For Immediate Release
Chicago, IL – March 16, 2015– Zacks Equity Research highlights Monster Beverage (MNST-Free Report) as the Bull of the Day and American Public Education (APEI-Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on DISH Network Corp. (DISH-Free Report), Verizon Communications Inc. (VZ-Free Report) and Sony Corp. (SNE-Free Report).
Here is a synopsis of all five stocks:
Bull of the Day:
Over the last few years, we have seen tons of upstart, smaller companies break in and challenge the behemoths of the space. Be it Under Armour against Nike or Chipotle becoming the fast food standard in the arena in which McDonald’s has long reigned, smaller (relatively speaking) companies are taking a bite out of the leaders in the space.
Another great example of this trend is with Monster Beverage (MNST-Free Report). The once unknown firm has risen to prominence and is now a $23 billion company. And while the company is best known for its namesake of Monster Energy drinks, MNST has branched out into sodas, juices, and teas too, becoming a formidable player in the sector.
Though MNST has already seen great growth, the company actually has solid prospects to continue this run well into the future. This is especially true when investors look to recent earnings estimate revisions as analysts seem to still be bullish on the company’s prospects.
Over the past thirty days, it is hard to find an analyst that has not become more bullish on MNST. For the current year, the current quarter, and next year time frames, not a single analyst in our consensus has lowered their estimate, while eight have raised their estimates for the current year time frame alone.
These moves have led to a modest increase in the consensus too, showing just how much analysts believe in the near term prospects of MNST. And with the latest revisions to earnings estimates, MNST is expected to post EPS growth of 20% both this year and the next.
And while these lofty expectations might be a little concerning to some, it is worth noting that MNST is riding a nice winning streak when it comes to earnings season, including its most recent report where it beat estimates by 22%. While a series of misses are before this nice run, it may just be that MNST has finally figured out to match estimates and clearly this is paying off for Monster stock.
Bear of the Day:
It is appears as though the golden age in for-profit education companies is nearing an end. Students are starting to question the value of degrees from many institutions in this space, while the government seems poised to move more student loan debt into a position that can be wiped out in bankruptcy.
If these trends weren’t enough, many ‘traditional’ schools have moved into the online university realm, dulling the appeal of some for-profit education centers in the process. So clearly, competition and a changing environment are really having a negative impact on a number of companies on this space, making them very precarious investments right now.
One company that exemplifies this negative trend is undoubtedly American Public Education (APEI-Free Report). This for-profit education company focuses on two segments—American Public Education and Hondros College of Nursing—and it has been under pressure in this difficult environment.
The company has seen wild swings lately, and shares are easily underperforming the S&P 500 both YTD and over the past year. But unfortunately for APEI, this doesn’t look likely to be the end of the trend by a long shot. This is especially true if investors look to recent earnings estimate revisions which suggest that more pain is on the way.
Analysts appear to be universally bearish on APEI’s recent prospects, as it is nearly impossible to find someone who has raised their outlook for the company’s earnings in the past two months. Instead, we have witnessed six revisions lower in the past thirty days for the full year period, and four lower in the past 30 days for the current quarter.
But it is the magnitude of these revisions which is the real story, as analysts now expect APEI to earn just 49 cents a share in earnings this quarter, a far cry from the 62 cents a share that was projected just a month ago. It is now expected that APEI will have a year over year earnings contraction of over 16%, further showcasing the bearish short term trend.
Additional content:
Internet TV Flourishes: Telecoms Join In
Internet TV is gradually gaining market traction in the U.S. Of late, the legacy pay-TV industry in the country has been facing severe competition from online video streaming service providers. The low-cost over-the-top video streaming service has resulted in massive cord cutting that is currently threatening the pay-TV business model. Internet TV has emerged as a strong alternative to counter this competitive threat.
Technically, Internet TV is somewhat similar to pay-TV offerings. Internet TV shows can be viewed using a broadband connection and mobile gadgets like tablets, smartphones, Roku box, smart TV, to name a few. To sum it up, Internet TV offers a TV Everywhere experience to subscribers. We believe that the growing deployment of super-fast 4G LTE wireless technology and significant adoption of portable mobile devices are the primary reasons propelling the popularity of Internet TV.
In Feb 2015, DISH Network Corp. (DISH-Free Report), the second largest satellite TV operator, commercially launched its Internet TV service called “Sling TV” throughout the U.S. The Sling TV service is available for $20 a month and offers several channels including ESPN, ABC and Disney Channels of Walt Disney, along with HGTV, Food Network and Travel Channel of Scripps Networks Interactive and several AMC Network channels. Customers will also be able to access add-on packages for an additional $5 per month.
Recently, Verizon Communications Inc. (VZ-Free Report) announced that its Internet TV offering will include channels for AwesomenessTV and DreamWorksTV, and will feature more than 200 hours of original programming. Verizon stated that its targeted audience will be teens and young adults who will be served largely through mobile video offerings. The company seeks to focus on two different categories of viewers through its Internet TV service and fiber-based FiOS TV offerings.
In the same league, a couple of days ago, the U.S. division of Sony Corp. (SNE-Free Report) announced that it will launch its new PlayStation Vue Internet TV service in New York, Chicago and Philadelphia within the next two weeks, followed by a national rollout later this year. Under this service, Sony is likely to offer a large array of top-rated channels from 21st Century Fox, CBS, Comcast’s NBC Universal and Viacom. Although Sony has not revealed its pricing plan, several industry analysts estimated that the price for the offering could range from $60-$80 per month.
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MONSTER BEVERAG (MNST): Free Stock Analysis Report
AMER PUB EDUCAT (APEI): Free Stock Analysis Report
DISH NETWORK CP (DISH): Free Stock Analysis Report
VERIZON COMM (VZ): Free Stock Analysis Report
SONY CORP ADR (SNE): Free Stock Analysis Report
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