Monthly Archives: July 2016

AB Inbev: Zacks’ Bear of the Day Play

In this day and age of “If you can’t beat em, join em” nothing surprises me. I mean, Kevin Durant moving over to the Golden State Warriors is nothing compared to AB Inbev (BUDSnapshot Report) making a play for SABMiller. Recently AB Inbev upped their offer to make up for a weakened British Pound post-Brexit. The offer now stands at 45 Pounds per share. I couldn’t help point out the hilariousness in one of myTrending Stocks videos.

I’m not bearish on InBev in the short term because of the deal. I’m bearish because it’s a Zacks Rank #5(Strong Sell) with a Value Style Score of F and a Growth Style Score of D. That tells me the valuations are a little out of whack and the estimate revisions haven’t been moving in the right direction.

Over the last sixty days two analysts have dropped their earnings estimates for the current year, while a single analyst has done so for next year’s numbers. The bearish sentiment has dropped the current year Zacks Consensus Estimate from $4.21 to $3.98. Looking at next year’s numbers, consensus has gone from $4.95 down to $4.42. The bearishness follows up on a drastic quarter for the company where EPS came in at 51 cents versus estimates calling for 87 cents.

The stock has been surprisingly resilient in the face of these downward earnings estimates. Since bottoming out just above $100 in October, the stock has approached $130 on several occasions. The most recent push to the highs stalled out just a few weeks ago. A bounce here in the short-term off support near $122 could send the stock towards $130 again but I’d be careful around earnings with so many negative revisions.

Eventually the fundamentals win out. Stocks tend to track with their earnings and if analysts are right about dropping their estimates, then this stock could be setting up for disaster in the intermediate term. If you’re bent on getting exposure to this industry, you should look at Zacks Rank #2(Buy) Constellation Brands (STZAnalyst Report) . Several stocks in the industry are Zacks Rank #3 (Hold) stocks, including Boston Beer Company (SAMAnalyst Report) .

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Tahoe Resources: Zacks’ Bull of the Day Play

While everyone has been focused on surging gold prices, the silver space has quietly been on fire too. In fact, while gold ETFs like (GLDETF report) have added about 25% year-to-date, silver funds such as (SLVETF report) have actually gained nearly twice as much, adding roughly 45% so far in 2016.

And much of this gain has been in the past month, as SLV has added more than ten percent, compared to a gain of just over 1% for GLD in the same time frame. Clearly, some level of leadership in the precious metal world is being to shift to silver, even if most investors remain ignorant about the gains.

Great Opportunity

This under-the-radar trend makes for an interesting situation for investors. It could actually make for a great time to buy some silver mining stocks which have lagged the competition up until now, but are actually seeing strong fundamentals in terms of earnings estimate revisions. A great example of this is Tahoe Resources (TAHOSnapshot Report) .

This Nevada-based company has mines in Guatemala and Peru, and it actually has exposure to both silver and gold. The company has underperformed its counterparts and a broad silver mining benchmark on a YTD look, and while that isn’t good news for current investors, it could make for a fantastic entry point for new investors seeking to get in on the silver bull trend before it is too late.

Why TAHO Now

Analysts have been embracing TAHO shares as evidenced by recent increases in earnings estimates. In fact, we haven’t seen a single estimate move lower in the past sixty days for either the current quarter or the current year, while analysts are now looking for EPS growth of close to 28% this year.

The magnitude of these estimate revisions has also been impressive, as the current quarter estimate has gone higher by more than 20% in the past two months, while we have seen long term—full year and next year—figures zoom higher by more than 27% each in the same time period.

TAHOE RESOURCES Price, Consensus and EPS Surprise

TAHOE RESOURCES Price, Consensus and EPS Surprise | TAHOE RESOURCES Quote

No wonder the stock has been marching higher as of late, and why the stock has earned itself a Zacks Rank #1 (Strong Buy). Plus, with a recent move into strong buy territory, and a lack of price appreciation relative to precious metal prices in the past month, this could be a timely addition.

And if that wasn’t enough, investors should also consider the strong momentum that this stock possesses. TAHO shares have an ‘A’ Grade for Momentum, thanks in large part to its nice move over the past three months, and momentum in earnings estimate revisions as well.

Bottom Line

Investors have largely overlooked silver and silver miners this year, shunning them in favor of companies more-focused on the gold space. However, now could be the time to make a bet on some of the underperformers in this space which still have strong fundamentals. After all, the silver industry currently has a Zacks Industry Rank in the top 1% and it is actually second overall out of more than 250 industries.

So if you are seeking to make a play on this surging sector, definitely give TAHO a closer look. It hasn’t run up as much as its counterparts, though it currently has strong earnings estimate revisions and incredible momentum prospects as well, making it a potential timely add for those seeking to jump in to this now in-focus market segment.

And if you want more information on the precious metal mining market, make sure to watch our recent podcast on the topic below:

 

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Southwest Airlines: Zacks’ Bear of the Day Play

Low fuel prices had lifted airlines’ stocks last year but the outlook has turned negative this year thanks to overcapacity, terrorist attacks, currency headwinds and plunging fares. Most airlines have reported disappointing earnings for the recent quarter.  What lies ahead for this low-cost, domestically focused airline?

About the Company

Dallas-based Southwest Airlines (LUV) is the nation’s largest carrier in terms of originating domestic passengers boarded. They serve 77 of the top 100 domestic airports, focusing primarily on short-haul, high frequency, point-to-point and low-fare services.

Lackluster Second Quarter Results

Southwest Airlines reported mixed results for Q2, missing the Zacks Consensus Estimate on earnings but beating on revenues. Adjusted earnings of $1.19 per share were short of the Zacks Consensus Estimate of $1.22.

Revenues of $5,384 million beat the Zacks Consensus Estimate of $5,372 million and were also up 5.3% year over year. Passenger revenue per available seat mile (PRASM) fell 3.5% year over year to 12.83 cents.

Shares sank about 11% after the report.

Falling Estimates

Zacks Consensus Estimates for the current and the next year have plunged to $3.95 per share and $4.15 per share, from $4.15 and $4.51 respectively before the earnings release.

The Bottom Line

While low fuel prices benefit airlines’ earnings, they also put pressure on pricing, particularly due to heavy discounting mainly by low-cost carriers. Many airlines expanded capacity in the wake of lower fuel prices which has now led to a fare war.

Airlines industry is currently ranked 247 out of 265 Zacks industries (bottom 7%). Investors looking to play this industry could look at Cathay Pacific Airways (CPCAY) which carries a Zacks Rank #1 (Strong Buy).

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GameStop: Zacks’ Bull of the Day Play

Blockbuster success of Pokemon Go has boosted sales of many video game and Smartphone retailers. GameStop shares have rallied sharply this month but can the craze for the game continue to boost shares going forward?

About the Company

Headquartered in Grapevine, TX, GameStop Corporation (GMEAnalyst Report) is a global specialty retailer of multichannel video game, pop culture collectibles, consumer electronics and wireless services. The company is also the largest reseller of used video games as well as entertainment software.

GameStop operates more than 7,000 stores in 14 countries across Europe, Canada, Australia and the US. Their products are sold through stores and eCommerce website. Their Technology Brands segment includes Simply Mac, Spring Mobile and Cricket stores.

First Quarter Results

GameStop reported better-than-expected results for Q1. Adjusted earnings of $0.66 per share beat the Zacks Consensus Estimate of $0.61 and net sales of $1,971.5 million were also ahead of the Zacks Consensus Estimate of $1,952 million.

The company’s lackluster guidance for Q2 resulted in shares selling off after results.  However, shares have rallied strongly in the past few weeks after release of Pokemon Go. In fact, analysts have been raising their estimates for the company of late.

Zacks Consensus Estimates for the current and next year are now $4.02 per and $4.28 per share respectively, up from $4.00 and $4.24, 60 days ago. They beat the Zacks Consensus Estimates in all of last four quarters.

The company will report on August 25 and with an Earnings ESP (Expected Surprise Prediction) of 17.24%, the stock is likely to beat estimates again. ESP is Zacks’ proprietary methodology for determining which stocks have the best chance to surprise with their next earnings announcement.

Pokemon Go Boost

According to the company, their stores are among the best places for gamers to find and train Pokemon as many of their locations are also PokeStops and Pokemon Gyms nationwide. The company will also be hosting an August 1 Pokemon event to attract customers.

Last week, GameStop CEO told CNBCthat sales in their 462 stores with Poke stops or gyms were up 100%. Merchandise sales were also up across the board.

Diversified and Growing Company

GameStop continues to maintain a dominant position in physical gaming market and grow its presence in digital gaming, collectibles and technology brand segments. While physical gaming is slowing down, digital gaming is picking up rapidly and GameStop’s focus on transitioning to the new business model will drive revenues going forward.

The company expects to derive 50% of their operating earnings from beyond physical games by 2019. Their collaboration with AT&T and Apple has also been quite beneficial. Spring Mobile is now the largest AT&T authorized retailer with more than 900 stores, while Simply Mac is the largest Apple premier partner with 76 stores.

Returning Capital to Shareholders

The company continues to return cash to shareholders via dividends and buybacks. Since 2010 they have reduced their outstanding shares by 37% and increased dividend payout five times. Their current dividend yield is 4.74%.

The Bottom-Line

In addition to a top Zacks Rank, the stock looks very good on a couple style metrics too, with Zacks Style Score of “A” for both Value and Momentum.
The company currently trades at a multiple of 7.78X forward earnings making it a great value stock.

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Essendant Inc.: Zacks’ Bear of the Day Play

Customers can be finicky, and shift their purchase preferences fairly quickly.  This at times is a boon from some companies, but it can also create large stumbling blocks for a company as customers shift away from their products.  This can be seen in the office products segment, and that is one of the reasons that Essendant Inc. (ESNDSnapshot Report) is the Zacks Bear of the Day.

This Zacks Ranked #5 (Strong Sell) is a wholesale distributor of business products. The Company offers technology products, traditional office products, janitorial and breakroom supplies, office furniture, industrial supplies and automotive aftermarket tools. It operates primarily in Dubai, United Arab Emirates. Essendant Inc., formerly known as United Stationers Inc., is headquartered in Deerfield, IL.

Recent Earnings Results

Essendant reported Q2 16 results last week, and they significantly missed both the Zacks Consensus Earnings and Revenue estimates.  The company posted year over year losses in Net Income -56.7%, Operating Income -50.2%, Earnings Per Share -55.1%, Adjusted EBITDA -22.6%, and Adjusted Earnings Per Share -32.1%.  Further management revised their FY adjusted ESP guidance from a range of $3.20-$3.40 to a range of $2.15-$2.30 per share.

Management’s Take

According to Robert Aiken Jr., President and CEO, “In light of the challenges we faced in the quarter and our reduced outlook for the balance of the year, we are accelerating efforts to advance our strategy, improve margins and reduce costs.  We plan to execute these actions while reducing our inventory levels over the balance of the year to improve the company’s return on investment. Building on our core capabilities while increasing operating and working capital efficiency is the right path forward.  With the common platform implementation of our office products and janitorial/sanitation businesses now complete, several large accounts wins on boarded and our industrial business making progress in its recovery plan, our company’s core capabilities continue to offer a competitive advantage in the marketplace.”

Price and Consensus Graph

As you can see in the price and consensus graph below, the company’s stock price and earnings estimates have plummeted recently.

ESSENDANT INC Price and Consensus

ESSENDANT INC Price and Consensus | ESSENDANT INC Quote

Decreasing Estimates

Over the past seven days estimates for Q3 16, Q4 16, FY 16 and FY 17 have all seen significant downgrades; Q3 16 fell from $1.07 to $0.86, Q4 16 dropped from $0.93 to $0.73, FY 16 collapsed from $3.26 to $2.21, and FY 17 declined from $3.59 to $3.04.

Bottom Line

The company is not sitting idly by while office product sales decline, they are looking into cost cutting opportunities in total headcount, and distribution.  Management is also reducing inventory purchases, and are planning on cutting supply chain costs.  But these measures will take a bit of time.

So if you are inclined to invest in the Consumer Product sector, you would be best served to look into Barnes & Noble Education (BNEDSnapshot Report) , and orSummer Infant (SUMRSnapshot Report) , both of which currently carry a Zacks Rank #2 (Buy).

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Allied World Assurance: Zacks’ Bull of the Day Play

The insurance industry is typically considered a pretty boring segment, but that does not mean that it cannot produce impressive returns for your portfolio.  And that is just what Allied World Assurance Company (AWHSnapshot Report) just did last week.  That is why they are the Zacks Bull of the Day.

This Zacks Rank #1 (Strong Buy) is one of Bermuda’s leading property and casualty insurers. The company, through its operating subsidiaries, offers property and casualty insurance and reinsurance on a worldwide basis. The principal operating subsidiaries of Allied World Assurance Company Holdings, Ltd have A Excellent ratings from A.M. Best Company and A- ratings from Standard and Poor’s.

Recent Earnings Results

AWH reported Q2 16 earnings last week, and they absolutely annihilated both the Zacks Consensus Earnings and Revenue estimates.  The company reported year over year gains in Net Income +1514.7%, Operating Income +220.5%, Underwriting Income +669.5%, cut their loss and loss expense ratio from 66.8% to 60.6%, and decreased their expense ratio from 32.4% to 31.8%.

Management’s Take

According to Scott Carmilani, President and CEO, “I am very pleased with our results this quarter, which were attributable to strong performances across both the underwriting and investment portfolios. In particular, with a combined ratio of 92.3%, our North American Insurance business is showing the strength and results of our focused build out.”

Price and Consensus Graph

As you can see in the price and EPS consensus graph below, 2016 and 2017 earnings estimates, and the current stock price have all shot up recently due to their impressive earnings report.

ALLIED WORLD AS Price and Consensus

ALLIED WORLD AS Price and Consensus | ALLIED WORLD AS Quote

Increasing Estimates

Over the past 7 days estimates for Q3 16, Q4 16, FY 16, and FY 17 have all seen significant upgrades; Q3 16 rose from $0.51 to $0.64, Q4 16 improved from $0.61 to $0.69, FY 16 jumped up from $2.20 to $2.90, and FY 17 leaped upwards from $2.33 to $2.75.

Bottom Line

Besides posting amazing income and cost cutting measures in Q2, management has also repurchased a total of 4,427,396 shares, year to date, and still has $410 million remaining on its outstanding share repurchase authorization.

Also, in April of 2016, shareholders approved four quarterly dividends equal to $0.26 per share. The first dividend was paid on June 30, 2016.  The company is currently paying a dividend yield of 2.49%.

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Waddell And Reed Financial: Zacks’ Bear of the Day Play

Waddell & Reed Financial (WDRAnalyst Report) is down some 57% over the last year despite having a decent recent track record for beating the Zacks Consensus Estimate. WDR is a Zacks Rank #5 (Strong Sell) and is the Bear of the Day.

The Numbers

WDR beat the Zacks Consensus Estimate of $0.55 by $0.02 for a 3.6% positive earnings surprise in the most recent quarter.

Description

Waddell & Reed, is the exclusive underwriter and distributor of 41 mutual fund portfolios, including 18 comprising Waddell & Reed Advisors Funds (formerly the United Group of Mutual Funds) and 12 comprising W&R Funds (formerly Waddell & Reed Funds, Inc.). The remaining 11 portfolios comprise the W&R Target Funds, which serve as the underlying investment portfolios for variable annuities and variable life insurance products underwritten by United Investors Life Insurance Company and distributed by Waddell & Reed.

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 WDR, as there are two beat over the last three quarters that have been reported.

Estimates

The Zacks Consensus Estimate has been falling over the last several months. The FY16 estimate stood at $2.65 in January but fallen to $1.84 in July.

Next year has also saw a big move lower in estimates with the 2017 Zacks Consensus Estimate moving from $2.96 in January to $1.78 in July.

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.

WADDELL&REED -A Price and Consensus

WADDELL&REED -A Price and Consensus | WADDELL&REED -A Quote

Follow Brian Bolan on twitter at @BBolan1

Brian Bolan is a Stock Strategist for Zacks.com. He is the Editor in charge of theZacks 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.

Keryx Biopharma: Zacks’ Bull of the Day Play

Keryx Biopharma (KERXAnalyst Report) has not beat the Zacks Consensus Estimate since 2012 and it is the Bull of the Day? What gives? How can a stock that has only met the Zacks Consensus Estimate or missed it over the last few years be a Bull of the Day? Let’s take a look at why I like this stock to outperform over the coming weeks and months.

The Numbers

KERX met the Zacks Consensus Estimate of a loss of $0.22 when it last reported in late April. The key to me was that the topline has seen sequential growth in each of the last four quarters and that is reason enough for me to make it the Bull of the Day.

Description

Keryx Biophamaceutical, Inc. uses data discovered through the mapping of the human genome to generate drug candidates that target the regulation of protein kinases. Protein kinases play a key role in the way cells communicate.

Earnings History

Normally when a stock makes it to my old “Home Run” screen there is a host of earnings beats. That is not the case for KERX, a company that has missed three of the last six reports. The other three reports were meets, so there hasn’t been a beat of the Zacks Consensus Estimate in a few years.

At the same time I am drawn to the sequential revenue growth over the last year or so. The March 2015 revenue was $1M, and followed by $3M, $4M, $6M and $7M in the most recent quarter. These are very small numbers, but the idea here is that there is good sequential growth. We expect to see more of the same as the consensus estimate for next quarter is $8M.

The company is slated to report earnings again on or around July 28.

Estimates

Normally I see earnings estimates move higher with a Zacks Rank #2 (Buy) and almost certainly with a Zacks Rank #1 (Strong Buy). This situation is different as estimates for this year are moving from a loss of $0.80 to a loss of $0.99 and have remained there for three and a half months.

The 2017 numbers recently moved higher, but that penny move from last month doesn’t seem like it would be enough to alter the rank. I should also note that I don’t know everything about the rank, but I have a great handle on how it works. There are times when small moves in estimates are just enough to lift a stock from a #3 to a #2 and could also imply that there is not a lot of recent revisions as we head into earnings season.

Valuation

With negative EPS, the PE numbers are thrown out the window. Price to book of 15x is more than double the 7x industry average and the price to sales multiple of 40x is absurd when you look at the industry average of 3.5x.

What we are looking for here is massive revenue growth. 200% revenue growth is expected this year and another 136% is slated for next year. Earnings are set to improve significantly as well, and if that happens, the stock will continue to appreciate.

Research

On July 8, Maxim Group raised their target price on the stock to $9 from $7 as the sales outlook brightened. We like seeing that style of development.

Back on the first of June, we see a 13G filing with Baupost Group showing at 42.5% stake in the company. This came after the company increased the authorized share capital by 50M shares and the conversion of notes into stock. There were $125M worth of notes held by Baupost and they converted them into stock, which is a very bullish indicator. At the time the stock was $6, so with the increase over $7 the 33.4M shares that were acquired have already proven to be a good move.

I like this stock for the long haul despite some big valuation numbers and a lack of earnings beats. Stocks that come up on the Home Run screen have often produced big winners, so I look forward to this stock doing the same.

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.

KERYX BIOPHARMA Price and Consensus

KERYX BIOPHARMA Price and Consensus | KERYX BIOPHARMA Quote

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Follow Brian Bolan on twitter at @BBolan1

Brian Bolan is a Stock Strategist for Zacks.com. He is the Editor in charge of theZacks 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.

Interactive Brokers Group: Zacks’ Bear of the Day Play

Even big investors make mistakes, but those mistakes are usually brushed aside if the company’s overall performance is above par.  Yet, when earnings, and net revenues decline as well, the mistakes are scrutinized.  This is the case with the Zacks Bear of the Day, Interactive Brokers Group (IBKRAnalyst Report) .

One segment that significantly underperformed is the Market Making segment, which is currently under formal review by the CEO.  Specifically, the CEO has given the segment 12months to reverse their current course or risk being liquidated, sold, or some other alternative solution.

This Zacks Rank #5 (Strong Sell) company is an automated global electronic market maker and broker specializing in routing orders and executing and processing trades in securities, futures and foreign exchange instruments on more than 70 electronic exchanges and trading venues around the world. As a market maker, they provide liquidity at these marketplaces and, as a broker, they provide professional traders and investors with direct access to stocks, options, futures, forex and bonds from a single IB Universal AccountSM.

Recent Earnings Report

Management announced Q2 16 results on July 19 where they beat the Zacks Consensus Earnings results, but came very short of the Zacks Consensus Revenue estimate.  The company saw on a year over year basis declines in Diluted earnings per share -8.1%, Net revenues -4.7%, Commission and execution fees -3%, Customer option contracts -8%, Stock shares volume -40%, Pretax profit margins down -3%.  Further, the company experienced a $2 million loss in their currency diversification strategy, compared to a profit of $53 million in 2015.  Most importantly, in the Market Making segment, income before taxes fell by -83% to $5 million.  Also, in the Market Making segment, pretax profit margins decreased to 12%, down from 42% in Q2 15.

Price and Consensus

As you can see from the graph below, IBKR had been outperforming expectations for the past two years, but their most recent earnings report caused both the stock price to decline and future estimates to be lowered.

Estimate Downgrades

There is unanimous analyst agreement of negative EPS estimates for Q3 16, Q4 16, FY 16 and FY 17; Q3 16 dropped from $0.38 to $0.34, Q4 16 fell from $0.39 to $0.35, FY 16 slipped down from $1.69 to $1.64, and FY 17 declined from $1.72 to $1.64.

Bottom Line

The Market Making segment’s performance is what analysts are really worried about as the CEO has put the segment under formal review.  While the other segments do suggest potential growth, the company has seen commission grown lagging.  Further, the low level of interest rates is another headwind facing the company.

If you are inclined to invest in the Financial/Investment Bankers segment, you would be best served to look intoGoldman Sachs (GSAnalyst Report) , and or Morgan Stanley (MSAnalyst Report) , both currently carry a Zacks Rank #3 (Hold).  The majority of the segment is currently ranked #4 or #5, Sell, and Strong Sell.

Goldcorp Inc: Zacks’ Bull of the Day Play

Gold prices have soared in 2016, from around $1060 per ounce in the beginning of the year to over $1300 per ounce in late July.  These increased prices are enabling gold mining companies to sell their products at a much higher price than previously envisioned.  This is why Goldcorp Inc. (GGAnalyst Report) is the Zacks Bull of the Day.

This Zacks Ranked #1 (Strong Buy) company has operations in Canada, the US, Mexico and Central and South America. Apart from gold, the company also produces copper and silver. The company’s principal producing mining properties are the Red Lake, Porcupine and Musselwhite gold mines in Canada The Penasquito gold/silver/zinc/lead mine, the Pueblo Viejo gold mine (40% interest) in the Dominican Republic, the Los Filos and El Sauzal gold mines in Mexico the Marlin gold/silver mine in Guatemala the Alumbrera gold/copper mine (37.5% interest) in Argentina and the Marigold (66.7% interest) and Wharf gold mines in the United States. Goldcorp has significant development projects which include the Cerro Negro gold project in Argentina Eleonore and Cochenour gold projects in Canada, the El Morro gold/copper project (70% interest) in Chile and the Camino Rojo gold/silver projects in Mexico.

Recent Earnings Performance

In the first quarter of 2016, the company posted net earnings of $80 million compared to a net loss of $87 million in the year ago quarter.  Further, Goldcorp produced 783,700 ounces of gold, a +8.1% increase from the year ago quarter.

Management’s Take

According to David Garofalo, President and CEO, “We delivered a solid first quarter of production at low all-in sustaining costs.  Eleonore and Cerro Negro continued their ramp-up with underground mine development advancing well at both assets.  With a focus on NAV per share accretion, we plan to drive further productivity improvements at current operations and to leverage our existing mining camps by advancing low capital intensity, high rate of return internal growth opportunities.”

Performance vs. the S&P 500

As you can see from the graph below, Goldcorp has been significantly outperforming the S&P 500 for the entirety of 2016.

Increasing estimates

Due to the surging price of gold, estimates over the past 30 days have increased for Q2 16, Q3 16, FY 16, and FY 17; Q2 16 rose from $0.03 to $0.04, Q3 16 improved from $0.07 to $0.10, FY 16 jumped up from $0.28 to $0.34, and FY 17 leaped up from $0.36 to $0.48.

Bottom Line

As many global issues, like Brexit, Global Terror, and Negative Interest rates remain a concern to investors, they will continue to run to the safety of gold and other precious metals.

Note: Goldcorp announces Q2 16 earnings results on Wednesday July 27, after the market closes.  Currently, the Zacks Consensus Earnings estimate stands at $0.04 per share, and the Zacks Consensus Revenue estimate is expected to come in at $898 million.

To get more information on hot gold stocks, check out the podcast;

 

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