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White Mountains Insurance Group, Bunge, Siderurgica Steel, Konami and AXA SA highlighted as Zacks Bull and Bear of the Day

For Immediate Release

Chicago, IL – April 05, 2016– Zacks Equity Research highlights White Mountains Insurance Group (WTM) as the Bull of the Day and Bunge Limited (BG) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Siderurgica Steel (SID), Konami Corp (KNMCY) and AXA SA (AXAHY).

Here is a synopsis of all five stocks:

Bull of the Day :

Headquartered in Hamilton, Bermuda, White Mountains Insurance Group (WTM) is a Property and Casualty insurer and reinsurer. The Company conducts its principal businesses through OneBeacon (specialty insurance), Sirius Group (global reinsurance), HG Global (U.S. municipal bond reinsurance) and White Mountains Advisors (Investment management).

The company currently has a market capitalization of $4.5 billion. Rising estimates sent the stock back to a Zacks Rank # 1 (Strong Buy) and it is the ‘Bull of the Day’.

Solid Fourth Quarter Results

The company reported adjusted comprehensive income of $264 million compared to adjusted comprehensive net loss of $7 million in the prior year quarter. Net income attributable to common shareholders was $268 million, compared to $70 million a year ago. Adjusted book value was $699 per share at December 31, 2015, up 6.8% for the quarter. Including the Sirius Group sale--expected to close in this quarter--adjusted book value was up 18% to $783 per share.

Returning Capital to Shareholders

During the quarter, the company repurchased $284 million, or about 387,000 shares, sending the share count to an all-time low of 5.6 million shares. Last month, the company announced its annual dividend of $1.00 per share. They also announced an additional authorization to repurchase up to one million common shares.

Positive Earnings Estimates Revisions

After impressive earnings, current year estimates have increased from $4.70 per share from $3.80 per share, before the results. Rising estimates sent WTM back to a Zacks Rank #1 (Strong Buy).

Solid Industry Outlook

Improving economic picture is positive for all insurers as their business volume is highly correlated to the health of the economy. Property & Casualty insurers in particular have seen a steady top-line growth in the past few months—a trend that is likely to continue.

Per Zacks Industry Outlook “no matter how the changing interest rate environment impacts insurers, mild catastrophe losses and continued influx of capital are expected to keep most lines of P&C insurance favorable for buyers.”

The Bottom Line

WTM is a Zacks Rank#1 (Strong Buy) stock. Further Zacks Industry rank of 84 out of 265 (top 32%) greatly increases the likelihood of short-to-mid- term outperformance.

Bear of the Day:

Headquartered in White Plains, NY, Bunge Limited ( BG) is a leading agribusiness and food company with over 35,000 employees and operations in about 40 countries. It is a global leader in oilseed processing, and grain & oilseed marketing. The company has four business segments 1) Agribusiness, 2) Sugar & Bioenergy 3) Food & Ingredients and 4) Fertilizers.

The company IPO’d in 2001 and has expanded though many significant acquisitions since then.

Disappointing Fourth Quarter Results and Outlook

The company reported Q4 earnings of $203 million, or $1.30 per share, compared with a loss of $54 million, or $0.43 per a share reported for the same quarter a year ago. Results missed the Zacks Consensus Estimate for earnings of $1.57 per share. This was the third consecutive quarterly miss for the company.

The management expects some improvement from 2015 going forward but not back to 2014 levels. Further, they anticipate results for the first half of the year to be seasonally weak, like in past years. They are planning to cut $125 million in expenses this year.

Falling Estimates

After poor results, analysts have revised their estimates for the company sharply downwards. Zacks Consensus Estimates for the current and the next fiscal year are now $5.22 per share and $5.59 per share respectively, down from $6.20 per share and $6.86 per share, before the results.

The Bottom Line

As the company generates most of its revenues from its Agribusiness segment, it remains vulnerable to weak agricultural commodity prices, weak global demand and foreign exchange volatility. The US has had bumper crops in the past three years, putting pressure on grain prices. Further rising dollar had made US grain exports less competitive for foreign buyers.

Zacks Industry Rank for Agricultural Products Industry is currently 203 out of 265 (bottom 23%).

Additional content:

Ride Beaten-Down Shares Up the Wall of Worry

Across this Global Week Ahead, clarification on U.S. Fed views comes from every angle. FOMC minutes come out Wednesday. Chairwoman Yellen speaks Thursday. Regional Fed bank leaders speak each individual day.

The Fed’s rate outlook needs to remain very flat to keep the bid alive for stocks everywhere. Expect Yellen’s comments (made in NYC) to be the most closely watched.

This U.S. bull is kept alive by a turn up in manufacturing, a turn up in oil and materials prices, and a tepid Fed rate hike outlook. All three factors need to remain in place for a sustained rally from higher share index levels. Can the S&P 500 get above 2,100? That is the next resistance technical to watch.

Outside the USA, traders likely focus again -- on riding beaten-down shares up the wall of worry!

Most major non-US indices should keep on with a recovery. A few ADR stocks signal bullish shifts in analyst outlooks.

(1) For example, are you looking for a new beaten-down Brazil stock play?

Take a look at Siderurgica Steel (SID). This company solidly beat on Q4-15 EPS recently. Iron ore prices have risen strongly in Q1-16. On March 31st, a Zacks #1 Rank (Stong Buy) rating was granted to SID. At $2 a share, there could be significant upside ahead.

The Brazilian economy remains in trouble. But that keeps the Brazilian real weak, which benefits its exporters.

(2) How about Japanese stocks? Japanese shares are beaten down too.

Japan’s leading indicators come out this week. They don’t look good. You will have to look past the palpable weakness in the Japanese economy to see the bargains on share prices.

Take a look at Konami Corp (KNMCY). This stock has a Zacks #1 Rank (Strong Buy) and holds a long-term Zacks VGM score of A (the Zacks Growth score of A is the sub-component that helps the most).

Konami Corporation and its subsidiaries produce and market game software for home video game systems, character products such as playing cards, amusement arcade games and gaming machines. They also operate health and fitness club facilities. These have dominant share in the Japanese market.

(3) Momentum has been on across European share indices.

On Tuesday, services PMIs come out for European countries. Forecasts look strong. The Eurozone composite PMI should be 53.7, which is the same strong overall reading as before.

For European ADRs, take a look at AXA SA (AXAHY). This multi-line insurance company has a $56 billion market capitalization. This stock just went back to a Zacks #1 Rank (Strong Buy).

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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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WHITE MTN INS (WTM): Free Stock Analysis Report
 
BUNGE LTD (BG): Free Stock Analysis Report
 
CIA SIDERUR-ADR (SID): Free Stock Analysis Report
 
KONAMI CORP-ADR (KNMCY): Free Stock Analysis Report
 
AXA SA -SP ADR (AXAHY): Free Stock Analysis Report
 
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