For Immediate Release
Chicago, IL – January 30, 2017 –Zacks Equity Research highlights Kronos Worldwide (NYSE: KRO – Free Report ) as the Bull of the Day and TiVo (NASDAQ: TIVO – Free Report ) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Las Vegas Sands (NYSE: LVS – Free Report ), Wynn Resorts (NASDAQ: WYNN – Free Report ) and MGM Resorts (NYSE: MGM – Free Report ).
Here is a synopsis of all five stocks:
Bull of the Day :
The rally since Election Day has brought some interesting industries into light. Most of the time when I’m talking about rallies I’m talking about higher beta industries on the move. After all, industries that are higher beta, by definition move more than the rest of the market, so it’s logical to think these higher beta industries would do better during a rally. When I think high beta I’m usually thinking about tech or biopharma. We are going to have to change our definition to include chemicals as long as this rally keeps moving.
Today’s Bull of the Day Kronos Worldwide (NYSE: KRO – Free Report ) is a higher beta stock on its own with a beta of 2.35. It’s in the diversified chemicals industry that we have in the Top 30% of our Zacks Industry Rank. Kronos is a global producer and marketer of value-added titanium dioxide pigments. The company along with its distributors and agents sells and provides technical services for its products to over 4,000 customers in 100 countries around the world, with the bulk of its sales coming in Europe and North America. I know titanium dioxide doesn’t sound the wave of the future but it’s used to color things like paint and sunscreen.
I don’t expect to turn you all (or myself) into PhDs in Chemistry in this short article but we don’t have to be experts to see the effect on the numbers here for the stock. Analysts have gone bullish recently, increasing their earnings estimates for the current year and next year. Our current year Zacks Consensus Estimate has gone from 13 cents to 21 cents over the last sixty days. Next year’s number has gone from 25 cents to 36 cents. That 11 cents may not sound like a lot but when you’re talking about a stock that’s trading at 36 times forward P/E, that amounts to almost $4 on a stock that’s trading in the $13s.
Bear of the Day :
I have a family member who still has an AOL email address. He used their ISP until the bitter end. I’m pretty sure he was using a 56k modem well after most of us got rid of our landlines. He’s made the move to Netflix but hasn’t yet made the move to streaming. One in the mailbox and one on the way. Not to make fun of him or anything, he’s just an old school kind of guy. I respect that.
The only reason I know that today’s Bear of the Day still has a product available is him. He’s still got his TiVo (NASDAQ: TIVO – Free Report ). When TiVo dropped it was awesome. It was a smart way to record your favorite TV shows and play them back at your leisure, on-demand. It also had a neat feature that would suggest shows you should check out and recorded them for you so you could watch them. Kind of like Pandora and their “Music genome project” only for TV shows. But something happened that derailed TiVo from have a strong hold on TV sets across the world. Streaming on-demand became a much bigger thing.
Analysts have taken note of TiVo’s demise. They have come out and dropped their earnings estimates for the current year and next year to reflect their bearish sentiment. Our Zacks Consensus Estimate for the current year has dropped from $2.10 to $1.23. Next year’s numbers have gone from $2.04 down to $1.39. Those are a couple of major hair-cuts and a big drag on the stock price.
Additional content:
After WYNN and LVS Earnings, Should You Buy MGM Stock?
It was a big week for the gaming industry, as major casino operators Las Vegas Sands (NYSE:LVS – Free Report ) and Wynn Resorts (NASDAQ: WYNN – Free Report ) both reported earnings. These announcements included mixed results for each company, and with MGM Resorts (NYSE: MGM – Free Report ) set to report in the coming weeks, investors will want to learn all they can from these reports before making a play on MGM.
LVS and WYNN
Las Vegas Sands posted fourth-quarter earnings of 62 cents per share, which fell short of the Zacks Consensus Estimate by three cents, while Wynn Resorts recorded earnings of 50 cents per share, well below the Zacks Consensus Estimate of 67 cents.
(Also Read: Las Vegas Sands Misses on Q4 Earnings, Stock Down )
However, the real story was in revenues. LVS posted quarterly net revenues of $3.08 billion; this was a 7.4% year-over-year increase but lagged behind our consensus estimate by over 2%. While the opening of the company’s new Parisian Macao resort helped LVS record somewhat better performance in the Asian gambling hotspot, market share in the region was disappointing.
On the other hand, Wynn Resorts—despite its earnings miss—pleased investors with better-than-expected revenues. The company’s revenues of $1.30 billion surpassed the Zacks Consensus Estimate of $1.25 billion by 4%. Moreover, revenues increased 37.3% on the back of Wynn Palace opening.
(Also Read: Wynn Resorts Stock Up Despite Earnings Miss in Q4 )
The impressive performance of the Wynn Palace was partially offset by a slump at the company’s other major Asian property, Wynn Macau, as well as a 2% decline in Las Vegas revenues. Nevertheless, investors clearly favored Wynn’s performance in Macao over Las Vegas Sands’.
MGM Earnings Preview
MGM Resorts is expected to report its fourth-quarter earnings results before the market opens on February 16. Our current consensus estimates call for earnings of 14 cents per share and revenues of $2.41 billion, which would represent year-over-year growth of 1,500% and 10%, respectively.
Furthermore, the Most Accurate Estimate currently sits seven cents higher than the Zacks Consensus Estimate; this gives MGM a positive Earnings ESP of 50%, and paired with its Zacks Rank #2 (Buy) ranking, this indicates that a positive surprise is more likely.
The key for MGM will be exactly what impacted Las Vegas Sands and Wynn Resorts: performance in Macao. The fourth quarter was mostly likely a tough period for MGM in Macao, as the openings of its competitors’ new properties probably created stiff competition.
MGM has its own new Macao property on the way, and investors should expect the new “MGM Cotai” to boost revenues when its opens in 2Q17. For now, MGM’s performance in the region will hopefully be lifted by an overall bump in tourism to the hotspot, and new company initiatives like upgraded main gaming floor products and updated marketing initiatives could pay off big.
While we won’t know exactly how MGM performed until its releases its report, the company has seen favorable estimate revision activity and is poised to post solid growth. With the casino industry showing some signs of life, things are shaping up well for MGM investors this quarter.
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About the Bull and Bear of the Day
Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.
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Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous analyst coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
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Kronos Worldwide Inc (KRO): Free Stock Analysis Report
TiVo Corporation (TIVO): Free Stock Analysis Report
Las Vegas Sands Corp. (LVS): Free Stock Analysis Report
Wynn Resorts, Limited (WYNN): Free Stock Analysis Report
MGM Resorts International (MGM): Free Stock Analysis Report
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