Zacks Investment Ideas feature highlights: LionsGate, WisdomTree, BlackRock
and Carriage Services
CHICAGO, June 21, 2013
CHICAGO, June 21, 2013 /PRNewswire/ --Today, Zacks Investment Ideas feature
highlights Features: LionsGate (NYSE:LGF-Free Report), WisdomTree
(Nasdaq:WETF-Free Report), BlackRock (NYSE:BLK-Free Report) and Carriage
Services (NYSE:CSV-Free Report).
3 Stocks to Keep You Out of the Sun
Summer is here, well it is technically here even though the other day in
Chicago saw a high of 57. But cool beginnings have a way of becoming warm
endings, and there will undoubtedly be a few super-hot sunny days.
Most articles like this want to tout stocks that will sizzle in the summer
time, like theme parks or golf equipment stocks. I want to keep you from
getting burned in the sun... literally.
The Cool Comfort of the Cinema
One way to hide from the sun is to take in a matinee. The movie theater is
always cranking the AC, and I haven't seen any outdoor movie theaters lately.
So my first pick is LionsGate (NYSE:LGF-Free Report), as their movies are
bound to excite and thrill and entertain.
Opening on July 3, 2013 is "Kevin Hart: Let Me Explain" a stand-up comedy
movie featuring the star of the BET hit "Real Husbands of Hollywood." Some
quick research shows Kevin Hart's last stand up movie grossed $7.7M and that
was good enough for 7th place on the all-time list of stand-up comedy movies.
The Eddie Murphy classic "Raw" was tops with $50.5M.
Beyond that movie there will be others, but investors will certainly want to
own this stock ahead of the November releases of "Ender's Game" and "The
Hunger Games: Catching Fire". Those will be blockbusters of immense
From a financial perspective, LGF is coming of a great FY2013. 70% top line
growth was complemented by 286% earnings growth. Looking forward, earnings
growth of 20% in FY2014 and 29% in FY15 are 600 and 400 basis points higher
than the expected earnings growth for the industry.
Estimates have recently ticked higher for LGF, but not enough to move the
stock from a Zacks Rank #3 (Hold) to a higher rank. FY2014 estimates at $1.33
in May but they inched up a penny to $1.34 in June. Similarly, FY2015 also
moved the same amount to $1.74. As more analysts increase their earnings per
share estimates, it will become more likely that this stock receives a higher
Sitting In The Shade
In keeping with my avoidance of the sun theme, my next stock is going to be a
bit of a stretch. One of the most basic ways to avoid the sun is to sit under
a tree. This pick is a smart one, its WisdomTree (Nasdaq:WETF-Free Report).
This issuer of Exchange Traded Funds (ETF) has a lot of things going for it
like the super popular DXJ ETF that allows investors to gain exposure to
Nikkei and other Asian exporters and at the same time hedges the currency.
While the first half of the year was nothing short of gangbusters for that
ETF, the recent correction has given investors a more attractive entry point.
Whenever I see a story about WETF I am amazed that the idea of the company
being bought out is never addressed. I see WETF as a great target for
companies like BlackRock (NYSE:BLK-Free Report) and other investment managers.
The M&A premium on this stock is almost nonexistent, despite its 32x forward
PE compared to 14x industry average. A big reason for the heavy premium on
forward PE is that the 18.7% net margin that WETF sports compared to an
industry average of 7.6%.
A Zacks Rank #3 (Hold) could bump higher if the most recent slip in estimates
gets reversed. From January through May, WETF saw its Zacks Consensus Estimate
increase in each month, moving from $0.27 to $0.38 in May. The same could be
said of 2014 estimates as they rose from $0.29 to $0.53.
Where the Sun Doesn't Shine
With domestic indices down around 1.6% as I write this and European markets
down around 2% overnight there is definitely a sense of panic in the markets.
Hopefully today's trading will not lead to more business for Carriage Services
I am pretty sure the sun will never shine again on those that eventually get
"serviced" by CSV. The funeral and death care services company is getting
hammered today after Ben Bernanke shook markets by talking of tapering the
paper. The intraday move lower of 8% seems dramatically out of character for a
conservative business that is seeing nothing but slow and steady growth.
Recent M&A in the sector has investors taking a second look at this company
and other upstarts in the industry like eFuneral, a Cleveland Ohio based that
helps consumers choose a funeral service provider.
CSV is trading in line with most of the metrics that investors use to judge
valuation. The lone standout is the price to book multiple of 2.4x with the
industry trading at almost double that at 4.7x. CSV is expected to see topline
growth of 10% this year, while the industry is looking for 1.4%. The
outperformance flows through the income statement with CSV expected to show
31% EPS growth compared to 9.5% for the industry.
There's A Little Black Spot on the Sun Today
Posting an investment idea on June 20, 2013 is a difficult task as the market
reacts to the statements from the Fed and the impending end of QE3. Some
perspective is always something investors seem to have and traders utterly
lack. Some of these stocks, like WETF are acting like Godzilla has been
sighted just north of Tokyo, which is a totally unconfirmed rumor.
In these times of market corrections, know that panic and fear will cause poor
long term investment decisions. With that said, make sure you wear SPF 15 or
more in the sun this summer.
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