For Immediate Release
Chicago, IL – September 11, 2015 – Zacks Equity Research highlights Ohr Pharmaceutical Inc. (OHRP) as the Bull of the Day and Barnes and Noble (BKS) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Chevron Corp. (CVX), Exxon Mobil Corp. (XOM) and Halcon Resources Corp. (HK).
Here is a synopsis of all five stocks:
Bull of the Day:
I’m not sure if it’s the fact that I’ve recently taken over a service called Home Run Investor or if it’s the exciting baseball my Cubbies have been playing but I’ve got swinging for the fences on the brain. In today’s Bull of the Day I’ve decided to find a stock that could be one of the top performers of the year from here on out. Granted it’s been beat down a little bit here but that doesn’t mean this turnaround story can’t continue to develop.
Ohr Pharmaceutical Inc. (OHRP) is an ophthalmology research and development company whose lead product, Squalamine, is being studied as an eye drop formulation (OHR-102) in several company-sponsored and investigator sponsored Phase II clinical trials for various back-of-the-eye diseases. These diseases include wet-AMD, retinal vein occlusion, and proliferative diabetic retinopathy. In addition, Ohr has a sustained release micro fabricated micro-particle ocular drug delivery platform with several preclinical drug product candidates in development for glaucoma, steroid-induced glaucoma, ocular allergies, and protein drug delivery
Click “FOLLOW THE AUTHOR” above for free stock picks!!! And Twitter @bartosiastics
OHRP has managed to hang onto its Zacks Rank #1 (Strong Buy) despite price crumbling earlier in the year. The last earnings estimate revision for the current year saw EPS loss shrink from $1.18 to $1.06. What’s been a big shot in the arm has been a couple of huge earnings beats over the last two quarters. Last quarter a 10 cent beat followed up on the 5 cent beat we saw in Q1.
In its last quarterly report, the company noted that “clinical programs for its lead candidate OHR-102 continue to yield positive visual acuity data and there is now a growing body of evidence demonstrating that OHR-102 has potential to be an important treatment option for patients with various of the back eye diseases.” The data the company has collected are helping to design a Phase 3 clinical program with OHR-102 they expect to start before the end of 20
Bear of the Day:
I’m a little torn about today’s Bear of the Day. I don’t want to throw shade on a place I genuinely appreciate hanging out at. Heck, I remember when heading to one of their locations was the thing to do. Grabbing a coffee and reading magazines while you hang out with your buddies. Ah, the good ole days. That’s just the thing though, that was then, this is now. Competitors have carved this place up and left it as a carcass of its old self.
Barnes and Noble (BKS) is scraping barrel bottom here as a Zacks Rank #5 (Strong Sell) in an industry that ranks in the Bottom 29% of our Zacks Industry Rank. Those competitors I was talking about, how about a little company by the name of Amazon. It’s tough to keep on cranking out the hits when you’ve got the genius of Jeff Bezos aiming to take you out.
The funny part is, Amazon has already dealt most of the damage it’s going to on Barnes and Noble. I mean, it’s 2015 already. Not like online book-selling is anything new. Plus, AMZN has moved on to bigger and better things like the cloud. Books are so…1998.
That may be the reason why shares have struggled also. As people look to the digital medium more and more for their content the old school business of books is lagging behind. It’s a shame too because there’s something about the smell of all those books that makes me feel smarter.
What smarts though is last quarter’s abysmal report. Our Zacks Consensus Estimate called for 12 cents EPS. BKS came in with a 68 cent LOSS. That’s following a 37 cent loss the previous quarter and two quarterly disappointments before that. No wonder the consensus for the current quarter has dropped from a 24 cent EPS estimate all the way down to a 30 cent loss. Not heading in the right direction there.
Additional content:
Don’t Catch a Falling Knife: Sell Chevron
On Sep 8, Zacks Investment Research downgraded Chevron Corp. (CVX) – the No. 2 U.S. energy producer – to a Zacks Rank #5 (Strong Sell).
Why the Downgrade?
The commodity price rout has brutalized Chevron’s upstream business segment revenue and earnings. What’s more, the outlook remains grim, too, with fundamentals suggesting that the odds are firmly stacked against a sustained crude rally. That’s the reason we are predicting a 63% drop in Chevron’s EPS this year.
Deep in the red for more than a year, the company’s stock price have declined precipitously for good reason. Shares remain down about 33% year-to-date, and longer-term have dived 40% in the last 12 months -- a significant fall considering its status as a ‘traditionally defensive stock.’
Detailed Analysis
Similar to other companies exploring for and producing oil and gas, the results of Chevron’s upstream division is directly exposed to commodity prices. Consequently, with oil price collapsing to its lowest level in 6½ years and natural gas unable to break the $3 barrier, the second-largest U.S. oil company by market value after Exxon Mobil Corp. (XOM) has seen its revenues, earnings and cash flows hit hard.
However, it must be glad it did not let go of its refineries when many others did. The company has been benefitting from strong downstream performance. But even that has been not enough to counter the faltering sales of its exploration and production business.
In order to survive the cataclysmic energy-price scenario, the integrated major – long considered a safe harbor with a strong balance sheet and substantial dividend – is being forced to offload assets.
As it is, Chevron is suffering from marginal or falling returns, reflecting its struggle to replace reserves, as access to new energy resources becomes more difficult. Given their large base, achieving growth in oil and natural gas production is anyways a challenge for these companies over the last many years.
If that was not enough, it has been left bleeding by skyrocketing capital expenses. Chevron has pegged its 2015 capital budget at around $35 billion. But it continues to struggle to grow production despite spending billions in capital expenditures. Last year, the San Ramon, CA-based oil and natural gas powerhouse said its total volume of crude oil and natural gas averaged 2,571 thousand oil-equivalent barrels per day (MBOE/d), down 1% from 2013.
Therefore, the two energy company’s huge exploration and drilling expenditure has failed to augment output. With fewer oil and gas to sell, the firm is not being able to generate enough cash from operations to take care of their rising spending and shareholder payouts. This has forced the likes of Chevron to take more debt in the face of slipping cash balance.
Add to this the slump in oil prices, and it does raise some questions regarding the company’s ability to finance shareholder returns. Notwithstanding the fact that Chevron has maintained its dividend at $1.07 a share, there is no doubt that its balance sheet is under pressure from spiraling capital spending and shareholder distributions.
Stocks That Warrant a Look
While we expect Chevron to perform below its peers and industry levels in the coming months and see little reason for investors to own the stock, one can look at Halcon Resources Corp. (HK), which holds a Zacks Rank #1 (Strong Buy).
Get today’s Zacks #1 Stock of the Day with your free subscription to Profit from the Pros newsletter:
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.
About the Analyst Blog
Updated throughout every trading day, the Analyst Blog provides analysis from Zacks Equity Research about the latest news and events impacting stocks and the financial markets.
About Zacks Equity Research
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.
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today. Find out What is happening in the stock market today on zacks.com.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
OHR PHARMACEUT (OHRP): Free Stock Analysis Report
BARNES & NOBLE (BKS): Free Stock Analysis Report
CHEVRON CORP (CVX): Free Stock Analysis Report
EXXON MOBIL CRP (XOM): Free Stock Analysis Report
HALCON RESOURCS (HK): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research