Monthly Archives: April 2016

Boston Beer: Zacks’ Bear of the Day Play

These hipsters and their craft beers have changed the industry. What used to only be a small chunk of the business is now demanding attention from the big players in the business. Then you have the previously unthinkable matrimony of the largest beer names. Budweiser and Miller under the same roof? It’s blasphemy, but right now it’s reality.

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It’s put the industry on its heels and forced it down to the Bottom 20% of our Zacks Industry Rank. Today’s Bear of the Day is one of those companies, Boston Beer (SAMAnalyst Report). By looking at the ticker you can probably guess which brand this is associated with. That’s right, Boston Beer proudly brews Sam Adams beer. Their beer products are primarily positioned in the “Better Beer” category of the beer industry which includes craft beers and most imports sold at premium prices.

Back in the day before all these craft breweries started popping up, reaching for a Sam Adams may have been your only choice aside from downing Miller Lites. But now there is so much competition in that space that Sam Adams is probably very low on the list of beers you’d chose if you could have other craft options.

The fickle tastes of beer drinkers is reflected in the turning tide of earnings estimates for SAM. This Zacks Rank #5 (Strong Sell) stock has seen three analysts drop their estimates for the current year and next year in the last week. The bearish sentiment has dropped our Zacks Consensus Estimate from $7.84 to $6.51 for the current year and down from $9.06 to $6.99 for the next year. That’s a nasty drop and a big reason why SAM has the rank it does. Last quarter’s 43 cent disappointment with earnings coming in at 53 cents versus 96 cents in another big reason.

You don’t have to be proficient in technical analysis to feel this one out. Save for a big move from $200 to $260 in October 2015, shares of Boston Beer have been fizzing out for the last year. The most recent dip after earnings took shares down to $150, nearly cutting the market cap in half over the last twelve months.

Investors that really want exposure to this industry should take a look at Constellation Brands (STZ) and Pernod Ricard (PDRDY). Both of these names are Zacks Rank #2 (Buy) stocks.

Be sure to click FOLLOW THE AUTHOR above to stay on top of all the hot momentum stocks at Zacks.com. David Bartosiak is the Momentum Stock Strategist with Zacks, editor of the Momentum Trader and Home Run Investor, and host of “Trending Stocks”

 

Newmont Mining: Zacks’Bull of the Day Play

I’ve been hemming and hawing about mining stocks for several months. It’s one of those falling knife scenarios. For every turnaround story out there I can give you six stocks that are on pink sheets. I think this is a great example of how you can use the Zacks Rank to confirm your trades.

It’s easy to find turnaround opportunities. Look at the oil patch right now. I can find you thirty oil names at the drop of a dime that may be turning the corner now. The earnings estimate revisions haven’t turned the corner yet on oil stocks. So while the Zacks Rank may not help me pick the perfect bottom for these stocks, it’s also stopping me from riding these industries down to the bottom.

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The mining industry hasn’t popped up on my stock screeners until very recently. That’s because the earnings estimates weren’t following the shares higher. Now things seem a little healthier and we’re seeing not only a pick-up in estimates but also an uptick in volume. We are getting a primer on what’s going to happen in the oil industry. Companies in that industry will become more nimble, better run, more efficient and the ones who survive will be lean, mean and very profitable should the underlying commodity continue to appreciate in price.

With the turnaround full steam right now, I’m making Newmont Mining (NEMAnalyst Report) my Bull of the Day. It’s a Zacks Rank #1 (Strong Buy) with a Momentum Style Score of A. There has been so much bullish activity in the industry that Gold Mining industry is now in the Top 23% of our Zacks Industry Rank.

Newmont operates mines in the US, Australia, Peru, Indonesia, Ghana and Suriname that produce gold, silver and copper. Estimates are getting a boost from a boost in precious metals prices coinciding with some dollar weakness we’re seeing across the board.

The pace of the estimate revisions has been startlingly good. For this quarter, analysts had been looking for 9 cents EPS just sixty days ago. Now the Zacks Consensus Estimate has climbed to 27 cents. Next year’s numbers look even more impressive with a jump to $1.59 from $1.15.

Be sure to click FOLLOW THE AUTHOR above to stay on top of all the hot momentum stocks at Zacks.com. David Bartosiak is the Momentum Stock Strategist with Zacks, editor of the Momentum Trader and Home Run Investor, and host of “Trending Stocks”

 

 

 

Angie’s List: Zacks’Bear of the Day Play

Angie’s List (ANGISnapshot Report) posted a surprising loss for its first quarter of 2016 due to higher spending and lower revenues as it attempts to rehab its online business model, which connects consumers with home service providers, more in line with “freemium” trends.

According to Joshua Jamerson, writing for Dow Jones & Company on April 20…

Chief Executive Scott Durchslag said the company made “good progress” during the period as it rolls out the new model, with higher logins, searches, contract value and reviews in some test markets. The company said it was on track to finish removing its paywall for the company’s online ratings and reviews by this summer.

Though the traffic to Angie’s site climbed about 25% in the quarter compared with a year ago—Mr. Durchslag, on a conference call, said the increase was due to digital advertising and search engine optimization. The higher traffic didn’t translate to greater membership growth or revenue.

Analysts Slash EPS Projections

While ANGI shares tumbled under $7 on that report and then recovered the same day and are higher since, analysts aren’t buying the company’s turnaround strategy. Here’s what they did to earnings estimates in the past week to make ANGI a Zacks #5 Rank…

Notice that the full-year 2016 estimate fell from $0.17 to just $0.05. And 2017 projections were cut from $0.31 to $0.23.

IAC vs. AirBnB

Media Mogul Barry Diller and his IAC/InterActiveCorp (IACSnapshot Report) tried to buy Angie’s List in November, making an unsolicited $512 million, $8.75-a-share bid.

As ANGI management rejected the suitor, shares climbed to $11 in the hoopla, before making a steady descent in the past few months.

Since IAC already owned HomeAdvisor.com, which helps customers find home improvement professionals for free, this was an attempt to corner that market.

But part of the enthusiasm for ANGI shares since their disappointing earnings report may be the announcement made on the conference call. Mr. Durchslag revealed that Angie’s List would partner with home-rental service Airbnb.

While that partnership may be a game changer for the company, it remains to be reflected in either the top or bottom lines. Investors should keep Angie’s List off of their “buy list” until those trends turn around. The Zacks Rank will let you know.

Kevin Cook is a Senior Stock Strategist for Zacks where he runs the Follow The Money portfolio.

Adeptus Health: Zacks’ Bull of the Day Play

Adeptus Health (ADPTSnapshot Report) is a $1 billion operator of dozens of free-standing emergency hospitals and partnerships with premier healthcare providers in Texas, Colorado, Arizona, and Louisiana. Hopefully you and your family and friends rarely need their services. But if you do, they come well prepared and well recommended.

All Adeptus Health freestanding facilities, many under the brand First Choice Emergency Rooms, are fully equipped emergency rooms with a complete radiology suite of diagnostic technology (CT scanner, ultrasound, and digital X-ray), on-site laboratory, and staffed with board-certified physicians and emergency trained registered nurses.

According to patient feedback collected by Press Ganey Associates Inc., Adeptus Health provides the highest quality emergency medical care and received the 2013, 2014 and 2015 Press Ganey Guardian of Excellence Award for exceeding the 95th percentile in patient satisfaction nationwide.

The Sirens of High Double-Digit Growth

Since going public in 2014, Adeptus attracted a lot of attention early on that sent shares over $120 in the summer of 2015. While investor exuberance may have gotten ahead of the growth story then, shares were knocked back to earth and the pessimism swung the pendulum the other direction.

Looking at the growth numbers, many analysts justify a 25X to 30X multiple for this 30%+ growth story and come up with price targets near $100. Here were the highlights from the Adeptus top and bottom line earnings beats reported April 20 that keep analysts thinking in that direction and raising EPS estimates to keep ADPT a Zacks #1 Rank…

First Quarter 2016 Highlights

Systemwide net patient services revenue was $140.4 million versus $84.0 million in prior year, an increase of 67%

Net operating revenue was $112.8 million versus $81.5 million in prior year, an increase of 38%

Adjusted EBITDA was $21.7 million versus $13.3 million in prior year, an increase of 64%

Adjusted earnings per share was $0.47 and GAAP earnings per share was $0.32

Cash flow used in operating activities was $7.4 million versus $12.0 million in prior year

Net income attributable to Adeptus Health Inc. was $4.5 million versus $0.6 million in prior year

Same store revenue increased 12% and same store volumes increased 15% versus prior year

Opened seven freestanding facilities during the first quarter 2016

2016 Guidance and Expansion Plans

Management continues to expect systemwide net patient services revenue, which includes revenue from their unconsolidated joint ventures, of $635.0 million to $665.0 million for the full year 2016. They expect Adjusted EBITDA of $108.0 million to 113.0 million and Adjusted earnings per share of $2.50 to $2.60 for the full year 2016.

That $2.50 to $2.60 represents over 100% EPS growth from 2015. And 2017 estimates are seeing the potential for 50%+ growth.

Adeptus opened seven new freestanding emergency rooms during the quarter, including four consolidated facilities in Texas and three joint-venture facilities. The JV breakdown was two facilities in Arizona in partnership with Dignity Health and one in Colorado in partnership with UC Health.

The company remains on track to open 27 new facilities in 2016, consisting of 24 freestanding facilities and three hospitals, including a New Orleans hospital with an expected opening in Q4 and two hospitals in Denver and Colorado Springs in the second half. A Houston-based hospital is also under construction and is expected to open in 2017.

New facilities typically breakeven with $4 million in annual net revenue, but have historically generated in the range of $5 million-$6 million in annual net revenue within 15 months after opening. Average annual operating income, excluding depreciation and amortization, for new facilities has historically been between $1.0 million-$2.0 million, representing an operating margin of between 28-33%.

Whale-Sized Interest

ADPT shares have significant short interest, totaling nearly 6 million shares and requiring 10-15 days to cover at an average daily volume of 500,000. These players probably did well in the past year as the stock fell from $120 on Medicaid/Medicare reimbursement concerns and other emergency care liability issues.

Now they are scrambling to cover their short positions as the stock has surged above $60 in the past week since the company’s earnings “trifecta” — top and bottom line beats and raised guidance. But there is a group of investors with interest in ADPT that I find even more interesting than the shorts getting squeezed.

The institutional buyers of ADPT were hard at work in the fourth quarter of 2015, creating net accumulation of 18% of the float. Here were the top buyers in Q4, with an interesting bonus I’ll highlight in a moment…

The bonus is that the 3rd-largest buyer, Eagle Asset Management, is reporting their 640K share buy as part of their Q4 2015 13F filing, which is not due until May 15. Eagle runs $20 billion out of St. Petersburg, Florida and likes to concentrate its asset allocation in Healthcare (19%), IT (18%), and Consumer Discretionary (18%).

I like this list of smart money, including TPG, Columbus Circle, Federated, and Citadel. And that’s why I bought ADPT last week.

Disclosure: I own shares of ADPT for the Zacks Follow The Money Portfolio.

Kevin Cook is a Senior Stock Strategist for Zacks where he runs the Follow The Money portfolio.

Crocs: Zacks’Bear of the Day Play

Crocs (CROXSnapshot Report) has missed the Zacks Consensus Estimate in each of the last two reports, and it wasn’t even close. Misses of $0.41 and $0.42 translated and it is now a Zacks Rank #5 (Strong Sell) and today it is the Bear of the Day.

The Numbers

CROX missed the Zacks Consensus Estimate of ($0.35) by $0.42 for a 120% negative earnings surprise. Revenues came in a little above expectations at $209M for a 2.8% positive revenue surprise.

Description

Crocs makes and sells casual lifestyle footwear and accessories. As of December 31, 2015, Crocs operated 275 retail stores; 98 kiosks and store-in-stores; 186 outlet stores; and 12 company-operated e-commerce Web stores. The company was founded in 1999 and is headquartered in Niwot, Colorado.

Earnings History

Usually when a stock is the Bear of the Day, the earnings history is filled with misses. This is not the case for CROX, as it is mostly hit and miss. The company has beat the Zacks Consensus Estimate in three of the last six quarters.

Estimates

Here is the real reason the stock is a Zacks Rank #5 (Strong Sell) and the Bear of the Day. The Zacks Consensus Estimate has fallen steadily over the last few months. The FY16 estimate stood at $0.55 in September but fell to $0.32 in December and is now down to $0.20 in April.

Next year is seeing a similar move to the downside, with numbers sliding from $0.86 to $0.61 down to $0.53 over the same time period as mentioned above. That is the reason this stock is a Zacks Rank #5 (Strong Sell).

Chart

Zacks has developed a chart that helps investors see how earnings estimates have impacted the price of the stock over the last several years. We call this chart the price and consensus chart, and each color coded lines represents analyst estimates over a designated year. As estimates increase, the stock tends to follow. The Zacks Rank is impacted by earnings estimate increases, beats and incorporates the idea of analyst agreement and magnitude. As a Zacks Rank #5 (Strong Sell) we see that estimates are moving higher.

Follow Brian Bolan on twitter at @BBolan1

Brian Bolan is a Stock Strategist for Zacks.com. He is the Editor in charge of the Zacks Stocks Under $10, an investor service , where he recommends the stocks in the portfolio.

Brian also runs the brand new Zacks Game Changers where he looks for stocks that are disrupting their industries and reaping big gains.

Travelport Worldwide: Zacks’ Bull of the Day Play

Travelport Worldwide (TVPTSnapshot Report) beat the Zacks Consensus Estimate about two months ago extending its streak to four in a row. The stock is a Zacks Rank #1 (Strong Buy) and today it is the Bull of the Day.

The Numbers

TVPT beat the Zacks Consensus Estimate of $0.13 by $0.06 for a huge 46% positive earnings surprise. Revenues came in a little above expectations at $535 million for a 2.7% positive revenue surprise.

Description

Travelport Worldwide offers a travel commerce platform that provides distribution, technology, payment, and other solutions for the travel and tourism industry. Travelport Worldwide was incorporated in 2006 and is headquartered in Langley, the United Kingdom.

Earnings History

As noted above, the most recent earnings beat was the fourth consecutive time the company posted earnings ahead of the Zacks Consensus Estimate. Beats are always good to see, but the numbers that TVPT has been posting are even better.

The positive earnings surprises of 14%, 52%, 31% and 46% (respectively) are nothing to shake a stick at. Those are big beats!

Estimates

The FY16 Zacks Consensus Estimate has been moving higher. The number stood at $0.93 in January and moved higher to $0.96 in February on the strength of the most recent beat. We are currently at $0.97, as the estimate keep creeping higher and higher.

The FY2017 Zacks Consensus Estimate is also inching higher, moving from $1.10 to $1.14 over the same time period.

Valuation

TVPT trades at a discount to the industry average in terms of Forward earnings multiples as well as the price to sales multiple.

Part of the reason for this discount could be that the company is expected to produces sale growth of 7% in 2016, while the industry average is calling for a much higher growth rate of 18%. 2017 sees more of the same, with TVPT looking at revenue growth of 6.8% while the industry average has cooled down to 11%.

Chart

Zacks has developed a chart that helps investors see how earnings estimates have impacted the price of the stock over the last several years. We call this chart the price and consensus chart, and each color coded lines represents analyst estimates over a designated year. As estimates increase, the stock tends to follow. The Zacks Rank is impacted by earnings estimate increases, beats and incorporates the idea of analyst agreement and magnitude. As a Zacks Rank #1 (Strong Buy) we see that estimates are moving higher.

Follow Brian Bolan on twitter at @BBolan1

Brian Bolan is a Stock Strategist for Zacks.com. He is the Editor in charge of the Zacks Stocks Under $10, an investor service , where he recommends the stocks in the portfolio.

Brian also runs the brand new Zacks Game Changers where he looks for stocks that are disrupting their industries and reaping big gains.

Lions Gate Entertainment: Zacks’ Bear of the Day Play

The glitz and glamor of Hollywood sells dreams and fantasy, but what happens when you lift the veil and look at the inner workings of maintaining those images?  You will see that it costs a ton to make a film, and then promote the movie.  While people see box office hits make billions of dollars, those unicorn films are rare.  To wit, many movies bomb, and cost the studios millions of dollars.  One such studio, who has produced a few recent bombs is Lions Gate Entertainment (LGFAnalyst Report), who is the Zacks Bear of the Day.

This Zacks Rank #5 (Strong Sell) company is an entertainment company with a presence in motion picture production and distribution, television programming and syndication, home entertainment, digital distribution and new channel platforms. It is engaged in the development and production of feature films, North American theatrical, home entertainment, and television distribution of feature films and worldwide licensing of distribution rights to feature films.

In their most recent earnings announcement, the company posted year over year declines in adjusted net income, revenues, adjusted EBITDA, and EPS as the last installment of their Hunger Games series performed below the previous installments.

After the final installment of the world-wide franchise hit the Hunger Games, the company has struggled as Gods of Egypt, and the Divergent Series: Allegiant have posted much weaker results than expected.  While the company has seen better than expected results in their television and library businesses, it does not outweigh the poor performances by their new releases.  According to CEO Jon Feltherimer, “While the performance of our theatrical film slate resulted in softer than anticipated results, our other businesses performed strongly in the quarter.”

As you can see from the graph below, the company’s stock value and future expected earnings are seeing large declines of late.  Further, growth expectations in 2016 have plummeted.

Decreasing Estimates

Estimates for Q4 16, Q1 17, FY 16 and FY 17 have all seen significant downgrades over the past 30 days.  Q4 16 fell from $0.20 to $0.08, Q1 17 dropped from $0.56 to $0.36, FY 16 slipped from $0.46 to $0.32, and FY 17 fell from $1.20 to $1.00.

Bottom Line

With back to back films coming in below expectations, the box office receipts have suffered.  Further, the poor performance from their Divergent Series, puts into question how profitable the future installments of the series will perform.  Also, the company has pushed back the release of a couple other titles.  So it seems best to wait on the sidelines till the company finds their next box office hit.

If you are inclined to invest in the Movie/TV/Production/Distribution sector, you would be best served by looking into World Wrestling (WWEAnalyst Report), who currently carries a Zacks Rank #2 (Buy).  All other companies within this segment are ranked #3 (Hold) or worse.

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Daqo New Energy: Zacks’Bull of the Day Play

Energy has been front and center for investors over the past several months as oil prices gyrate up and down like two kids on a teeter totter playset.  At the same time ordinary citizens and governments are moving to renewable energy sources like solar power.  This shift in energy policy has brought several wind and solar companies into the forefront.  One such company, is a leading manufacturer of high-quality polysilicon (initial building block the process of manufacturing silicon based Solar Photovoltaic devices), who has seen revenues rise while decreasing costs.  This company, Daqo New Energy (DQSnapshot Report), is the Zacks Bull of the Day.

This Zacks Rank #1 (Strong Buy) is engaged in the manufacture and sale of high-quality polysilicon to photovoltaic product manufacturers. The polysilicon is further processed into ingots, wafers, cells and modules for solar power solutions. Daqo New Energy Corp., formerly known as Mega Stand International Limited, is headquartered in Wanzhou, The People’s Republic of China.

In their most recent earnings report the company saw quarter over quarter growth in Polysilicon production (+31.9%), Polysilicon external sales volume (+35.8%), Solar wafer sales volume (+9.9%), Revenues (+27.3%), Non-GAAP gross margin (+23.4%), EBITDA (+56.3%), Income from operations (+113.4%), Net Income (+209%), and Adjusted Net Income (88.9%).  Further, management was also able to decrease costs during the quarter as well, with Polysilicon average total production cost (down -12.7%), and Polysilicon average cash cost (down 11.7%).

According to Dr. Gongda Yao, CEO, “In the fourth quarter of 2015, we delivered strong operating and financial results that were beyond our internal expectations. Our polysilicon facilities were running successfully at full capacity for the entire quarter, and we are excited to report that both our external sales volume and cost structure exceeded our prior guidance. We achieved record-high quarterly polysilicon production volume of 3,547 MT, an increase of 31.9% from 2,689 MT in the third quarter of 2015 and 12% above our name plate capacity. Thanks to our technology and operations team, we made solid progress on our cost reduction efforts, and reduced our polysilicon average total production cost and cash cost even further to $9.74/kg and $7.69/kg, respectively, which is our lowest-ever cost and ahead of our cost reduction roadmap.”

As you can see from the Price and Consensus graph below, estimates and stock price are expected to continue to rise through 2016.

Increasing Estimates

Over the past 30 days estimates for Q1 16 Q2 16, FY 16 and FY 17;  Q1 16 improved from $0.40 to $0.91, Q2 rose from $0.46 to $1.01, FY 16 jumped up from $1.88 to $3.70, and FY 17 vaulted up from $3.33 to $4.50.

Bottom Line

The combination of management’s cost containment strategy, increased demand, and an improvement in polysilicon ASP (average selling price) has resulted increases in net income, EPS, and margins for the company.  Further, according to management, “the industry and our customers continue to add on additional wafer capacities through 2016, we anticipate continued strong demand for polysilicon.”

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Agrium: Zacks’Bear of the Day Play

Agrium Inc. (AGUAnalyst Report) is struggling as fertilizer prices remain weak. This Zacks Rank #5 (Strong Sell) is expected to see declining earnings again in 2016.

Agrium produces all three major fertilizers, including nitrogen, phosphates and potash. It is also a retail supplier of agricultural products such as crop protection and seeds in North America, South America and Australia.

It’s headquartered in Calgary.

A Fourth Quarter Beat

On Feb 9, Agrium reported its fourth quarter results and beat the Zacks Consensus by $0.03. Earnings were $1.43 compared to the Zacks Consensus of $1.40.

It was the second highest fourth quarter results on record, boosted by strong wholesale performance.

But continued falling fertilizer prices are hurting even though the retail side of the business provides some cushion.

Still, in 2015, the company generated $8.59 per share of free cash flow. It pays a healthy dividend of $3.50 per share, which is yielding 4.2%.

Analysts Gloomy About 2016

In February, the company gave a broad earnings guidance range for 2016 of $5.50 to $7.00.

Analysts have grown gloomier since then and have been lowering estimates.

3 estimates were lowered for 2016 in the last week with 2 lowered for 2017 in that time.

The Zacks Consensus Estimate has plunged to just $6.09 from $7.51 three months ago. $6.09 is still within the company’s February guidance range, but it is edging towards the lower end of that range now.

Agrium is expected to see an earnings decline of 12.8% this year.

Are Shares Cheap?

Shares have been bouncing around the 52-week lows for most of 2016.

Still, because earnings are declining, the shares aren’t dirt cheap. They trade with a forward P/E of 14.3.

Because of falling fertilizer prices, the entire industry is challenged right now so most of the fertilizer companies are Zacks Rank #4 (Sell) or #5 (Strong Sell) stocks.

But if you want to invest in an area that is similar, you might want to consider Scotts Miracle-Gro (SMGSnapshot Report). It’s a Zacks Rank #2 (Buy) and you also get a nice dividend, currently yielding 2.6%.

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Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor of the Insider Trader and Value Investor services. You can follow her on twitter at @TraceyRyniec and she also hosts the Zacks Market Edge Podcast on iTunes.

West Marine: Zacks’Bull of the Day Play

West Marine, Inc. (WMARSnapshot Report) is bucking the negative retail trend. This Zacks Rank #1 (Strong Buy) is expected to grow earnings by the double digits in Fiscal 2016.

West Marine is a specialty retailer in the world of water with 260 stores in 38 states and Puerto Rico and an e-commerce website. It also sells wholesale to professional customers.

Its customers include cruisers, sailors, anglers and paddlesports enthusiasts. It sells marine paints, shoes, apparel and other accessories, guidance systems, safety products and other water craft accessories.

Fiscal 2015 Sales Up

On Feb 25, West Marine reported fourth quarter and full year fiscal 2015 results. It beat on the fourth quarter reporting a loss of $0.45 versus the Zacks Consensus of a loss of $0.47.

Sales for the year rose 4.3% in the 53-week period, compared to a gain of 5.4% in the 52-week period of fiscal 2014.

Excluding the extra week, same store sales rose 6% in Fiscal 2015.

Sales from the website rose 32.5% year over year and is now 9.5% of total sales, up from 7.7% for the same period a year ago.

It has a goal of seeing 15% of total sales from its website so it’s making good progress towards that goal.

Sales through its stores, however, actually rose to 45.7% of total sales, from 41% a year ago. It has been trying to optimize sales at its stores by focusing on core boating products at those locations.

In fiscal 2015, core product sales were up 2.8% year over year while some of its expansion categories such as footwear and apparel, fishing products and paddlesports equipment were up 16.4%.

West Marine also outperformed the rest of the retail industry over the holiday season as holiday same store sales rose 9.4%.

Fiscal 2016 Estimates Rise

West Marine is a small cap retailer with a market cap of just $237 million. It is debt free with a $105.3 million revolving line of credit.

But it is hardly followed by the retail analysts. Zacks only has one estimate for fiscal 2016.

But that analyst is bullish for this year. The Zacks Consensus Estimate has risen to $0.32 from $0.22 in the last 60 days.

It made just $0.18 in fiscal 2015 so that is earnings growth of 77%.

Shares Have Rebounded

Like a lot of small caps, shares of West Marine have rebounded off their winter lows and are now up about 13% year-to-date.

You’re not buying this one for the valuation as it’s not cheap. It is trading with a forward P/E of 29.

But the earnings growth is expected to be there.

For investors looking for a small cap specialty retailer with strong earnings growth, West Marine is one to keep on your short list.

Want More of Our Best Recommendations?

Zacks’ Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Then each week he hand-selects the most compelling trades and serves them up to you in a new program called Zacks Confidential.

Learn More>>

Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor of the Insider Trader and Value Investor services. You can follow her on twitter at @TraceyRyniec and she also hosts the Zacks Market Edge Podcast on iTunes.