E*TRADE Financial, Perry Ellis International, Take-Two Interactive, Microsoft
and Electronic Arts highlighted as Zacks Bull and Bear of the Day
CHICAGO, March 13, 2014
CHICAGO, March 13, 2014 /PRNewswire/ --Zacks Equity Research highlights
E*TRADE Financial Corporation (Nasdaq:ETFC-Free Report) as the Bull of the Day
and Perry Ellis International (Nasdaq:PERY-Free Report) as the Bear of the
Day. In addition, Zacks Equity Research provides analysis on Take-Two
Interactive (Nasdaq:TTWO-Free Report), Microsoft (Nasdaq:MSFT-Free Report) and
Electronic Arts (Nasdaq:EA-Free Report).
Zacks Investment Research, Inc., www.zacks.com.
Here is a synopsis of all five stocks:
Bull of the Day:
With the surge in stock market last year, retail investors are getting back
into trading, resulting in record trading volumes for online brokerages.
Headquartered in New York, E*TRADE Financial Corporation (Nasdaq:ETFC-Free
Report) provides online brokerage and related products and services to
individual investors and stock plan participants.
The Company provides these services to customers both online and through their
network of customer service representatives and financial consultants. The
company also operates a bank for deposits generated through its brokerage
ETFC was incorporated in 1982 and had its IPO in 1996.
On January 23, E*TRADE reported its fourth quarter results. Net income for the
quarter was $0.20 per share, in- line with the Zacks Consensus Estimate.
Results were a significant improvement over net loss of $0.65 per share in the
Daily average revenue trades (DARTs) for the quarter were 160,000-- highest in
over two years. Average margin loan balance was five-year high at $6.4
billion, up 8% sequentially and 10% year-over-year.
Bear of the Day:
Estimates have come down after disappointing fourth quarter preliminary
results, sending this apparel maker to a Zacks Rank #5 (Strong Sell) last
Perry Ellis International (Nasdaq:PERY-Free Report) is a designer and
distributor of a broad line of men's and women's apparel, accessories and
fragrances, as well as select children's apparel.
The Company, through its wholly owned subsidiaries, owns a portfolio of
brands, including some well knows ones like Perry Ellis, Cubavera, and
On February 24, Perry Ellis reported its preliminary results for Q4 2014 ended
February 1, 2014. The Company now expects total revenue to decline 16% to
approximately$216 million from $258 millionin the prior year quarter and
adjusted diluted earnings to be in the range of $0.02to$0.05 per share.
According to the company, the performance was impacted by inclement weather
coupled with a challenging consumer spending environment. In its
direct-to-consumer channel, lower mall traffic resulted in a 4.8% decline in
comparable store sales.
Its wholesale business was hurt as many retailers delayed shipments of
merchandise planned for January delivery to the next quarter.
Can "Titanfall" Rescue These Gaming Stocks?
It seems funny to me that large video game releases aren't getting the same
publicity as say a big budget blockbuster movie. When you look at the numbers
behind it, the video games put up numbers that would make Spielberg blush.
Grand Theft Auto V brought in $800 million worldwide in the first 24 hours of
its release, providing a big boost to the bottom line for Take-Two Interactive
Following the September release, Take-Two has seen current year earnings
estimates grow from $3.55 to $3.69, helping TTWO achieve a Zacks Rank #2
(Buy). This year, GTA V will be released on PC as well as the new Xbox One and
PS4 consoles, making it the gift that keeps on giving for the software maker.
Take-Two stock had a muted reaction to the initial sales number on GTA V in
mid-September. The stock chopped around for few months, trading mostly range
bound prior to a recent breakout. But still, today TTWO trades about 15%
higher than the $18 range it traded before the popular title's release. The
break above $19 gives us a good stop loss and the upward sloping 25x5 moving
average provides support to the downside. Stochastics are a bit overbought but
that's par for the course on a breakout.
The reason why I'm bringing up the point of blockbuster games not getting
enough of the limelight is today's release of the much anticipated Titanfall.
The game has quite a bit of hype behind it in industry circles. Rolling Stone
called it "the most anticipated next-generation videogame of the year." Think
first person shooter, like Halo mixed in with Avitar-style mechs, in this case
heavily-armored 24-foot titans. Like any big action blockbuster, the game is
filled with explosions, awesome guns, and mechanized weaponry.
Hoping to repeat the success of its Halo franchise, Microsoft
(Nasdaq:MSFT-Free Report) needs this pony in the race. Following the release
of Xbox One, Microsoft has slowly been losing market share to rival Sony's
Playstation 4. The Titanfall release is exclusive to Xbox and PC, so a
successful launch could be exactly what indecisive gamers may need to sway
them into an Xbox One purchase.
Microsoft is a Zacks Rank #2 (Buy) in an industry in the bottom half of our
Zacks Industry Rank. Recently, 12 analysts have revised estimates to the
upside for the current year and 8 for next year. Big numbers from Titanfall
would definitely help Microsoft's bottom line. Don't expect GTA V type numbers
however. Titanfall is a divisive title made to set Xbox One apart from PS4, so
almost half of the market is in the dark on this one.
From a technical perspective, Mr. Softee looks pretty decent. Given the
relatively low historical volatility of MSFT, don't go looking for a huge move
in this giant. The run from a September low around $31 to the peak near $39 in
December is about as big of a move we have seen in years. Right here at the
$37.50 level, MSFT trades in a bullish trend above its 25x5 and stochastics
are not too overbought either. If MSFT gets locked into range-bound trading,
look for $35 to be a firm floor.
Microsoft isn't the only potential beneficiary of a blockbuster day for
Titanfall. Electronic Arts (Nasdaq:EA-Free Report) is publishing Titanfall for
the software team from Respawn Entertainment. EA has been a mainstay in the
gaming business dating back to the days of Sega Genesis and Super Nintendo.
Known for its perennial Madden football franchise and international hit FIFA
Soccer, EA is hoping the release can be a boost to earnings.
Currently, EA is a Zacks Rank #3 (Hold) in need of an earnings catalyst to
propel the stock into a buy rating. Earnings in the video game business are
traditionally "feast and famine" as companies are always looking ahead to the
next game introduction for payday. If Titanfall produces anything remotely
close to what GTA V brought Rockstar and Take-Two, EA could be looking at a
The chart for EA is a bit more exciting than what we saw out of MSFT. This
year the stock has already run from $21 all the way up to $29.50 before taking
a bit of a breather the last few days. After a big run like this, you can
expect a bit of a pullback. However, $28 was a firm top that EA just broke out
from, so the pullback may not be as extreme as you'd expect. Given the
positively sloping 25x5 down at $27.12, I'd like to see the stock have a
larger down day before I began to leg into any position.
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