For Immediate Release
Chicago, IL – August 23, 2019 – Zacks Equity Research MobileIron MOBL as the Bull of the Day, LG Display LPL as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Nordstrom JWN, Kohl’s KSS and Macy’s M.
Here is a synopsis of all five stocks:
Bull of the Day:
MobileIronis a Zacks Rank #2 (Buy) and it is the Bull of the Day. Normally we have a stock with a Zacks Rank #1 (Strong Buy) holding the title of Bull of the Day, but today I want to show you a stock that looks to be breaking out. With all the Trade Talk and Geopolitical drama dominating the headlines, this stock has moved steadily higher over the last few months and just broke up over $7 yesterday. Higher highs are coming for this stock so that 52-week mark of $7.42 is in sight.
MobileIron, Inc. provides mobile IT platform that enables enterprises to manage and secure mobile applications, content, and devices while offering their employees with device choice, privacy, and a native user experience worldwide. The company's MobileIron security platform also comprises MobileIron Threat Defense to identify zero-day threats on the device, across networks, and within client apps, and then initiates a security response, from notification to remediation of the threat; MobileIron Secure Applications for end-user productivity, such as enterprise app store, secure content, secure email and PIM, remote troubleshooting, and secure browsing applications, as well as MobileIron AppConnect, an SDK and wrapper that third-party developers integrate into their applications to provide security through additional encryption and advanced security controls. MobileIron, Inc. was founded in 2007 and is headquartered in Mountain View, California.
The earnings history is ok for MOBL, not great, but not bad either. I see two meets, a miss and one beat in the last four reports. The beat was 4 quarters ago and it was a monster. The company reported a gain of 2 cents when a loss of two cents was expected and that translates into a 200% positive earnings surprise. Over the course of the last 4 quarters, the positive average earnings surprise is 45%.
Over the last 60 days we have seen then estimate for this quarter slip by a penny. That move also caused the full year estimate to slide by the exact same amount. Next quarter is standing firm at a gain of 6 cents. For next year, the Zacks Consensus Estimate also holding still at $0.08.
For the next 12 months, there is not going to be positive earnings. But as you read in the last paragraph there will be positive earnings in 2020. That said, I see 10% topline growth and price to sales multiple of 3.7x. Margins are still negative for now, but I see some improvement over the last few quarters in operating margin.
Bear of the Day:
LG Display is Zacks Rank #5 (Strong Sell) and it is the Bear of the Day today. The stock dropped heading into earnings and then missed... but all is not lost. I held this stock in the Stocks Under $10 portfolio here at Zacks, and have to admit that not that it is at these lower levels, I am enticed.
LG Display Co., Ltd., formerly known as LG Philips LCD Co., Ltd., primarily manufactures and sells thin film transistor liquid crystal display (TFT-LCD) panels. The Company supplies its products to original equipment manufacturers and multinational corporations. LG Display offers TFT-LCD panels in a range of sizes and specifications primarily for use in televisions, notebook computers, and desktop monitors, as well as for handheld application products, such as mobile phones; and medium and large size panels for industrial and other applications, including entertainment systems, portable navigation devices, e-paper, digital photo displays, and medical diagnostic equipment. LG Display Co., Ltd. is based in Seoul, the Republic of Korea.
As I look at the earnings history I seet he recent report has the company coming up only 1 penny short. That is the smallest of misses and on its own should not be a reason to take a pass on this stock.
Estimates Have Moved Down
The losses are getting bigger at LPL, with the current quarter moving from a loss of 2 cents to a loss of 26 cents in just 60 days. THe full year saw estimates adjusted lower to a loss of $1.10 from a loss of $0.34.
2020 numbers are showing the company earnings money, and we know that investors love to get in on the switch. Moving from a loss to a gain is an important distinction that some investors care a lot about.
The 2020 Zacks Consensus Estimate has LPL earnings 17 cents per share.
With no earnings, the forward PE is an NA for us. I see the price to book is only 0.3x so deep value investors are really ready to kick the tires. This stock could see a huge lift in a China deal comes... but most indicators are telling us that could be a long ways off.
Have Department Stores Fallen into Value Territory?
Nordstrom stock soars following a mixed earnings report last night (August 21st) with shares up more than 16% in today’s trading. Were earnings so impressive that investors and traders rushed to buy scores of JWN or is their more to the story?
Department retail stocks have gotten hammered over the past 52-weeks, with Kohl’s down over 40% and Macy’s down over 50%.
What is causing this mass exodus of department store stocks and why were mixed earnings results enough to send JWN surging over 15%?
There is a significant consumer shift occurring in society today that is centered on value and convenience. These massive, seemingly unorganized department stores aren’t meeting the next generation’s consumer needs. In my article, Who Will Survive the Retail Apocalypse?, I touch on retailers that have been able to ride this evolving consumer wave and those that haven’t. In this article, I will focus on department stores and their future in the retail world.
Macy’s Q2 results provoked a devastating blow to its share price as well as its competitors. It missed big on both top and bottom-lines illustrating its worst Q2 EPS in a decade and worst Q2 sales in 9 years. M’s share price has plummeted almost 20% since its earnings release last week. Macy’s poor results was a cautionary tale to investors about the department store earnings to come.
Expectations for these department stores have dropped significantly over the past year with analysts displaying considerable conservatism in their estimates. A big miss on a conservative forecast is going to kill any stock, which we saw with Macy’s. An EPS beat on a stock that has been battered down for the last year is going to release some of the pessimistic sentiment. This is what is happening with Nordstrom.
Nordstrom released earnings last night and had a big EPS upside surprise which sent shares surging, despite a marginal topline miss and lowered guidance. Some of this bounce can be credited to short covering. Short interest on JWN has been growing throughout 2019 and traders decided it was time to cash out.
This week has seasonally low volume due to end of summer vacations, which may also have attributed to the massive upside that JWN experienced.
Nordstrom’s current forward P/E is lowest it’s been since the great recession in 2008. This stock may have been traded down further than its intrinsic value, and all investors needed was a small catalyst (EPS beat) to jump back in. This is likely the same reason that shorts were covering. All stocks, no matter how poor they are performing, have a price in which they become attractive. JWN was (and may still be) in an attractive price range for any value investor, and the 5.6% dividend gives you a little more comfort in purchasing this stock.
Macy’s appears to be trading at its lowest forward P/E ever with its most recent earnings sinking the stock to its lowest price in over a decade. This stock may be trading below its fair value with pessimistic traders and investors keeping it down. I am not rushing to buy shares Macy’s, but there is an argument to be made that this is a value buy, especially when the stock is yielding an almost 10% dividend. Macy’s is not at risk of default yet (though their credit rating is toeing junk-bond levels) and with expectations so low it wouldn’t take much for this stock to get a boost.
Millennials have taken over as the largest consuming group, and they are shaking up the retail space. This generation of consumers are increasingly online, and so are their shopping patterns. Millennials are attracted to convenience and value when making a purchase. Big department retailers are unable to provide these attributes.
These department store stocks may have been beaten down enough to once again provide value to your portfolio with significant dividend yields hedging some of the risks of buying into a potentially dying sector.
Department stores have the potential to change consumer sentiment in their favor if they can effectively shift their businesses models. This is easier said than done, but I am confident that some of these department retailers will be successful in this evolving market.
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Click to get this free report MobileIron, Inc. (MOBL) : Free Stock Analysis Report LG Display Co., Ltd. (LPL) : Free Stock Analysis Report Nordstrom, Inc. (JWN) : Free Stock Analysis Report Kohl's Corporation (KSS) : Free Stock Analysis Report Macy's, Inc. (M) : Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research