Zacks Bull and Bear of the Day Highlights: NVR, Darden Restaurants, Assurant, Radian Group and CIGNA
Zacks Equity Research
For Immediate Release
Chicago, IL – March 26, 2013 – Zacks Equity Research highlights NVR, Inc. (NVR) as the Bull of the Day and Darden Restaurants Inc. (DRI) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Assurant Inc. (AIZ), Radian Group Inc. (RDN) and CIGNA Corp. (CI).
The homebuilders were hot in 2012 and it looks to continue in 2013 as the housing market recovers. NVR, Inc. (NVR) is one that you don't hear about as much as the big housing names like Pulte and Lennar. But this Zacks Rank #1 (Strong Buy) is expected to grow earnings by the double digits in both 2013 and 2014.
NVR might not be familiar but its homebuilding segments probably are. It is a holding company that operates Ryan Homes, NVHomes, Fox Ridge Homes and Heartland Homes in 15 states. It also operates NVR Mortgage out of Virginia.
It's best known for Ryan Homes, which was founded in 1948 in the post-World War II boom and has built 365,000 single family homes, townhouses and condos across the country.
On Jan 24, NVR reported fourth quarter results and confirmed just how good the housing recovery really is. These are the kind of numbers you want to see out of the homebuilders right now. This recovery is no fluke.
Fourth quarter revenue jumped 27% to $943 million. New orders rose 22% to 2,625 units. The backlog also climbed by 35% to 4979 units.
Have you eaten at an Olive Garden lately? Fewer people are. Darden Restaurants Inc. (DRI) has been struggling to turn around its flagship Italian restaurant chain while sales are also down at its Red Lobster and LongHorn Steakhouse chains. Earnings are expected to slide 12.1% in Fiscal 2013 while it attempts to right the ship.
Darden operates 2000 of the most recognizable casual dining restaurants in the United States , including Olive Garden, Red Lobster, LongHorn Steakhouse, Bahama Breeze and the Capital Grille.
Olive Garden, its flagship restaurant, hit a rough patch in recent years as a stale menu and higher prices turned consumers off. The company has been forthright in acknowledging the problems, though, and is making changes including remodeling old restaurants and offering new menu items. Although, the changes won't come soon enough to save this fiscal year.
In February 2013, Darden shocked analysts with a bearish outlook for its fiscal third quarter. It projected same store sales down 4.6% with all three of its main restaurant brands getting hit hard. It also offered third quarter EPS guidance between $1.00 and $1.02, which was much lower than the Zacks Consensus Estimate of $1.13.
In response, all the analysts cut their estimates for the quarter and the full fiscal year. The Zacks Consensus for Fiscal 2013 has fallen to $3.15 from $3.37 since the announcement.
Assurant Inc. (AIZ) and the New York Department of Financial Services have entered into an agreement related to lender-placed insurance sold by the company's Specialty Property unit
Lender-placed insurance is also known as forced-placed insurance. It is the coverage purchased by the mortgage servicer on behalf of homeowners in the event of expiration or cancellation of the customer’s insurance or in case the proof of insurance is not validated. Lender-placed insurance coverage is necessary to protect the lender's interest in the property if damage was to occur and the customer had not maintained adequate coverage. It is comparatively more expensive than the insurance coverage the customer purchases because it must cover all properties, in all locations and in all conditions.
However, Assurant had sold the Lender-placed insurance policy to distressed homeowners at grossly overcharged rates.
Now, units of Specialty Property – American Security Insurance Company (ASIC) and American Bankers Insurance Company of Florida (:ABIC) have been ordered to make a penalty payment of $14 million. As per the agreement, Assurant will have to refund the excess premium charged from homeowners and lower its rates as well.
Assurant is also required to make changes to its lender-placed business practices to make it more compliant with the new regulations by the financial services department of New York .
Assurant will have to apply for its new lender-placed program and new rates in N.Y
Assurant faced a similar ruling from the California Department of Insurance last year and finally had to reduce premium in that state.
Assurant currently carries a Zacks Rank #3 (Hold). Other insurers such as Radian Group Inc. (RDN) and CIGNA Corp. (CI), which carry a Zacks Rank #2 (Buy), are worth considering.
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.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD from MIT Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment
Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=4582.
Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.
