reinsurer – Sanders Re Ltd.
Subsequently, Allstate intends to buy $100 million of Class A bonds (rated
"BB+" by S&P) and $150 million of Class B (rated "BB") securities from
Sanders. These securities are due to mature in 4 years and will cover losses
related to hurricanes from Alabama to New York along with the earthquake in
Such CAT bonds were very popular in 2007 but the collapse of Lehman Brothers
led to significant losses for the bond investors. While many insurers are now
indulging into such CAT bonds, these securities have been trading at an
all-time low. Nevertheless, the returns are higher than any alternative mode
of protection. Moreover, market estimates CAT bond sales of about $7 billion
by the end of 2013, at par with 2007-level.
Overall, as the CAT bonds provide insurance coverage to Allstate, we remain at
the edge to analyse the future developments and traction in this market.
Allstate carries a Zacks Rank #2 (Buy), other outperformers in the insurance
sector include PartnerRe Ltd. (NYSE:PRE) and Montpelier Re Ltd. (NYSE:MRH),
which carry a Zacks Rank #1 (Strong 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
About the Analyst Blog
Updated throughout every trading day, the Analyst Blog provides analysis from
Zacks Equity Research about the latest news and events impacting stocks and
the financial markets.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative
analysis to help investors know what stocks to buy and which to sell for the
Continuous analyst coverage is provided for a universe of 1,150 publicly
traded stocks. Our analysts are organized by industry which gives them keen
insights to developments that affect company profits and stock performance.
Recommendations and target prices are six-month time horizons.
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the
latest analysis from Zacks Equity Research. Subscribe to this free newsletter
today by visiting http://at.zacks.com/?id=7158.
Zacks.com is a property of Zacks Investment Research, Inc., which was formed
in 1978 by Leonard Zacks. As a PhD from MIT Len knew he could find patterns in
stock market data that would lead to superior investment results. Amongst his
many accomplishments was the formation of his proprietary stock picking
system; the Zacks Rank, which continues to outperform the market by nearly a 3
to 1 margin. The best way to unlock the profitable stock recommendations and
market insights of Zacks Investment
Research is through our free daily email newsletter; Profit from the Pros. In
short, it's your steady flow of Profitable ideas GUARANTEED to be worth your
time! Register for your free subscription to Profit from the Pros at
Visit http://www.zacks.com/performance for information about the performance
numbers displayed in this press release.
Follow us on Twitter: http://twitter.com/zacksresearch
Join us on Facebook:
Disclaimer: Past performance does not guarantee future results. Investors
should always research companies and securities before making any investments.
Nothing herein should be construed as an offer or solicitation to buy or sell
Zacks Investment Research
800-767-3771 ext. 9339
SOURCE Zacks Investment Research, Inc.
Press spacebar to pause and continue. Press esc to stop.