Monthly Archives: December 2016

Caterpillar: Zacks’ Bear of the Day Play

Thanks to the recent OPEC deal and a better economic outlook, investors are once again returning to the energy sector. Estimates have also been on the rise for this market too, and the energy segment now has a top 20% sector rank heading into 2017.

But with such strength, how do you find the best positioned names? Well, looking at some of the promising industries in the oil sector which look to benefit from recent trends is an excellent idea. In particular, companies in the exploration market look to perform quite well, while a U.S-focus isn’t going to hurt matters either.

In terms of these companies, one that just received an upgrade and could be worth a closer look is Newfield Exploration (NFXFree Report) . Not only has this company just received a bump in its rank, but the stock has seen rising earnings estimates and is down a bit from its 2016 highs, making it a perfect candidate for a bounce in 2017.

Recent Estimates

Analysts have been nearly universally raising their estimates for NFX stock, as the company has seen 13 estimates go higher in the past two months compared to zero lower, while we have seen twelve estimates go higher for the following year compared to zero lower.

While this is certainly impressive, the magnitude of the estimate increases is arguably even more astounding, as the company has seen the consensus estimate surge by about 37% for the full year and 43% for the next year time frame. Add in the fact that the most recent estimates for NFX have been even more positive than the consensus—5.6% higher to be more exact—and you can see why a bullish story is developing, even if the stock price hasn’t gone in the right direction as of late.

NEWFIELD EXPL Price and Consensus

NEWFIELD EXPL Price and Consensus | NEWFIELD EXPL Quote

No wonder shares of NFX have a Zacks Rank #1 (Strong Buy) and why we are looking for outperformance from this stock in the New Year.

Bottom Line

The oil industry looks to be on the upswing in 2017 and the sector has seen rising estimates almost across the board. This means that there are several strong companies to pick from in this group and a bunch of great industries too.

One that stands out in this strong group is the exploration market and NFX in particular. This company has seen surging estimates and it was actually just upgraded to ‘strong buy’ territory within the past week. So, consider using the recent dip in shares of NFX to take a closer look at this company which could be in a great position to have a stellar start to 2017 as this industry continues to make a comeback in the New Year.

Zacks’ Top 10 Stocks for 2017

In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?

Who wouldn’t? As of early December, the 2016 Top 10 produced 5 double-digit winners including oil and natural gas giant Pioneer Natural Resources which racked up a stellar +50% gain. The new list is painstakingly hand-picked from 4,400 companies covered by the Zacks Rank.

Be among the very first to see it>>

In-Depth Zacks Research for the Tickers Above

Normally $25 each – click below to receive one report FREE:

NEWFIELD EXPL (NFX) – free report >>

Newfield Exploration: Zacks’ Bull of the Day Play

Thanks to the recent OPEC deal and a better economic outlook, investors are once again returning to the energy sector. Estimates have also been on the rise for this market too, and the energy segment now has a top 20% sector rankheading into 2017.

But with such strength, how do you find the best positioned names? Well, looking at some of the promising industries in the oil sector which look to benefit from recent trends is an excellent idea. In particular, companies in the exploration market look to perform quite well, while a U.S-focus isn’t going to hurt matters either.

In terms of these companies, one that just received an upgrade and could be worth a closer look is Newfield Exploration (NFXFree Report) . Not only has this company just received a bump in its rank, but the stock has seen rising earnings estimates and is down a bit from its 2016 highs, making it a perfect candidate for a bounce in 2017.

Recent Estimates

Analysts have been nearly universally raising their estimates for NFX stock, as the company has seen 13 estimates go higher in the past two months compared to zero lower, while we have seen twelve estimates go higher for the following year compared to zero lower.

While this is certainly impressive, the magnitude of the estimate increases is arguably even more astounding, as the company has seen the consensus estimate surge by about 37% for the full year and 43% for the next year time frame. Add in the fact that the most recent estimates for NFX have been even more positive than the consensus—5.6% higher to be more exact—and you can see why a bullish story is developing, even if the stock price hasn’t gone in the right direction as of late.

NEWFIELD EXPL Price and Consensus

NEWFIELD EXPL Price and Consensus | NEWFIELD EXPL Quote

No wonder shares of NFX have a Zacks Rank #1 (Strong Buy) and why we are looking for outperformance from this stock in the New Year.

Bottom Line

The oil industry looks to be on the upswing in 2017 and the sector has seen rising estimates almost across the board. This means that there are several strong companies to pick from in this group and a bunch of great industries too.

One that stands out in this strong group is the exploration market and NFX in particular. This company has seen surging estimates and it was actually just upgraded to ‘strong buy’ territory within the past week. So, consider using the recent dip in shares of NFX to take a closer look at this company which could be in a great position to have a stellar start to 2017 as this industry continues to make a comeback in the New Year.

Zacks’ Top 10 Stocks for 2017

In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?

Who wouldn’t? As of early December, the 2016 Top 10 produced 5 double-digit winners including oil and natural gas giant Pioneer Natural Resources which racked up a stellar +50% gain. The new list is painstakingly hand-picked from 4,400 companies covered by the Zacks Rank.

Be among the very first to see it>>

In-Depth Zacks Research for the Tickers Above

Normally $25 each – click below to receive one report FREE:

NEWFIELD EXPL (NFX) – free report >>

Bed Bath and Beyond: Zacks’ Bear of the Day Play

Anyone that has bought a new house or moved recently is familiar with Bed Bath & Beyond (BBBYFree Report) . The company has a wide range of home goods and key products for furnishing a new place, making it a go-to spot for a variety of gadgets and home needs.

However, people are probably familiar with another aspect of Bed Bath & Beyond, their never-ending coupons. I know that my place is filled with unused Bed Bath & Beyond coupons, while I never even considering buying something from there without one. Sure, they have made some changes to this program over the years—such as reducing the percentage off after a certain time—but I know a new one is either in my mailbox right now, or is going to be there soon.

Due to this heavy reliance on coupons and the increasing threat of online competition, it has been a pretty rough stretch for Bed Bath and Beyond ( (BBBYFree Report) investors. Shares are down about 16% year-to-date in what has otherwise been a great year for the markets, while the company has lost about 46% over the past two years as well.

But as bad as things have been for BBBY, the pain might not be over just yet. That is at least the case if we look to recent earnings estimates for the stock, as these have been pretty negative across the board.

Recent Estimates

In just the past week, we have seen ten analyst estimates go lower for the current quarter (compared to zero higher), while we have seen a dozen estimates go lower for the current year and next year, with zero higher in either time frame. And with a pretty sluggish history in earnings season—including three straight misses—it is hard to have confidence in BBBY for 2017.

This is especially true when you consider what the recent estimate changes have done to the consensus estimate. In the past two months, the consensus estimate for BBBY has fallen by about 4.3% for the current quarter and 4.8% for the current year, while we also see even more significant drops for the next quarter and next year time frames too.

BED BATH&BEYOND Price, Consensus and EPS Surprise

BED BATH&BEYOND Price, Consensus and EPS Surprise | BED BATH&BEYOND Quote

 

Earnings are now expected to decline by about 10% for the current year, while sales are expected to tick up by less than 1%. No wonder the stock has a Zacks Rank #5 (Strong Sell), and why we are looking for more underperformance in the months ahead.

Other Picks

Clearly, Bed Bath and Beyond has some weak fundamentals and it may be poised for more turbulent trading in the weeks ahead. The industry isn’t looking that much better though, as the space has a bottom 40% industry rank, and the sector is in the bottom 20% too.

Still, there are a few decent choices in this corner of the retail market, at least if you know where to look. One that might have some potential in the New Year is Big 5 Sporting Goods (BGFVFree Report) , a company with a Zacks Rank #1 (Strong Buy) and an ‘A’ Grade for its fundamental score too.

This company is actually the only strong buy in its industry (at time of writing) and it has positive projected EPS growth this year, along with a P/S ratio of just 0.4. So, it looks to be a solid choice for retail investors in 2017, and especially better than the still poorly positioned Bed Bath and Beyond as we head into the New Year.

Zacks’ Top 10 Stocks for 2017

In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?

Who wouldn’t? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold.

Be among the very first to see them >>

In-Depth Zacks Research for the Tickers Above

Normally $25 each – click below to receive one report FREE:

BIG 5 SPORTING (BGFV) – free report >>

BED BATH&BEYOND (BBBY) – free report >>

Microchip Technology: Zacks’ Bull of the Day Play

What an incredible run it has been for the semiconductor industry!

The industry has produced numerous winners in recent months, while the space at large has easily crushed the S&P 500. In fact, the SOXX ETF tracking the market has gained nearly 40% year-to-date, easily crushing a still respectable gain of about 10.6% for the S&P 500.

But with such big moves, investors have to be worried if this trend can continue in the New Year too. While it might not be such a sector-wide surge again in 2017, a few still look promising in this environment, such as Microchip Technology (MCHPFree Report) .

Why MCHP?

While Microchip has also gained about 40% in 2016, the company still trades at a pretty reasonable valuation. It currently has a forward PE just above 20, and a PEG that is below the industry average and comes in at 1.65, suggesting the company isn’t overvalued when compared to its industry peers.

Additionally, Microchip has a great outlook on the momentum front too. The stock has a ‘B’ Grade for Momentum right now, while it has outclassed its peers on a 52-week price change, along with changes in earnings estimates too.

Earnings Estimates

In terms of estimates, it is hard not to like MCHP when you look at the company’s trend from this perspective. Analysts tracking the company have not lowered their earnings estimates for the company’s current quarter or current year in the past two months, while several have raised their outlooks.

Expectations have actually increased pretty significantly in just the past two months, as the full year estimate has gone higher by about 7.8% and the next year consensus has increased by 7.7%. The company is actually now projected to see EPS growth of roughly 29.5% for the current year, and double digit growth the following year as well.

Add in a pretty great track record in earnings season which includes just two misses since the start of 2013, and it shouldn’t be a surprise that MCHP has a Zacks Rank #1 (Strong Buy) and that we are looking for more outperformance from the company in 2017 too.

MICROCHIP TECH Price, Consensus and EPS Surprise

MICROCHIP TECH Price, Consensus and EPS Surprise | MICROCHIP TECH Quote

 

Bottom Line

The semiconductor industry still has a great rank overall, as the space MCHP finds itself in has a top 26% rank, and a top two sector rank as well. With these kinds of metrics, it isn’t a surprise that people are still feeling bullish on most companies in the space right now.

But with such great metrics on the earnings estimate front, solid momentum, and reasonable valuations, it is hard not to like Microchip more than its peers these days. So, if you are looking for a solid pick in the semiconductor world for 2017, definitely give MCHP a closer look for your portfolio.

Zacks’ Top 10 Stocks for 2017

In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?

Who wouldn’t? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold.

Be among the very first to see them >>

In-Depth Zacks Research for the Tickers Above

Normally $25 each – click below to receive one report FREE:

MICROCHIP TECH (MCHP) – free report >>

Six Flags Entertainment: Zacks’ Bear of the Day Play

Six Flags Magic Mountain is easily one of the top theme parks in the nation. Owned and operated by Six Flags Entertainment ( (SIXFree Report) , the park is arguably the company’s finest property and has some of the best roller coasters in the nation.

But just because a company’s product is great, it doesn’t mean that the underlying stock in the company makes for a top notch investment. This is definitely the case for SIX stock, as these shares might actually be ones to avoid in 2017, no matter what you think about the company’s properties.

Why SIX Could Struggle Based on Fundamentals

The fundamental picture for SIX isn’t great, and that is evident if investors look to the company’s VGM score which comes in at just a ‘D’ grade. This includes a Value Grade of ‘F’ and a Momentum Grade of ‘C’, giving SIX a weak outlook on both of these fronts.

In fact, the value metrics for some of the most followed ratios are especially poor for SIX, including an astronomical forward PE of 43. Add that to a P/S ratio that is more than double the industry average and a PEG approaching 5.5, and you have a great case against Six Flags stock from a value standpoint.

Earnings Too

However, there is more reason to worry about SIX, and that is evident if we look to the earnings estimate picture. Investors haven’t seen any estimates go higher for the stock in the past two months for the current quarter, current year, or next year time frames.

Thanks to this, the consensus estimate has been sliding for Six Flags Entertainment shares, pushing the full year consensus estimate to just $1.38/share in earnings, down from $1.45/share 60 days ago, and $1.87/share 90 days ago.

Obviously, this sliding trend isn’t something that investors want to see, and especially when you combine it with the weak value score. Add in a weak recent history in earnings season—including two straight misses—and it isn’t a great case for SIX stock to start 2017.

SIX FLAGS ENTMT Price, Consensus and EPS Surprise

SIX FLAGS ENTMT Price, Consensus and EPS Surprise | SIX FLAGS ENTMT Quote

 

No wonder shares of SIX have a Zacks Rank #5 (strong sell) and why we are looking for underperformance from the company to begin the New Year.

Other Picks

Fortunately for investors who want to stay in the leisure industry, the space actually does have a top 30% industry rank right now. This means that there are plenty of solid selections, and a host of companies that are better positioned for 2017 when compared to SIX.

One to watch in particular is Marcus Corporation (MCSFree Report) , as this company has a Zacks Rank #1 (Strong Buy) and it is riding a nice streak in terms of earnings beats too. This could be a better ticket for investors in the leisure market in 2017, at least when compared to SIX to start the year.

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 >>

In-Depth Zacks Research for the Tickers Above

Normally $25 each – click below to receive one report FREE:

SIX FLAGS ENTMT (SIX) – free report >>

MARCUS CORP (MCS) – free report >>

Goldman Sachs: Zacks’ Bull of the Day Play

In the aftermath of Trump’s victory, the financial sector has been one of the best performers to close out 2016. While banks have definitely led the charge, companies in the broker/dealer market have also been doing quite well and could be poised for more gains to start the New Year too.

One such company that investors might want to give a closer look is Goldman Sachs (GSFree Report) , arguably one of the most famous investment banking companies in the world today. The stock has skyrocketed about 33% since the election, easily trouncing an otherwise-respectable gain of about 6.5% for the S&P 500 in the same time frame.

Overbought?

Anytime a company goes up that much in a short time frame, and especially mega caps, investors have to be worried about a continuation of the trend. Fortunately for those looking at GS, the stock still has a forward PE below 16, which is actually less than the overall market right now. So, at least from that perspective, the stock can run a bit further in the New Year.

It is also important to note that GS has a great outlook from a momentum perspective, which includes an ‘A’ grade on that metric. The company has seen a price change that is far superior to its industry peers, while its change in earnings estimates has also been impressive.

Earnings Estimates

Speaking of changes on this front, the company has seen a rising consensus estimate for both the current quarter and the current year thanks to a flurry of analyst estimate increases. In fact, over the past two months, the current quarter estimate has gone higher by 6.5% while the full year estimate has increased by about 4.3% too.

But don’t worry about the company living up to these lofty expectations, as Goldman is riding a streak of four straight beats in earnings season, and it has only missed once in the past five years. No wonder the stock has a Zacks Rank #1 (Strong Buy), and why we are looking for more gains next year too.

GOLDMAN SACHS Price, Consensus and EPS Surprise

GOLDMAN SACHS Price, Consensus and EPS Surprise | GOLDMAN SACHS Quote

Bottom Line

Goldman is in an incredible industry right now that has a top 20% rank, while the sector (financials) is at the top of the charts too. Add that in to a great run on the momentum front and still reasonable metrics in terms of key valuation ratios, and it is a compelling story for GS investors heading into 2017.

So, if you are looking for a great pick in 2017 for the financial world, definitely give Goldman Sachs a closer look. This top ranked company could be a better buy in the New Year, and especially when compared to the somewhat overbought regional banks.

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, you should consider removing them 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 >>.

In-Depth Zacks Research for the Tickers Above

Normally $25 each – click below to receive one report FREE:

GOLDMAN SACHS (GS) – free report >>

Party City: Zacks’ Bear of the Day Play

The rally following Election Day has been nothing short of breathtaking. The rising tide has helped to lift all boats and pretty much every sector of the market is up. However, I’ve been warning people about blinding jumping in and buying any stock. You still have to do a little research to insure you’re buying stocks that have compelling EPS stories. What I mean by that is you need to find stocks that have had earnings estimates from analysts moving in the right direction or, at the very least, not continuing to sink.

One such stock that’s seen estimates move in the wrong direction is today’sBear of the Day Party City (PRTYFree Report) . Party City Holdco Inc. designs, manufactures, contracts for manufacture and distributes party goods, including paper and plastic tableware, metallic and latex balloons, Halloween and other costumes, accessories, novelties, gifts and stationery. It also operates specialty retail party supply stores primarily in the United States and Canada. Party City Holdco Inc. is based in Elmsford, New York.

The reason why the stock is a Zacks Rank #5 (Strong Sell) is the multiple earnings estimate revisions to the downside that have happened over the last sixty days. Four analysts have dropped their estimates for the current quarter while five have dropped their numbers for the current year. The bearish sentiment has taken the current quarter Zacks Consensus Estimate from 85 cents to 73 cents and has dropped the current year Zacks Consensus Estimate from $1.23 to $1.13.

The chart has been in a downward trending channel since the stock peaked under $20 in August of this year. Since then the stock has made a series of lower highs and lower lows. The dip down in November below $12 tested the May lows. Recently stocks been selling off aggressively after failing at the 50-day moving average earlier in the month. The commodity channel index is now under -200 indicating an extremely oversold condition in the short-term. This could lead to a little relief rally back to the 50-day.

Investors looking for other stocks in the same industry should check out Zacks Rank #2 (Buy) stocks Central Garden (CENTFree Report) and the Container Store (TCSFree Report) .

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 >>.

Micron: Zacks’ Bull of the Day Play

If you’ve been paying attention the last few weeks you’ve no doubt heard some of my bullish calls on today’s Bull of the Day Micron (MUFree Report) . Heading into the last earnings report I gave a bullish call spread trade for viewers on Bloomberg and my Zacks Live Trader service. The trade was a long January 20th $20.50/22 Call Spread that ended being fully in the money following the huge move on earnings.

Micron Technology, Inc. provides semiconductor systems worldwide. The company operates through four segments: Compute and Networking Business Unit, Storage Business Unit, Mobile Business Unit, and Embedded Business Unit. It offers DDR3 and DDR4 DRAM products for computers, servers, networking devices, communications equipment, consumer electronics, automotive, and industrial applications; mobile low-power DRAM products for smartphones, tablets, automotive, laptop computers, and other mobile consumer device applications.

DRAM prices are determined much like other commodities. There is a heavy reliance on supply and demand. As a result, prices are susceptible to huge spikes and harrowing drops. For example, a big manufacturer like Samsung having a recall on their phones will create shocks that impact DRAM prices in a negative fashion. Last year DRAM prices crashed and dragged down DRAM manufacturing stocks. That’s why you saw Micron drop from the mid-$30s to the single digits.

Along with depressed DRAM prices, analysts dropped their earnings estimates for Micron and other companies in the same industry. The good news is that trend has reversed and now there is a very bullish trend developing in DRAM pricing. As a result, analysts are aggressively increasing their earnings estimates for Micron.

Recently analysts have increased their earnings estimates for the current quarter, next quarter, current year and next year. The most drastic move can be seen in the current quarter’s numbers where we’ve seen our Zacks Consensus Estimate move from 14 cents to 45 cents for the current quarter. This aggressive movement has also pushed up the current year consensus from 75 cents to $1.76.

You can see the two megatrends in Micron over the last couple of years. The stock troughed along with DRAM pricing earlier this year. A retest of the lows in May under $10 preceded a surge that’s taken shares to $23.26 after a great earnings report had the stock gap up from $20.58. Shares are overbought here in the short term with the commodity channel index over 200.

Want to see all of today’s Strong Buys

Today’s Bull of the Day is just one of 220 Zacks Rank #1 stocks. Right now the full, up-to-the-minute list is available to you free of charge. There is no better place to start your own stock search. Plus you can access the full list of Zacks Strong Sells and a lot more of our private research. See the stocks free >>.

In-Depth Zacks Research for the Tickers Above

Normally $25 each – click below to receive one report FREE:

MICRON TECH (MU) – free report >>

Tupperware: Zacks’ Bear of the Day Play

The US dollar has been surging of late on expectations of higher growth and rising interest rates in the US. A strong dollar hurts companies that derive a significant portion of their earnings from outside of the US.

About the Company

Tupperware Brands Corporation (TUPFree Report) ) is a multi-brand, multi-category, relationship-based sales company. It primarily manufactures and sells preparation, storage, and serving solutions for the kitchen and home.

The company made its debut in 1946 and has now expanded its presence in almost 100 countries around the world.  Its sales force consists of independent contractors who market products directly to consumers.

As the company derives about 65% of its sales from emerging markets, it is a play on the growing middle class with rising incomes in these countries.

Disappointing Results and Guidance

Their earnings of $0.87 per share beat the Zacks Consensus Estimate of $0.80 per share but sales missed the consensus. Earnings were also above the high-end of their guidance in both dollars and local currency terms.

Emerging markets sales were up 5% in local currency terms and accounted for 71% of total but developed markets sales were down 5%

Management guidance of EPS between $1.37 and $1.42 for the fourth quarter was also below street consensus.

Downward Revisions

Due to weak guidance, quarterly and annual estimates have been revised downwards in the past few weeks. Zacks Consensus Estimates for the current quarter and year are now $4.32 per share and $4.53 per share respectively down from $4.34 per share and $4.68 per share, 30 days ago.

Negative estimates revisions send the stock to Zacks Rank # 5.

TUPPERWARE BRND Price, Consensus and EPS Surprise

TUPPERWARE BRND Price, Consensus and EPS Surprise | TUPPERWARE BRND Quote

The Bottom Line

While the stock looks attractive in terms of valuation and dividend yield, the company faces headwinds due to the rising dollar. For the time being, investors may like to avoid the stock.

Further, while the longer-term outlook for emerging markets looks bright, in the shorter-term they are likely to be hurt by rising rates in the US.

Better Play?

Investors looking for a better play in the Consumer Products industry could consider Ollie’s Bargain Outlet Holdings (OLLI)), a Zacks Rank # 2 (Buy) stock.

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 >>

In-Depth Zacks Research for the Tickers Above

Normally $25 each – click below to receive one report FREE:

TUPPERWARE BRND (TUP) – free report >>

Dave and Buster’s: Zacks’ Bull of the Day Play

Dallas based Dave and Buster’s Entertainment (PLAYFree Report) operates an arcade and restaurant chain that combines entertainment and dining in one location. The company was founded in 1982, when two friends Dave and Buster, who respectively ran a bar and an arcade side by side in Little Rock, AR, decided to combine the businesses. They IPO’d in 2014 with an offer price of $16 a share.

They currently operate 88 stores in the US and Canada, which target adults aged between 21 and 39, with average household income of approximately $75,000. They aim to provide their guests the experience of “Eat, Drink, Play, Watch” all in one location.

In addition to providing strong sports viewing package and promotions, they are also aim to provide compelling venues for corporate and social special event parties. Special events comprised ~11% of fiscal 2015 revenue.

Excellent Third Quarter Results and Improved Guidance

The company posted better than expected results for its third quarter, beating on both the top and bottom lines and also raised guidance for the fiscal year.

Earnings of 25 cents were way ahead of the Zacks Consensus Estimate of 13 cents per share and up 108% year-over-year. Revenues of $228.7 million also beat the Zacks Consensus Estimate of $213 million and were up 18.6% year-over-year.

The management raised their full-year guidance. They now expect total revenues to be in the range of $998 million to $1.003 billion and net income in the range of $86.5 million to $88.5 million.

Rising Estimates

After excellent results and upgraded guidance, analysts have raised estimates for the company. Zacks Consensus Estimates for the current and the next year are now $2.05 per share and $2.35 per share respectively, up from $1.93 and $2.23, before the results.

The company has a pretty impressive record of beating the estimates; in fact, it has never missed since it went public.

DAVE&BUSTRS ENT Price, Consensus and EPS Surprise

The Bottom Line

The company has a widely appealing and recognized brand that is highly differentiated from conventional casual dining. Games are the main brand differentiator for them as they aim to provide an experience that cannot be easily replicated at home. While many other restaurant chains have been struggling in an over saturated market, PLAY has been able to outperform the broader industry with their entertainment business.

Additionally with just 88 stores in the US and Canada, they have significant expansion potential.

Now see our private trades

Today’s Bull of the Day is a promising buy that we’re sharing with the public. Now would you like to look behind the curtain and view all our private portfolios? Starting today, for the next month, you can follow them in real time from value to momentum . . . from stocks under $10 to ETF and option plays . . . from insider trades to companies that are about to report positive earnings surprises (we’ve called them with 80%+ accuracy). You can even be privy to portfolios so exclusive that they are normally closed to new investors. Click here for all Zacks moves >>

Zacks Restaurant Recommendations: In addition to dining at these special places, you can feast on their stock shares. A Zacks Special Report spotlights 5 recent IPOs to watch plus 2 stocks that offer immediate promise in a booming sector. Download it free »

In-Depth Zacks Research for the Tickers Above

Normally $25 each – click below to receive one report FREE:

DAVE&BUSTRS ENT (PLAY) – free report >>