Zacks Bull and Bear of the Day Highlights: Mohawk Industries, Aruba Networks,
Bayer, United Therapeutics and Actelion
CHICAGO, May 24, 2013
CHICAGO, May 24, 2013 /PRNewswire/ --Zacks Equity Research highlights Mohawk
Industries, Inc. (NYSE:MHK)as the Bull of the Day and Aruba Networks, Inc.
(Nasdaq:ARUN) as the Bear of the Day. In addition, Zacks Equity Research
provides analysis on Bayer (OTC:BAYRY), United Therapeutics Corporation
(Nasdaq:UTHR) and Actelion Ltd. (OTC:ALIOF).
Full analysis of all these stocks is available at
Here is a synopsis of all five stocks:
Bull of the Day:
Mohawk Industries, Inc. (NYSE:MHK) recently delivered a solid first quarter
earnings beat thanks to an improving U.S. housing market and expanding profit
Analysts revised their estimates significantly higher for both 2013 and 2014
off the Q1 beat, sending the stock to a Zacks Rank #1 (Strong Buy). Based on
current consensus estimates, analysts expect excellent growth from Mohawk over
the next couple of years. With valuation still at reasonable levels, shares of
Mohawk offers strong upside potential.
Mohawk Industries is a global flooring manufacturer focused on the production
of carpet, rugs, ceramic tile, laminate, wood, stone and vinyl flooring. Its
brands include American Olean, Bigelow, Dal-Tile, Durkan, Karastan, Lees,
Marazzi, Mohawk, Pergo, Unilin and Quick-Step.
Mohawk Industries delivered solid first quarter results on May 2. Adjusted
earnings per share jumped 50% to 87 cents, beating the Zacks Consensus
Estimate of 84 cents.
Net sales rose 6% to $1.487 billion, driven by strong gains in the Dal-Tile
and Unilin segments. The gross profit margin did decline slightly from 25.5%
to 25.4% of net sales.
However, the adjusted operating profit margin expanded 140 basis points to
6.5% of net sales as the company leveraged its selling, general and
administrative expenses. This led to a stellar 34% increase in adjusted
Bear of the Day:
Wireless-network equipment maker Aruba Networks, Inc. (Nasdaq:ARUN) has taken
it on the chin recently. The company delivered disappointing third quarter
results and warned of increased competition from its "largest competitor"
This prompted analysts to revise their estimates significantly lower for both
2013 and 2014, sending the stock to a Zacks Rank #5 (Strong Sell). Despite the
big selloff, shares still trade at a significant premium to the industry on a
forward P/E basis. Investors should consider avoiding Aruba Networks at least
until its earnings momentum turns around.
Aruba Networks is a wireless-network equipment maker. It was founded in 2002
and has a market cap of $1.5 billion.
Aruba reported disappointing results for its fiscal 2013 third quarter on May
16. Earnings per share came in at a loss of 9 cents, well below the Zacks
Consensus Estimate, which called for a loss of 1 cent.
Revenue climbed 12% to $147.1 million, which was also below the consensus of
$152.0 million. Its gross profit margin actually improved slightly to 70.1% of
total revenue. However, total operating expenses as a percentage of revenue
increased 422 points to 71.8%.
Latest Posts on the Zacks Analyst Blog:
Positive Data on Bayer Candidate
The HealthCare segment of Bayer (OTC:BAYRY) recently announced positive
results from an interim analysis of the phase III PATENT-2 trial on its
pipeline candidate riociguat. PATENT-2, the long-term extension phase III
study of PATENT-1, evaluated patients suffering from pulmonary arterial
Results from the interim analysis revealed that riociguat was generally well
tolerated along with a good long-term safety profile in patients (both
treatment-naïve and pre-treated) with PAH. Moreover, improvements were also
observed in the six minute walking distance (6MWD) with riociguat treatment.
In Feb 2013, Bayer filed for regulatory approval of riociguat, both in the US
and the EU, for the treatment of patients suffering from PAH. The candidate
enjoys priority review in the US. A final decision from the US regulatory body
is expected by Oct 2013.
The submission was supported by positive results from the PATENT-1 STUDY.
Bayer enrolled patients suffering from naïve symptomatic PAH as well as those
pre-treated with endothelin receptor antagonists (ERAs) or non-intravenous
prostanoid monotherapy, for the study. The study showed a statistically
significant improvement in the six-minute walk test from base line after 12
weeks compared to placebo.
We believe riociguat's approval will strengthen Bayer's cardiovascular
portfolio. Riociguat is expected to face stiff competition in the PAH market
on approval. The market already has players like United Therapeutics
Corporation (Nasdaq:UTHR) and Actelion Ltd. (OTC:ALIOF).
Moreover, Bayer is seeking US approval of riociguat for the treatment of
chronic thromboembolic pulmonary hypertension (CTEPH). The candidate is under
priority review for the indication in the US. Bayer is seeking approval of the
candidate in the EU and Japan as well for the same indication.
Bayer presently carries a Zacks Rank #4 (Sell).
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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