Biogen, Crocs, Krispy Kreme Doughnut, Burger King Worldwide and AFC
Enterprises highlighted as Zacks Bull and Bear of the Day
CHICAGO, June 14, 2013
CHICAGO, June 14, 2013 /PRNewswire/ --Zacks Equity Research highlights Biogen
(Nasdaq:BIIB-Free Report) as the Bull of the Day and Crocs (Nasdaq:CROX-Free
Report) as the Bear of the Day. In addition, Zacks Equity Research provides
analysis on the Krispy Kreme Doughnut Inc. (NYSE:KKD-Free Report), Burger King
Worldwide, Inc. (NYSE:BKW-Free Report) and AFC Enterprises Inc.
Here is a synopsis of all five stocks:
Bull of the Day:
Although markets have been shaky as of late, a few sectors have managed to
hold up surprisingly well. In particular, there has been great strength in the
health care space, as this segment is currently leading the market from a
The sector is still up about 20% so far in 2013, even when taking into account
the global sell-off, suggesting that health care is now the leader of the
market. Yet when investors drill further into this space, they find a true
This corner of the health care world has been crushing broad indexes lately,
both in terms of the health care sector and the overall market. And in this
winning space, one name that stands out and could continue to lead is
undoubtedly Biogen (Nasdaq:BIIB-Free Report).
Biogen is one of the largest and most well-known names in the biotech sector,
as the enormous company has a market capitalization of over $50 billion. The
Massachusetts-based firm is probably best known for its MS drugs, although the
company has a number of other therapies for various other diseases as well.
Like many other names in the sector, BIIB has surged to start 2013, continuing
the firm's solid run from a share price perspective. The company is actually
up more than 30% YTD, and has added an impressive 125% over the past two
years, suggesting that this has been a long growth story.
Bear of the Day:
The consumer has come back strongly this year, as housing prices and
confidence have rebounded. This has helped many discretionary stocks to soar
in 2013 and many believe this can continue if current trends in the market
Yet while the sector outlook might be very promising, not all companies look
to ride this wave higher. In particular, Crocs (Nasdaq:CROX-Free Report) could
be one company that misses out on this consumer boom, and gives back some of
its gains from earlier in the year.
Crocs is a Colorado-based company, best known for its unique footwear,
although the company also makes a number of accessories as well. While its
shoes might be ubiquitous, the firm isn't exactly in a number of portfolios as
it has a market cap of less than $1.5 billion and is well within the small cap
Arguably, the best days are long past for this once high flying company, as
the stock was once at $35/share, roughly double its current share price. It
appears as if the trend has passed Crocs by and that investors have moved on
to other names in the broad consumer market that are still 'in'.
Analysts seem to agree with this assessment too, as expected earnings growth
comes in slightly negative for the full year period. This includes a roughly
-20% EPS growth rate for the next quarter time frame, and a --0.3% for 2013.
Krispy Kreme's Franchise Deal in Dallas
Doughnut maker Krispy Kreme Doughnut Inc. (NYSE:KKD-Free Report) recently
formed a venture with an affiliate of Sun Holdings, LLC for the refranchising
of three company-owned shops in Dallas, Texas. Upon completion of the deal,
these three stores will be Krispy Kreme's franchised stores. The deal is
targeted to speed up Krispy Kreme's domestic franchise expansion.
We believe, the latest alliance reflects the franchisee Sun Holdings' intent
to make Dallas one of the prime markets for domestic expansion considering the
state's potential to generate about $40.8 billion in restaurant sales, as per
the national restaurant association.
Investment Management company Sun Holdings boasts superior local market
knowledge and has a proven track record in the restaurant industry. It
operates about 400 restaurants in Texas and Florida, including brands like
Burger King Worldwide, Inc. (NYSE:BKW-Free Report), AFC Enterprises Inc.'s
(Nasdaq:AFCE-Free Report) Popeye's, Golden Corral and Arby's.
Since fiscal 2009, this Winston-Salem, N.C. based-company signed a number of
new franchise agreements. As of Feb, 2013, there were 9 Krispy Kreme franchise
stores in Texas. In fact, Krispy Kreme also has future development agreements
with existing franchises in Texas to open 4 new stores.
Franchising a large chunk of its system reduces the capital requirements of
the company and thereby drives earnings per share and return on equity (ROE).
Alongside, free cash flow will continue to grow, allowing reinvestment for
increasing brand recognition and enhancing shareholder return.
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