Monthly Archives: August 2016

WebMD: Zacks’ Bear of the Day Play

WebMD (WBMDSnapshot Report) is a $2 billion provider of online health information services to consumers, physicians, employers, health plans, and other healthcare professionals. The company connects with its customers through both public and private portals.

Through its public portals consisting of desktop and mobile offerings, the company provides personalized online healthcare information to consumers on its flagship site, WebMD.com. Revenue is generated primarily through advertisements and sponsorship agreements from pharmaceutical and health and wellness companies.

Through its private portals, like Medscape.com, WebMD offers health management applications for employers and health plans, and generates revenue typically on a per participant basis.

Earnings Roll Over

I last wrote about WebMD in June after another strong quarterly report boosted analyst EPS estimates. The Zacks Rank caught a nice 30% move in shares in the first half of the year from $50 to $65.

But their Q2 report disappointed these same analysts, continuing a trend of lowered estimates that began in July.

In the past two months, the full-year 2016 consensus slipped from $1.88 to $1.82 and 2017 profit projections took a bigger hit, dropping from $2.19 to $2.02. And that’s why the shares of WBMD fell to the cellar of the Zacks Rank this month.

That 8% fall in EPS also brings the growth outlook to just 10.6% for next year, and that probably concerned investors the most after this year’s 20%+ growth. That would explain the drop in shares from $67 to $51 since that late May peak.

Taking Expertise & Access to a New Level

While the stock is on uncertain ground right now, it’s worth reviewing the positive development I noted in June…

On May 17, WebMD announced a new initiative. ColumbiaDoctors and Medscape, the leading source of medical news and information for physicians, would create a partnership that gives physicians using Medscape Consult access to the expertise of ColumbiaDoctors, Columbia University Medical Center’s faculty practice.

More than 25 health professionals from ColumbiaDoctors representing specialties including oncology, hematology, endocrinology, and surgery will serve as Medscape chief editors and associate editors on Medscape Consult, Medscape’s innovative peer-to-peer, point-of-care digital platform. Accessible to physicians worldwide, the Medscape Consult editors will respond to questions, share best practices, and offer expert perspectives.

Renowned experts in their respective specialties, ColumbiaDoctors will provide the Medscape Consult community with evidence-and practice-based insights into patient care, closely aligning with their basic and clinical research.

“Our new partnership with Medscape enables ColumbiaDoctors to share their insights and perspective with a global physician community facing rapidly shifting clinical concerns,” said John Chabot, MD, chief of the Division of GI/Endocrine Surgery, Columbia University Medical Center, and vice president of ColumbiaDoctors.

It sounds like WebMD intends to maintain and grow its superior platforms for health professionals and consumers. But until the estimate picture turns around, it may be best to stand aside. The Zacks Rank will let you know when the turnaround is on.

More Stocks to Sell. Now.

Beyond our Bear Stock of the Day, today’s list of 220 Zacks Rank #5 Strong Sells demand even more urgent attention. If any are lurking in your portfolio or Watch List, they should be removed immediately. Many appear to be sound investments but, since 1988, such stocks have actually performed more than 11X worse than the S&P 500. See today’s Zacks “Strong Sells” absolutely free >>.

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Gibraltar Industries: Zacks’ Bull of the Day Play

Gibraltar Industries (ROCKAnalyst Report) is a $1.2 billion manufacturer and distributor of metal building products for the industrial, infrastructure and residential markets.

The stock is part of a strong building and construction sub-industry ranked in the top 25% of all Zacks industries and including Caesar Stone (CSTESnapshot Report) , United Rentals (URISnapshot Report) , and Trex Company (TREXSnapshot Report) .

ROCK is North America’s leading manufacturer of ventilation products, mail storage solutions including mailboxes and package delivery products, bar grating, expansion joints and structural bearings, plus ground mounted solar racking and commercial greenhouses.

The company is divided into three reporting segments: Industrial and Infrastructure Products, Residential Products and Solar Mounting and Commercial Greenhouses.

Pedal to the Metal

Gibraltar (ROCKAnalyst Report) has had quite a run this year, up over 50% YTD. I first wrote about the stock as a Bull of the Day when it was a Zacks #1 Rank in early December and trading in the mid-$20s.

Here’s what I said then…

As residential and commercial construction markets have stepped on the gas this year, Gibraltar has benefited greatly. In the company’s recent Q3 earnings report, net sales for the third quarter of 2015 increased 30 percent to $305.0 million, compared with $234.1 million in the third quarter of 2014.

Adjusted net income was $15.7 million, or $0.50 per diluted share, compared with $9.5 million, or $0.30 per diluted share, in the third quarter of 2014.

That $0.50 EPS represented the company’s sixth consecutive earnings beat. Analysts have scrambled to catch up to ROCK’s earnings growth by raising their estimates.

What’s changed since that earnings report?

Not much. Construction markets are still strong. And how about 3 more earnings beats for the ROCK — two of them by over 100%! Plus, analysts are still scrambling to raise estimates.

In the past 60 days, the full-year 2016 consensus rose from $1.38 to $1.44 and 2017 profit projections rose from $1.54 to $1.65.

Also worth noting in Q2, Goldman Sachs added 970,000 shares of ROCK to their portfolios.

Global Metal ROCK-er

Gibraltar operates facilities in the United States, Canada, England and Germany.

In the Industrial and Infrastructure Products segment, Gibraltar is the self-described market leader in the fabrication of metal bar grating that is used in the oil and gas, manufacturing, chemical processing and leisure/sports park markets. The company also claims leadership in engineered bearings and joints used in bridge construction, roads, and airport runways.

It seems that the company’s diverse product segments and lines and international markets has shielded it from the downturn in oil & gas industry construction needs.

Gibraltar also has a leading position in the production of expanded and perforated metal which is used in a wide variety of applications within commercial construction, transportation and petrochemical markets.

In the Residential Products segment, Gibraltar serves the ventilation and air management market with a variety of roof, foundation and interior ventilation products, plus rain dispersion and outdoor comfort products. It also provides postal and parcel solutions for single and multi-family residences and large and small commercial centers. These products include single unit mailboxes, centralized mailboxes and electronic package lockers.

Going Green is Nothing New

A Gibraltar subsidiary, Rough Brothers Inc., has designed, manufactured and installed educational and commercial greenhouses, garden centers and conservatories since 1932. Their sole focus is building the custom greenhouses and conservatories that help commercial growers, retail garden centers, research facilities, universities and schools throughout the country.

RBI Solar, a sister company of Rough Brothers, designs, manufactures and installs solar mounting systems for commercial and utility scale solar projects. As a specialist in ground mount, roof mount, landfill and custom designed specialty solar structures, RBI provides best-in-class solar racking solutions and project management capabilities to serve project developers and system integrators.

Historically over 90% of the public conservatories in the United States were built by a firm called Lord & Burnham. To expand and enhance their conservatory design capabilities, in 1988 Rough Brothers acquired Lord & Burnham’s drawings, design details and equipment. As the company says, “This is just one more tool that allows Rough Brothers to deliver the precise and pristine detail requirements of conservatory and greenhouse construction, whether for new or historic greenhouse and conservatory restoration.”

The ROCK Bottom Line is Green Too

If you are looking for an investment to play the booming construction markets, this well-diversified small cap with strong double-digit EPS growth projected into next year should be at the top of your list.

Disclosure: I own ROCK shares for the Zacks Tactical Trader portfolio.

Now, which stocks should you sell?

As a Zacks Rank #1 Strong Buy, this Bull of the Day deserves consideration. But today there are 220 Zacks Rank #5 Strong Sells that demand even more urgent attention. If any of these are lurking in your portfolio, they should be removed immediately. Since 1988, such stocks have actually performed more than 11X worse than the S&P 500. See all Zacks Strong Sells and Strong Buys absolutely free >>.

Express: Zacks’ Bear of the Day Play

It has been a very challenging environment for mall based retailers due to declining traffic, rising trend for online shopping and increasing competition from off-price fashion chains. Many of them have seen declining sales of late, despite improving labor market and still low gas prices.

About the Company

Express (EXPR) is a retailer of specialty apparel and accessories for women and men. The company targets the 20 to 30 year old customer. They currently operate over 600 retail stores, located primarily in shopping malls, lifestyle centers, and street locations across the US, in Canada and in Puerto Rico.

Their merchandise is also available at franchise stores in the Middle East and Latin America. Further, the company also markets and sells its products through its e-commerce website.

Weak Results and Lower Guidance

The apparel chain reported weak results for the second quarter and also slashed its guidance for the year, leading to a sharp decline in shares after the report.

Net sales decreased 6% during the quarter to $504.8 million while same store sales (including e-commerce sales) declined 8%, compared to a 7% increase in the same quarter a year ago. E-commerce sales were down 7% to $70.1 million.

Net income was $10.1 million, or $0.13 per share compared $21.0 million or $0.25 per share in the previous year quarter. Earnings were way short of the Zacks Consensus Estimate of $0.17 per share. This was the second consecutive quarterly miss for the retailer.

The management now expects adjusted earnings of $1 to $1.14 per share for the full year, down from previous guidance for $1.41 to $1.54 per share.

Falling Estimates

Analysts have slashed their estimates for the company after weak results and downbeat guidance.  Zacks Consensus Estimates for the current and next fiscal year have plunged to $1.05 per share and $1.21 per share from $1.47 and $1.59 respectively, before the report.

Declining estimates sent the stock to a Zacks Rank #5 (Strong Sell).

The Bottom Line

In addition to disappointing consumer spending and mall traffic, the retail space is going through a shift toward online shopping. With tightening labor markets, “wage pressure’ has also started hurting retailers.

However some retailers have been able to deliver positive surprises in the latest quarter, with significant cost cutting measures and some changes in their business model. Investors could look at a better ranked retailer Nordstrom (JCP), which currently has a Zacks Rank #1 (Strong Buy). The company reported a huge beat and shares surged after the results.

So Where Are the Profitable Trades?

Be sure to short or avoid this Bear Stock of the Day. Now would you like to see Zacks’ recommendations that have the best profit potential? Starting today, for the next month, you can follow all our private buys and sells in real time from value to momentum . . . from stocks under $10 to ETF and option moves . . . from insider trades to companies that are about to report positive earnings surprises (we’ve called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors. Click here for all Zacks trades >>

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American Woodmark: Zacks’ Bull of the Day Play

Headquartered in Winchester, VA, American Woodmark Corporation (AMWD) is a leading manufacturer and distributor of kitchen and bath cabinets for remodeling and new home construction markets.

The company manufactures cabinets under four major brands:  American Woodmark, Timberlake Cabinetry, Shenandoah Cabinetry and Waypoint Living Spaces and sells more than 500 cabinet lines in a wide variety of design materials and finishes.

Their products are sold through a network of independent dealers and distributors, and directly to major builders, Lowe’s and The Home Depot.

Excellent Quarterly Results

The company reported its fiscal first quarter results on Aug. 23. Net sales for the quarter increased 12% year-over-year to $258.2 million with growth across all channels. Net income was $21.7 million or $1.32 per compared with $15.2 million or $0.92 per share for the same quarter a year ago.

Adjusted earnings of $1.26 per share were substantially better than the Zacks Consensus Estimate of $0.94 per share. The company has surpassed the Zacks Consensus Estimate in all of last four quarters, with an average quarterly surprise of 33%.

Rising Estimates

As a result of strong quarterly report, analysts have raised their estimates for the company. Zacks Consensus Estimates for the current and the next fiscal year now stand at $4.40 per share and $4.79 per share, up from $3.94 and $4.55, before the report.

Rising estimates sent AMWD back to a Zacks Rank#1 (Strong Buy).

Home Remodeling Speeding Expected to Surge

According to a study by John Burns Real Estate Consulting and the Harvard Joint Center for Housing Studies, spending on home repairs and remodeling is expected to exceed $300 billion this year, ahead of the previous high of about $285 billion in 2007.

With very low inventories of homes for sale and rising prices, many homeowners prefer to improve their existing home instead of buying a new one. Further, American homes are getting older, leading to rising spending on repairs. With improving labor market, homeowners are also willing to spend more on upgrades and remodeling.

The study forecasts that home improvement spending will continue to grow at a fast pace over the next three years. These trends bode well for the company. Further, being a domestically focused company, it is immune to global growth concerns.

In addition the top Zacks Rank, the stock also has the Style Score of “A” for Growth as well as for Momentum and a VGM score of “B”.

Want to see all of today’s Strong Buys?

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POSCO: Zacks’Bear of the Day Play

POSCO (PKXAnalyst Report) is formerly known as Pohang Iron & Steel Company and is now a Zacks Rank #5 (Strong Sell) and is the Bear of the Day.

Description

POSCO, formerly known as Pohang Iron & Steel Company Ltd., manufactures hot and cold rolled steel products, heavy plate and other steel products for the construction and shipbuilding industries.

Estimates

The Zacks Consensus Estimate has been falling over the last few months. The FY16 estimate stood at $3.59 in June and dropped in July to $3.24.

Next year has also seen a move lower in estimates with the 2017 Zacks Consensus Estimate moving from $5.33 in June to the current level of $4.83.

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.

Price and Consensus

Price and Consensus | Quote

More Stocks to Sell. Now.

Beyond our Bear Stock of the Day, today’s list of 220 Zacks Rank #5 Strong Sells demand even more urgent attention. If any are lurking in your portfolio or Watch List, they should be removed immediately. Many appear to be sound investments but, since 1988, such stocks have actually performed more than 11X worse than the S&P 500.

See today’s Zacks “Strong Sells” absolutely free >>.

Follow Brian Bolan on twitter at @BBolan1

In-Depth Zacks Research for the Tickers Above

Get the latest report on PKX – FREE

Lantheus Holdings: Zacks’ Bull of the Day Play

Lantheus Holdings (LNTHSnapshot Report) isn’t exactly a household name. In fact, I am betting that this stock is flying well under the radar for most investors. There are a few things that stick out to me for this play as a good long term investment and there are a few that are more short term in nature. Either way you cut it LNTH is looking good to me.

First let me list the positives I see with this stock and then we can go over the normal attributes that have made this Zacks Rank #1 (Strong Buy) stock the Bull of the Day.

Why I Like It

This is a small cap stock in a “risk on” environment.

Small cap stocks have been out-performing of late.

Revenue trends are pointing to continued sequential growth.

5 straight beats of the Zacks Consensus Estimate.

Room for multiple expansion (trades at 14x forward earnings as compared to 22x industry average).

Follow Brian Bolan on twitter at @BBolan1 and on StockTwits at the same address.

The Recent Numbers

LNTH beat the Zacks Consensus Estimate of $0.06 when it reported $0.24 in the first week of August. This $0.18 beat was good for a 300% positive earnings surprise.

The topline was also impressive with the company delivering $78M in sales when the Zacks Consensus Estimate was looking for $73M. That $5M beat was good for a 7.25% positive revenue surprise.

I mentioned the idea of sequential revenue growth as one of the reasons I like this stock. Last year the company recorded revenues of $75M in the March quarter and then posted $73M in the June quarter. That isn’t what gets me excited and isn’t growth, it is contraction. This year the March quarter saw $76M while the June quarter was $78M. So where there was contraction last year, this year we have expansion.

Description

LNTH is in the medical products industry and they sell products in the diagnostic imaging space. Roughly half the sales come from DEFINITY which helps doctors when looking at echocardiograms. The basic idea is the aging population is going to the doctor’s office a lot more and this helps identify problems, or rather, show that there aren’t health problems (hopefully).

As you can see from the image above, DEFINITY helps physicians interpret echo-cardiograms.

Earnings History

I have already mentioned the fact that LNTH has beaten the Zacks Consensus Estimate in each of the five reports that I see. What I didn’t mention what that they are HUGE beats. The first beat was 135% ahead of expectations and it was followed up by a 350% beat.

The December 2015 quarter saw the company post EPS of $0.13 when the Zacks Consensus Estimate was calling for a break-even quarter. That sort of beat tends to get investor’s attention and as a result they bid the stock higher by more than 17% in the session following the earnings release.

The topline also has a very strong history, but there isn’t a lot of data yet. That said, let’s take a look at this chart that shows just the quarterly revenues.

LANTHEUS HLDGS Revenue (Quarterly)

LANTHEUS HLDGS Revenue (Quarterly) | LANTHEUS HLDGS Quote

Estimates

There was a recent big move higher in estimates. The Zacks Consensus Estimate was holding at $0.32 over the last three months, but in August the number has shot up to $0.54.

The 2017 number also saw a big move higher, with the estimate going from $0.61 to $0.73. This tells me things are moving in the right direction.

Here is a chart of the trailing twelve months EPS:

LANTHEUS HLDGS EPS Diluted (TTM)

LANTHEUS HLDGS EPS Diluted (TTM) | LANTHEUS HLDGS Quote

Valuation

I mentioned the forward PE as being very attractive, but I need to also mention the price to sales multiple. It comes in at 0.8x while the industry average is a healthy 3.1x. This implies the stock is trading at a big discount.

I see the analyst are looking at earnings contraction this year, but next year we are looking at earnings growth of 36%. Couple that with revenue growth that is ahead of the industry average and you have something really great on your hands.

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.

LANTHEUS HLDGS Price and Consensus

LANTHEUS HLDGS Price and Consensus | LANTHEUS HLDGS Quote

Confidential from Zacks

Beyond this Bull of the Day, would you like to see Zacks’ best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now >>.

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Janus Capital: Zacks’ Bear of the Day Play

Janus Capital (JNSAnalyst Report) recently missed the Zacks Consensus Estimate by $0.01 for a 4.5% negative earnings surprise. The market didn’t seem too worried about the miss as the stock advacned 1.5% in the session following the earnings release. JNS is a Zacks Rank #5 (Strong Sell) and is the Bear of the Day.

The Numbers

JNS missed the Zacks Consensus Estimate of $0.22 by $0.01 for a 4.5% negative earnings surprise in the most recent quarter. This was the second consecutive quarter the company missed the Zacks Consensus Estimate.

The company also missed on the topline, and this was the third quarter in a row that sales came in below expectations.

Description

Janus Capital Group is an asset manager offering individual investors and institutional clients complementary asset management disciplines through the firm’s global distribution network. Janus Capital Group consists of Janus Capital Management LLC, Berger Financial Group LLC, Enhanced Investment Technologies LLC and Bay Isle Financial LLC.

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 JNS, as there are three beats in the last seven reports. The flipside of that is that there are four misses in that same time period.

Estimates

The Zacks Consensus Estimate has been falling over the last few months. The FY16 estimate stood at $0.93 in March and dropped a penny each month since then. The current estimate is now at $0.88

Next year has also seen a consistent move lower in estimates with the 2017 Zacks Consensus Estimate moving from $1.10 in April to the current level of $1.03.

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.

Price and Consensus

Price and Consensus | Quote

So Where Are the Profitable Trades?

Be sure to short or avoid this Bear Stock of the Day. Now would you like to see Zacks’ recommendations that have the best profit potential? Starting today, for the next month, you can follow all our private buys and sells in real time from value to momentum . . . from stocks under $10 to ETF and option moves . . . from insider trades to companies that are about to report positive earnings surprises (we’ve called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors. Click here for all Zacks trades >>

Follow Brian Bolan on twitter at @BBolan1

In-Depth Zacks Research for the Tickers Above

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Central Garden and Pet: Zacks’ Bull of the Day Play

Central Garden and Pet (CENTAnalyst Report) has beaten the Zacks Consensus Estimate for earnings and revenue in each of the last five quarters. The most recent report was a yet another example of a solid beat. Let’s take a look at the quarter, the earnings history, estimate revisions and of course the valuation. I think you will like what you see from this Zacks Rank #1 (Strong Buy) stock seeing as it is the Bull of the Day.

The Numbers

CENT beat the Zacks Consensus Estimate of $0.43 when it reported $0.48 in the first week of August. This $0.05 beat was good for a 11.6% positive earnings surprise.

The topline was also impressive with the company delivering $515M in sales when the Zacks Consensus Estimate was looking for $491M. That $24M beat was good for an 4.8% positive revenue surprise.

Description

Central Garden & Pet makes products for the lawn & garden and pet supplies markets. In Lawn & Garden: Grass seed including the brands Pennington and The Rebels; wild bird feed and the brands Pennington and Kaytee; weed and insect control and the brands AMDRO, Sevin, Ironite and Over ‘N Out and decorative outdoor patio products and the brands Norcal, New England Pottery and Matthews Four Seasons. The Company also provide a host of other regional and application-specific garden brands and supplies. It also provide a host of other application-specific Pet brands and supplies.

Earnings History

The last time CENT missed the Zacks Consensus Estimate was in 2014. Since then, there has been a string of 8 consecutive positive earnings surprises. This is a very enviable track record and demonstrates management’s ability to guide Wall Street to a beatable number and then still outperforming expectations.

The topline also has a very strong history, but not quite as impressive as we have seen on the bottom line. The company missed on top back in the March 2015 quarter, when it posted sales that were $2M below expectations.

Price and EPS Surprise

Price and EPS Surprise | Quote

Estimates

When you have a Zacks Rank #1 (Strong Buy) you are going to see positive earnings estimate revisions. Following the most recent beat, the Zacks Consensus Estimate for 2016 has moved from $1.13 to $1.20.

The 2017 Zacks Consensus Estimate was $1.26 prior to the earnings release and has since moved higher to $1.31

Valuation

One thing that I have been looking for in stocks lately is room for multiple expansion. CENT has that, as it trades at 21x forward earnings and that is a discount to the industry average of 23x. The price to book multiple of 2.3x should get some value investors interested in this name and not just because this stock trades at a discount to that industry average as well. I saved the biggest discount for the end and that metric would be price to sales. CENT trades at 0.7x sales while the industry average is sitting at a lofty 3.1x.

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.

CENTRAL GARDEN Price and Consensus

CENTRAL GARDEN Price and Consensus | CENTRAL GARDEN Quote

Confidential from Zacks

This week, Zacks researchers have named 7 other stocks that look to break out even sooner than today’s Bull of the Day. You can see these time-sensitive tickers free, and access additional trades that are not available to the public. Simply click here >>

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Kirby: Zacks’ Bear of the Day Play

The oil services recovery hasn’t yet arrived for Kirby Corporation (KEXSnapshot Report) . And now the marine segment has seen some weakness too. Full year earnings estimates for both 2016 and 2017 are being cut on this Zacks Rank #5 (Strong Sell).

Kirby is the largest domestic tank barge operator in the United States. It transports bulk liquid through the Mississippi River System, on the Gulf Intracoastal Waterway, along all three coasts of the United States and in Alaska and Hawaii.

It transports items that have seen tough days in recent months, including petrochemicals, black oil, refined petroleum products and agricultural chemicals.

It also operates offshore dry-bulk barge and tugboat units providing dry-bulk cargoes in the United States coastal trade.

It’s second segment specializes in diesel engines, including after-market service for medium-speed and high speed diesel engines. It also services pump and manufactures and remanufactures oilfield service equipment, including pressure pumps.

Mixed Signals in the Second Quarter

On July 27, Kirby reported second quarter earnings and beat the Zacks Consensus by 2 cents.

Revenue fell to $441.6 million from $543.2 million in the year ago quarter.

In the inland marine barge segment, it saw strong utilization early in the quarter but tank barge utilization fell later in the quarter. In the coastal marine segment, some customers were still electing short-term, or spot, contracts.

On the diesel engine side, which is most impacted by the downturn in the energy industry, there were signs of hope.

In the land-based market, it saw an increased number of orders for pressure pumping unit service and remanufacturing work. A sign of better times to come?

But, there is still weak demand in the sale of engines. And it did not receive orders for new pressure pumping units in the quarter.

In the Gulf of Mexico oilfield services market, customers are still deferring any major overhaul projects.

Lowered Guidance

Utilization fell to the low-to-mid 80% range in July in the inland marine system so it is guiding its marine segments in this range.

It also expects the depressed oilfield services market in the Gulf of Mexico to continue through the remainder of the year.

Kirby lowered its full year earnings guidance to a range of $2.40 to $2.70 from its prior guidance of $2.80 to $3.20 to reflect the weakness in the inland barge market.

The analysts, of course, have also cut their estimates. 3 estimates were cut for 2016 in the last 30 days with the Zacks Consensus falling to $2.62 from $2.97.

That is an earnings decline of 37.6% from 2015 when Kirby made $4.20.

The analysts are getting nervous about 2017 as well. 3 estimates were cut for 2017 during the same time period pushing the Zacks Consensus down to $2.87.

Shares Tank But Still Aren’t Cheap

Kirby shares sold off as energy declined in 2015 but saw some recovery, when crude prices rose, in early 2016.

That was an optimistic bounce.

After the earnings report and new, lowered guidance, the shares have weakened again.

But are they cheap here?

Kirby trades with a forward P/E of 21 which is more expensive than the average of the S&P 500.

If you must be in the shipping stocks, you should consider Aegean Marine (ANWSnapshot Report) . It’s a Zacks #1 Rank (Strong Buy) and is much cheaper with a forward P/E of 8.6.

What about shorting some of these stocks?

Learn how to short on this podcast.

More Stocks to Sell. Now.

Beyond our Bear Stock of the Day, today’s list of 220 Zacks Rank #5 Strong Sells demand even more urgent attention. If any are lurking in your portfolio or Watch List, they should be removed immediately. Many appear to be sound investments but, since 1988, such stocks have actually performed more than 11X worse than the S&P 500.

See today’s Zacks “”Strong Sells”” absolutely free >>.

Chemours: Zacks’ Bull of the Day Play

The Chemours Company (CCSnapshot Report) continues to focus on its Five-Point Transformation Plan. This Zacks Rank #1 (Strong Buy) is expected to grow earnings by 64% next year.

Chemours is a chemical company in the titanium technologies, fluoroproducts and chemical solutions areas. Its ingredients are found in plastics and coatings, refrigeration and air conditioning, mining and oil refining operations and general industrial manufacturing.

It was spun-off from DuPont in 2015. The company has 35 manufacturing facilities around the globe.

Big Beat in the Second Quarter

On Aug 8, Chemours reported its second quarter results and beat the Zacks Consensus Estimate by 14 cents. EArnings were $0.27 compared to the $0.13 estimate.

Net sales fell 8% to $1.4 billion, but the company tightened its business model as part of the Five-Point Transformation Plan.

It sold its Sulfur business for $325 million and also announced the sale of its Clean and Disinfect business for $230 million.

Titanium Technologies sales fell 7% year over year, but it saw strong demand in North America and EMEA which was offset by weaker volumes in Asia and Latin America.

As part of the Transformation Plan, it is getting a better handle on the balance sheet. It reduced debt by $100 million year-to-date.

Estimates Rise for 2016 and 2017

Given the big beat and more upbeat outlook, the analysts raised both 2016 and 2017 earnings estimates.

The 2016 Zacks Consensus Estimate jumped to $0.77 from $0.63 over the last month.

Although, that’s still negative earnings growth because it made $0.79 in 2015.

But analysts expect an explosion of growth in 2017, with the 2017 earnings estimate rising to $1.27 from $1.10 over the last 30 days. That is earnings growth of 64.5%.

Shares on a Wild Ride

Shares did nothing but go down after the initial spin-off but they appear to have bottomed during the dark times of January/February 2016.

Since then, they’ve spiked higher. They’re no longer cheap, with a forward P/E of 16.4.

Shareholders are rewarded with a dividend of 1% for their patience.

For investors looking for a chemical play with the possibility of big future earnings growth, Chemours should be on the short list.

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