CHICAGO, May 22, 2012 /PRNewswire/ -- Zacks Equity Research highlights Pool Corporation (Nasdaq:POOL) as the Bull of the Day and ArcelorMittal (NYSE:MT) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Woori Finance Holdings Co. Ltd. (NYSE:WF), Bank of America Corporation (NYSE:BAC) and Citigroup Inc. (NYSE:C).
(Logo: http://photos.prnewswire.com/prnh/20101027/ZIRLOGO)
Full analysis of all these stocks is available at http://at.zacks.com/?id=2678.
Here is a synopsis of all five stocks:
Bull of the Day:
Pool Corporation's (Nasdaq:POOL) first-quarter 2012 earnings outperformed the Zacks Consensus Estimate. The company is a recognized leader in the industry. The potential for market growth is significant and cost-containment initiatives augur well for the business.
Pool's results reflect continued growth in its once-struggling green business. Amid a tough business environment in terms of weak growth in new pool constructions and faltering consumer confidence, Pool's revenue has been marching ahead and exhibits strong earnings power. The upcoming quarter is also seasonally strong.
The company expects the market condition to improve beyond 2012 as well. The company is focused on bolstering shareholder returns by share buybacks and dividend hikes. Hence, we rate the stock Outperform.
Bear of the Day:
We are maintaining our Underperform recommendation on ArcelorMittal (NYSE:MT) following our assessment of its first-quarter 2012 results. Earnings missed the Zacks Consensus Estimate while revenues beat the forecast.
The company's net debt climbed by roughly $1.1 billion in the quarter. ArcelorMittal also reduced its growth outlook for steel and announced a few divestments including the sale of its steel foundation distribution business to Nucor Corporation. These divestments are a part of the company's strategy to dispose its non-core assets, a move which it expects to continue in the second quarter.
ArcelorMittal remains affected by the challenging economic conditions in Europe. It is also exposed to volatility in steel pricing and tough competition. Our long-term Underperform recommendation on the stock indicates that it will perform below the broader market. Our price target of $13 is based on 6.5x our fiscal 2012 earnings estimate.
Latest Posts on the Zacks Analyst Blog:
BofA Entangled in Another Lawsuit
South Korea-based Woori Bank, a unit of
Woori Finance Holdings Co. Ltd.(NYSE:
WF), sued Merrill Lynch unit of
Bank of America Corporation(NYSE:
BAC). Woori's complaint accuses the investment bank of creating and selling seven collateralized debt obligations (CDOs) that were made up of residential mortgage-backed securities in 2005 and 2006.
CDOs typically repackage bonds and other assets into new securities. These are not traded on a public exchange, and hence allow the firms like BofA to generate fees by brokering deals between buyers and sellers. However, CDOs have performed dismally since these were invested in securities comprising sub-prime mortgages, which are known to have larger-than-average risk of defaulting in the market. Eventually, the market downturn shattered the investment banker's expectations and led to huge losses for the common investors.
Woori alleged that Merrill issued misleading statements and omissions related to the mortgage-backed securities and also concealed the risks associated with the securities. The company claims that the documents used in offering these securities contained untrue statements or omissions regarding the risks involved in these investments. These misrepresentations of the risks provoked investments, which virtually have no value at current levels.
Woori has filed the lawsuit in the New York State Supreme Court in Manhattan. The company demands for damages worth $143 million along with other penal charges.
Recently, the U.S. District Judge in Manhattan approved BofA's $315 million settlement with investors related to the Public Employees' Retirement System of Mississippi pension fund. The settlement was made to compensate the investors as BofA misled these investors by giving them deceptive information on risks associated with mortgage-backed securities issued by its Merrill Lynch unit.
BofA denied all the charges made against it. However, Merrill Lynch, which was purchased by the investment bank in 2009, averred that the losses faced by the investors were attributable to the downturn in economy and housing bubble.
Last week, Citigroup Inc. (NYSE:C) also faced similar legal charges made by Woori Bank. The complaint lodged claims that Citi misrepresented documents as an underwriter in the sale of CDOs and residential mortgage-backed securities, which turned Woori's $95 million investment, made during 2006 and 2007, into loss.
Numerous lawsuits alleging BofA of such wrongdoings would surely dent its reputation and financials. However, we believe that the investors, who have lost their hard-earned money in such investments, should feel relieved.
Shares of BofA currently retain a Zacks #3 Rank, which translates into a short-term Hold rating.Considering the fundamentals, we also maintain a long-term Neutral recommendation on the stock.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.
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 by visiting http://at.zacks.com/?id=7158.
About Zacks
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.
Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Follow us on Twitter: http://twitter.com/zacksresearch
Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
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.
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
support@zacks.com
http://www.zacks.com
SOURCE Zacks Investment Research, Inc.
