Krispy Kreme Doughnuts, Joy Global, Calgon Carbon, MeadWestvaco and CECO
Environmental highlighted as Zacks Bull and Bear of the Day
CHICAGO, July 23, 2013
CHICAGO, July 23, 2013 /PRNewswire/ --Zacks Equity Research highlights Krispy
Kreme Doughnuts, Inc. (NYSE:KKD-Free Report) as the Bull of the Day and Joy
Global Inc. (NYSE:JOY-Free Report) as the Bear of the Day. In addition, Zacks
Equity Research provides analysis onthe Calgon Carbon Corporation
(NYSE:CCC-Free Report), MeadWestvaco Corporation (NYSE:MWV-Free Report) and
CECO Environmental Corp. (Nasdaq:CECE-Free Report).
Here is a synopsis of all five stocks:
Bull of the Day:
It is one of the biggest company turnarounds since the end of the Great
Recession. Krispy Kreme Doughnuts, Inc. (NYSE:KKD-Free Report) was left for
dead but defied naysayers and is expected to see double digit earnings growth
in Fiscal 2014.
Krispy Kreme makes donuts and sells coffee in over 770 locations in 22
countries. It has an extremely loyal fan base for its signature product: the
Original Glazed donut which is usually served warm, directly out of the oven.
Over-expansion early last decade tarnished the brand but it has slowly been
able to turn it around.
On July 15, as testimony to the strength of the company, it announced that it
had refinanced its secured credit facilities and retired the entire $22
million outstanding balance of its term loan. The retiring of the loan and the
refinanced facilities was expected to save about $1 million in the first 12
As of July 12, it had a cash balance of $55 million and an unused borrowing
capacity on its revolving credit facility of $31 million.
It will also begin a new $50 million share repurchase program. That's
significantly higher than the previous $20 million program that was completed
Bear of the Day:
It's tough times for the mining equipment makers. Analysts slashed estimates
on Joy Global Inc. (NYSE:JOY-Free Report) after the company lowered full year
guidance. This Zacks Rank #5 (Strong Sell) is expected to see earnings fall
both in fiscal 2013 and fiscal 2014 as the global economy remains sluggish.
Joy Global is one of the world's largest underground and surface mining
equipment makers. It is usually one of the first beneficiaries of a global
recovery, because the miners can lead a recovery but that also means it can be
the first to see a slowdown.
On May 30, Joy Global reported second quarter results which confirmed that the
slowdown in the mining industry had arrived.
Sales fell 12% to $1.4 billion from a year ago. Original equipment sales fell
16% while Aftermarket sank 8%. Bookings were also down 8% year over year to
$1.1 billion with surface mining equipment bookings slumping 28%.
Calgon Carbon Raised to Outperform
On Jul 18, we upgraded our recommendation on pollution control company Calgon
Carbon Corporation (NYSE:CCC-Free Report) to Outperform factoring in the
benefits from its cost-cutting actions and price increases.
Calgon Carbon's earnings for first-quarter 2013, reported on May 6, topped the
Zacks Consensus Estimate but sales missed. This Zacks Rank #1 (Strong Buy)
stock is expected to gain from its cost reduction and pricing actions.
Following the release of the first quarter results, the Zacks Consensus
Estimate for 2013 for Calgon Carbon went up 3.7% to 84 cents per share.
Calgon Carbon, which competes with MeadWestvaco Corporation (NYSE:MWV-Free
Report) among others, remains confident in its ability to balance the need for
future investment with its responsibility to provide short-term returns. The
company continues to see ballast water treatment, reactivation services and
mercury removal as its basis for sustainable growth. It remains actively
focused on improving margins across all regions.
Calgon Carbon's strategic initiatives position it for significant growth in
the longer term. Its reactivation facilities have remarkably supported its
growth and have established its presence in several markets. The global demand
for reactivation services is expected to climb as regulations for water
quality strengthen around the world.
Calgon Carbon has also reduced its exposure to rising coal costs by
identifying new sources of supply and a variety of coals that are effective in
the manufacture of its high quality products. It has also embarked on
aggressive cost reduction initiatives to boost margins. Calgon Carbon's cost
improvement program, which includes consolidation of operations and headcount
reductions, is expected to contribute toward margin expansion.
Calgon Carbon's price increase actions should also drive sales and
profitability. It has implemented price hikes on activated carbon and service
products which are expected have an impact of more than $10 million in 2013.
Other Stocks to Consider
Another company in the pollution control industry worth considering is CECO
Environmental Corp. (Nasdaq:CECE-Free Report), which retains a Zacks Rank #1
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