Kemper, Kosmos Energy, Companhia Energetica de Minas Gerais, Companhia
Paranaense de Energia and CPFL Energia highlighted as Zacks Bull and Bear of
CHICAGO, July 3, 2013
CHICAGO, July 3, 2013 /PRNewswire/ --Zacks Equity Research highlights Kemper
Corporation (NYSE:KMPR-Free Report) as the Bull of the Day and Kosmos Energy
Limited (NYSE:KOS-Free Report) as the Bear of the Day. In addition, Zacks
Equity Research provides analysis ontheCompanhia Energetica de Minas Gerais
(NYSE:CIG-Free Report), Companhia Paranaense de Energia (NYSE:ELP-Free Report)
and CPFL Energia S.A. (NYSE:CPL-Free Report).
Here is a synopsis of all five stocks:
Bull of the Day:
As a result of excellent quarterly performance and improved outlook for the
industry, estimates for this insurer have been on the uptrend sending the
company to Zacks rank #1 (Strong Buy).
Kemper Corporation (NYSE:KMPR-Free Report)is a diversified insurance holding
company with subsidiaries that provide property & casualty, health and life
insurance products to individuals and small businesses. Kemper serves its
customers through a network of agents as well as directly. Kemper currently
has more than $8 billion in assets.
On May 2, 2013, Kemper reported its Q1 2013 results. Net income for the
quarter increased 29% from Q1 2012, to $0.72 per share. Results were
substantially better than the Zacks Consensus Estimate of $0.53 per share,
mainly as a result of rate increases, higher than planned retention and
favorable reserve development.
As a result of strong results, Zacks consensus estimate for the quarter ended
June 30 now stands at $0.36 per share up from $0.31 per share, 60 days ago.
The estimate for the current year is also up to $2.01 per share from $1.75 per
Bear of the Day:
Disappointing results and downbeat guidance have led to downward estimates
revisions, sending Kosmos Energy to a Zacks Rank #5 (Strong Sell).
Headquartered in Hamilton, Bermuda, Kosmos Energy Limited (NYSE:KOS-Free
Report)is an independent oil and gas exploration company focused on frontier
and emerging areas along the Atlantic Margin. The company has production
assets and other project developments offshore Ghana and exploration licenses
offshore Ireland, Mauritania, Morocco and Suriname and offshore Cameroon.
On May 9, 2013, Kosmos reported it first quarter 2013 results. Net income for
the quarter came in at $20 million or $0.05 per share, 3 cents short of the
Zacks Consensus Estimate of $0.08 per share.
The management provided downbeat guidance for the second quarter. The company
also announced a delay in implementation of a key project in Morocco.
Due to disappointing results and downbeat guidance, quarterly and annual
estimates have been revised sharply downwards in the past few weeks by
CEMIG Downgraded to Underperform
We recently downgraded Companhia Energetica de Minas Gerais (NYSE:CIG-Free
Report), also known as CEMIG, from Neutral to an Underperform recommendation.
Why the Downgrade?
Revival from the lows experienced due to the global crisis has spurred demand
for a better infrastructure and modernized agricultural equipment. This in
turn has made a few industries very lucrative, including the electricity
Emerging countries are progressing well on the recovery path. Talking of
Brazil, electricity demand in the country is on the rise, especially when it
is gearing up to host two major sporting events in the coming years. The
national agency has predicted a consumption hike of about 4.5% in the
2011-2021 timeframe. Government spending has been geared up to improve the
infrastructure in the electricity industry.
Despite compelling long-term growth prospects, concerns surrounding Cemig have
forced us to downgrade the stock. Rising cost of services and operating
expenses, governmental interference and dependence on hydro sources for
electricity pose serious threat to growth. In the first quarter 2013, expenses
grew by 7% year over year and offset partially the revenue increase in the
Also, denomination of a portion of loans and financings in foreign currency
raises risks of higher financial expenses in the event of devaluation of the
Brazilian currency for Cemig.
The Zacks Consensus Estimate for Cemig is US$1.45 per ADR for year 2013 and
US$1.33 per ADR for year 2014, representing a year-over-year decline of 40.8%
and 8.1% in 2014, respectively.
Other Stocks to Consider:
Cemig currently has an $8.8 billion market capitalization. Other stocks to
watch out for in the industry are Companhia Paranaense de Energia
(NYSE:ELP-Free Report) and CPFL Energia S.A. (NYSE:CPL-Free Report), each with
a Zacks Rank #1 (Strong Buy).
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