Time to Take a Chance on the Fertilizer Stocks?

Welcome to Episode #46 of the Zacks Market Edge Podcast.

Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.

In this episode, Tracey is joined by Jeremy Mullin, editor of Zacks Counterstrike portfolio service.

Tracey and Jeremy have covered commodities and commodity stocks several times on the Market Edge but this week they cover one of the most beaten down areas in the commodity sector: the fertilizer stocks.

Remember those stocks? Investors have abandoned this industry over the last several years as the prices of the fertilizers have plunged. Combined with the downturn in farming, and with farming incomes, and it has been a tough couple of years for this industry.

But is there some hope heading into the second half of 2016 and into 2017?

And are the stocks now undervalued?

Tracey and Jeremy take a look at the big, pure fertilizer plays in the United States and Canada.

Outlook for the Industry Giants

1. CF Industries (CF): Nitrogen producer. Earnings will be down 66% in 2016.

2. Mosaic (MOS): World’s largest supplier of phosphates and potash. Earnings expected to plunge 81% this year.

3. Potash (POT): Large potash producer. Earnings forecast to decline 63% in 2016.

All three companies pay a dividend and the yields are high.

Tracey and Jeremy discuss how “safe” these dividends are and talk about which company has already cut its dividend not just once, but twice.

Additionally, the agribusiness companies, such as Agrium (AGU) and The Andersons (ANDE) which also produce fertilizers, are also feeling the pain.

But does their diverse business model help them to ride out the storm?

Fertilizers used to be Wall Street darlings. Tune in to this week’s podcast to find out if they can get back to that place again.

And if you’d like to know how to play other commodities, Jeremy and Tracey took on the gold rally recently.

Should you invest in the yellow metal? Watch Below:

Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor of the Insider Trader and Value Investor services. You can follow her on twitter at @TraceyRyniec and she also hosts the Zacks Market Edge Podcast on iTunes.


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Intuit (INTU) Posts Q4 Earnings Beat, Falls on Weak Forecast

Intuit Inc. INTU just released its fourth quarter fiscal 2016 earnings results, posting earnings of a loss of 13 cents and revenue of $754 million. 

Currently, INTU has a Zacks Rank #3 (Hold).INTU was down $4.49, or 3.94%, to $109.35 in after-hours trading shortly after its earnings report was released.                                                            

Beat earnings estimates. The company posted earnings of a loss of 13 cents per share, topping the Zacks Consensus Estimate of a loss of 23 cents per share. This number excludes three cents from non-recurring items.

Beat revenue estimates. The company saw revenue figures of $754 million, soaring past our consensus estimate of $724 million and increasing 8.3% year-over-year.

Total Small Business segment revenue increased 10% for the quarter and 9% for the year.

Small business ecosystem revenue grew 25% for the full fiscal year, thakns to online consumer acquisition. QuickBooks self-employed subscribers ended the year at 85,000, much higher than 25,000 a year ago.

“This was a strong year from start to finish,” said Brad Smith, Intuit’s chairman and chief executive officer. “One of our strategic goals is to be the operating system behind small business success, and our small business ecosystem remains vibrant. Total QuickBooks Online subscribers grew to more than 1.5 million, and small business online ecosystem revenue grew 25 percent for the year.”

Looking ahead, Intuit expects Q1 FY17 EPS between one cent to three cents, much lower than analyst estimates of 13 cents a share. Revenue is forecasted in the range of $740 million to $760 million, also missing estimates of $772 million.

Here’s a graph that looks at Intuit’s price, consensus, and EPS surprise:

INTUIT INC Price, Consensus and EPS Surprise

INTUIT INC Price, Consensus and EPS Surprise | INTUIT INC Quote

 

Intuit's mission is to revolutionize how people manage their financial activities. The company's objective is to greatly expand the world of electronic finance. Electronic finance encompasses three types of products and services: desktop software products that operate on customers' personal computers to automate financial tasks; products and services that are delivered via the Internet; and products and services that connect Internet-based services with desktop software to enable customers to integrate their financial activities.

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Industrial Machinery Stock Outlook – Aug. 2016

We believe that during the Apr–Jun ‘16 quarter macro headwinds, including unfavorable foreign currency movements and weak economic conditions in some developed and developing nations, played spoilsport for many industrial stocks. However, the impacts of such adversities are believed to have ebbed compared with the previous quarter. Toward the end of the second quarter, the United Kingdom decided to exit the European Union, adding to the existing concerns in the global economy.

Per a Jul 2016 report, the International Monetary Fund (“IMF”) has lowered its world economic outlook by 0.1% for both 2016 and 2017 to 3.1% and 3.4%, respectively. Economic growth forecasts for advanced economies have been lowered by 0.1% for 2016 and by 0.2% for 2017, while the same for the emerging economies remained unchanged.

Industrial Machinery—Nation-wise Description

One of the leading economic indicators for the industrial stocks is industrial production, which measures the level of output of manufacturing, mining and utilities sectors in a country. A brief discussion on the machinery industry in different nations is given below.

The United States: The country’s industrial production in the second quarter fell roughly 1% year over year, while easing to a decline of 0.5% in July. The initial month of the third quarter recorded growth in utilities and manufacturing output, offset by weak mining activities.       

Job market showed weakness in the second quarter, evident from an average jobs addition of 153,000 per month, down from 209,000 in the preceding quarter. In July, jobs addition was 255,000, while the unemployment rate was 4.9%. In addition, unfavorable foreign currency movements and economic uncertainties worldwide led to weak export demand for the U.S.-manufactured machinery.

According to the U.S. Census Bureau, export demands for U.S. machinery declined 5.7% year over year in the first half of 2016. A 12.4% decline was recorded in shipments of farm machinery; while construction and mining machinery saw 23.1% and 45.8% fall, respectively. The exception was a 4.2% increase in shipments of industrial machinery. New machinery orders were down 5.3%, while order backlog decreased 7.7%.

The IMF has reduced its growth projections for the U.S. economy by 20 basis points (bps) to 2.2% for 2016, while it reiterated 2.5% growth projection for 2017.

Japan: The country’s economy is struggling with internal issues including low investment levels, unfavorable exchange rates, aging population and a huge public debt. Also, consumption level has failed to revive to a satisfactory level since it suffered from a 3% rise in national sales tax in Apr 2015. In addition, the country is facing adversities of weak economic conditions externally.

According to the report from Japan’s Cabinet Office, core machinery orders fell nearly 9.2% in second-quarter 2016 as against growth of 6.7% in the previous quarter. The fall in core machinery orders has triggered concerns over the future of capital investments by companies.

Orders from manufacturing clients declined 13.4%, while the same from the government clients fell 13.3%. The agency predicts core machinery orders to grow 5.2% in third-quarter 2016, while total machinery order is expected to increase 4.3%.

The IMF lowered its growth projection for the country by 20 bps to 0.3% for 2016 while increasing it by 20 bps to 0.1% for 2017.

China: In second-quarter 2016, China’s GDP grew 1.8% sequentially, above 1.2% growth recorded in the previous quarter, while on a year-over-year basis, the same advanced 6.7%. Though the country is still struggling with capital outflows and forex issues, a slight improvement in infrastructure investment and higher oil prices have worked in the country’s favor.

In July, the country’s industrial production increased 6% year over year, slightly below 6.2% in June and flat compared with May. The increase was driven by an improvement in manufacturing and utilities sectors, offset by weakness in the mining sector. In July, the country’s exports decreased 4.4%, while imports dropped 12.5%.

The IMF projects the Chinese economy to grow by 6.6% in 2016, up 10 bps from the previous projection, while it expects 6.2% growth in 2017.

India:The country’sindustrial production in Jun 2016 increased 2.1% year over year. Expectations of a strong demand, improved policies and better monsoon conditions are factors that will influence the country’s growth, going forward. The government is making concerted efforts to turn the country into a prime manufacturing hub for all nations across the world.

Apart from boosting the foreign capital inflow in the country, these strategies will improve the domestic job markets as well as demand for industrial products. According to the IMF, the country is projected to grow 7.4% in both 2016 and 2017.

Brazil:For 2016, the country projects a gloomy outlookas a result of low private investments and inadequate infrastructure. The country’s unemployment rate increased to 11.3% in second-quarter 2016, up from 10.9% recorded in the quarter-ending Mar 2016. Also available data reveals that the country’s industrial production fell 6% year over year in June.

The IMF predicts the country’s output to decline by 3.3% in 2016, but improve to 0.5% in 2017. The recovery is dependent on foreign direct investments and expansion of industries like tourism, steel and electricity.

Eurozone: Industrial production in the Eurozone rose by 0.6% month over month in Jun 2016, while inched up 40 bps year over year. The unemployment rate was high at 10.1% in Jun 2016, but stable compared with the previous month.

The IMF predicts output growth in Euro Area to be 1.6% in 2016 and 1.4% in 2017.

Zacks Industry Rank

According to the Zacks Industry classification, Machinery is broadly grouped under Industrial Products, one of the 16 broad Zacks sectors. The Zacks sectors comprise 265 industries that are ranked on the basis of the earnings outlook of constituent companies in each industry. To learn more visit: About Zacks Industry Rank

As a rule, the top 50% of all Zacks industries outperform the bottom half by a wide margin. Going by this, industries with Zacks Industry Rank of 132 and lower would fall in the top half, while those with Zacks Industry Rank of 133 and higher would be in the bottom half.

The machinery industry is sub-divided into nine industries at the expanded level: machine tools and related products, construction and mining, electrical utilities, electrical, farm, general industries, material handling, print trading and thermal processing.

Earnings Trend of the Sector

As of Aug 19, all of industrial products stocks (accounting for 2% of the S&P 500 index’s total market capitalization) in the S&P 500 Group reported results for the Apr-Jun 2016 quarter, recording a decline of 1.5% in earnings and 5.6% in revenue.

Moreover, results of all S&P 500 companies released till Aug 19 showed a 3.2% fall in earnings with a meager 0.1% rise in revenues. With conditions unlikely to improve, earnings for the S&P 500 companies are projected to fall 3.1% and revenues to decrease by 0.4%.

Conclusion

We believe the prevalent uncertainties in the global economy will be a drag on the industrial sector. However, the much-needed relief might come from governmental policies inducing better trade relations, increased infrastructural investments, job creation and high consumer-end demand.  

Until such broader improvements materialize, stocks with high investment rankings might interest investors seeking exposure in the machinery industry. In the S&P 500 group, machinery company Illinois Tool Works Inc. (ITW), with a market capitalization of $42.5 billion, has strong earnings growth potential of roughly 8.8% over the next five years. Another industrial company, Avery Dennison Corporation (AVY) -- with $6.9 billion market capitalization -- offers roughly 10% earnings growth potential. Both these stocks currently carry a Zacks Rank #2 (Buy).

Among the non-S&P 500 billion-dollar stocks in the machinery industry, Zebra Technologies Corp. (ZBRA) sports a Zacks Rank #1 (Strong Buy) and offers 9% earnings growth potential over the next five years while Tennant Company (TNC), with a Zacks Rank #1, is expected to post earnings growth of 11%. EnerSys (ENS), with a Zacks Rank #2, is anticipated to have earnings growth of 13% over the next five years.


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Is it Wise to Hold Vornado (VNO) in Your Portfolio Right Now?

We have updated our research report on Vornado Realty Trust VNO on Aug 22, 2016.

Earlier in August, Vornado reported second-quarter 2016 funds from operations (“FFO”) per share of $1.21, missing the Zacks Consensus Estimate of $1.25. The figure also came in lower than the prior-year tally of $1.71 per share.

Results reflect weaker-than-expected revenue numbers and a fall in occupancy in both the New York and Washington DC portfolio. Total revenue came in at $621.7 million for the second quarter, up 0.9% year over year. However, it lagged the Zacks Consensus Estimate of $626.5 million.

What’s Good About Vornado, and What Not?

Vornado – with high-quality office assets located in high-rent, high barrier-to-entry markets, a diverse tenant base and decent balance sheet – is poised for long-term growth. The company, which has been subject to criticism for venturing into too many sectors, has made consistent efforts in recent times to streamline its business. It has opted for divestitures, including spin-offs like that of Urban Edge Properties UE, and resorted to opportunistic investments to improve its long-term growth scope.

In fact, during the quarter, the company contributed $19.65 million for a 50% equity stake in a joint venture, which would develop a 33,000 square foot office and retail building on Houston Street in Manhattan.

Further, it sold a 47% ownership stake in 7 West 34th Street – a 477,000 square foot Manhattan office building leased to Amazon.com, Inc. AMZN – and retained the residual 53% stake. Based on a property value of around $561.0 million, this sale helped the company reap net proceeds of nearly $127.4 million.

However, even if the divestitures pay off in the long run, the dilutive impact on earnings from such asset dispositions cannot be avoided either in the near term. Further, at quarter end, same-store occupancy in the New York portfolio was 96.0%, reflecting a contraction of 20 basis points sequentially and 50 bps year over year. On the other hand, same-store occupancy in the Washington DC portfolio was 84.0%, down 80 bps, both sequentially and year over year. Moreover, stiff competition and any rise in interest rate in the upcoming period can add to its woes.

Nevertheless, the Zacks Consensus Estimate for 2016 and 2015 has remained stable at $4.89 and $5.55, respectively, over the past seven days. Currently, Vornado carries a Zacks Rank #3 (Hold).

VORNADO RLTY TR Price and Consensus

 

VORNADO RLTY TR Price and Consensus | VORNADO RLTY TR Quote

Other Stocks to Consider

Investors interested in the retail REIT industry may consider a better ranked stock – CoreSite Realty Corporation COR – holding a Zacks Rank #2 (Buy).

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United Bankshares to Acquire Cardinal Financial for $912M

Last week, United Bankshares, Inc. UBSI announced a merger deal with Cardinal Financial Corporation CFNL. The deal, signifying the 31st acquisition for United Bankshares, is valued at approximately $912 million.

This agreement solidifies United Bankshares’ consistent history of successful M&A transactions and positions it as the largest community bank in the Metro D.C. region. The deal term is subject to changes by United Bankshares, any time prior to the closing of the deal, based on conditions mentioned in the agreement.

Stock Deal to Close by Mid-2017

United Bankshares will exchange 0.71 shares of its share for each outstanding share of Cardinal Financial (100% stock consideration). The deal consideration is based on Cardinal Financial’s shares outstanding of 32.5 million and options outstanding of 1.02 million. Notably, the agreement price represents 2.24 times Cardinal Financial’s tangible book value as of Jun 30, 2016.

The completion of the collaboration is subject to customary regulatory approval as well as the approval of United Bankshares and Cardinal Financial shareholder. The transaction, unanimously approved by Board of Directors of both the companies, is expected to close by mid 2017.

Richard M. Adams – Chairman and CEO of United Bankshares stated, “This merger aligns perfectly with our long-standing commitment to growth in the D.C. Metro area.”

Bernard H. Clineburg – Executive Chairman of Cardinal Financial stated, “We are pleased Cardinal found a like-minded partner to further our growth in Northern Virginia, the District of Columbia and Maryland. United brings to the table the capacity to meet the sophisticated needs of our customers, while at the same time staying true to our commitment to the communities we serve. In addition, the transaction will add tremendous value for our shareholders."

Earnings Accretion of About 3%

United Bankshares is projected to have total assets of approximately $20 billion, with market capitalization of $3.9 billion, based on its closing price on Aug 16, 2016. Further, the company projects earnings accretion of about 3% in full first year, following the closure. Also, cost savings are expected to be 25% (based on Cardinal Financial’s non-interest expense). Notably, the accretion to tangible book value is assumed to be immediate, with no enhancement in revenue.

Further, Cardinal Financial’s Executive Chairman, Mr. Clineburg is predicted to join United Bankshares’s Board of Directors.

United Bankshares is well-capitalized, based upon regulatory norms. Its earnings and asset quality continue to remain strong despite the recent merger-related expenses. In Jun, 2016, United completed its 30th acquisition of Bank of Georgetown – a privately-held community bank headquartered in Washington, D.C.    

Currently, United Bankshares, Inc. holds a Zacks rank #5 (Strong Sell), while Cardinal Financial Corporation holds a Zacks rank #3 (Hold). Some better-ranked banking stocks include Hancock Holding Company HBHC and Republic Bancorp Inc. RBCAA, both sporting a Zacks rank #1 (Strong Buy).

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Simon (SPG) Opens AC Hotel in Buckhead, Atlanta

Simon Property Group Inc. SPG, in association with Noble Investment Group, declared the debut of renowned AC Hotels by Marriott brand at Phipps Plaza in the Buckhead district of Atlanta. This move comes as part of the company’s focus on enhancing the value of its premium properties as well as including coveted brands to drive traffic at its shopping mall.

AC Hotels is situated at the intersection of Peachtree Road and Wieuca Road, adjacent to Nordstrom at Phipps Plaza. This addition seems a strategic fit because AC Hotels – founded in 1998 – is one of the most coveted hotel brands throughout Europe. Further, this AC Hotel by Marriott Buckhead is the brand's first hotel in Atlanta and only its eighth in the United States.

Simon’s Phipps Plaza has undergone a revamp, where its Peachtree Road entrance has been renovated, with a frontage of storefronts representing some of the most sought-after brands. This upscale shopping destination boasts of a diverse and exclusive mix of fashion and luxury retail stores, plus dining and entertainment options. The mall is anchored by Nordstrom, Inc. JWN, Saks Fifth Avenue and Belk.

Together with this, the Phipps Plaza's enhancement project – the "Domain at Phipps Plaza" –promises to give a robust facelift. It would result in addition of 319 mid-rise, urban-style luxury residences, slated to open in phases commencing this fall.

Notably, Simon Property has been active in restructuring its portfolio and is aiming premium acquisitions and redevelopments. Recently, the company celebrated the opening of the 155,000-square-foot expansion at the iconic King of Prussia Mall situated around 25 miles northwest of Philadelphia. (Read more: Simon Property Opens King of Prussia Mall Expansion)

In fact, at the end of the second quarter, the company had redevelopment and expansion projects in progress at 33 properties across the U.S. and Europe, with share of costs worth around $2.1 billion. It is expected to effectively leverage the improving spending habits of wealthier customers with such a pipeline of projects, when the economy is showing signs of recovery.

Simon Property currently has a Zacks Rank #3 (Hold).

Investors interested in the retail REIT industry may consider stocks like Acadia Realty Trust AKR and Pennsylvania Real Estate Investment Trust PEI. Both the stocks holds a Zacks Rank #2 (Buy).

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Monmouth Real Estate (MNR) Buys Industrial Asset in Florida

Monmouth Real Estate Investment Corporation MNR disclosed the acquisition of an industrial building in the Orlando, FL MSA for $37.78 million. This new class-A facility is net-leased for 15 years to FedEx Ground Packaging System, Inc.

Spanning 310,922 square foot of space, this built-to-suit distribution center is situated on around 47 acres at 5000 North Ridge Trail, Davenport. Its acquisition by Monmouth Real Estate seems a strategic fit for its preferable location right off of Interstate 4. It is adjacent to the Walmart’s recently built two large e-commerce fulfilment centers, spanning a total 2.35 million square feet of space.

Amid an e-commerce boom and heightened urbanization, retailers are shifting their strategy toward services like same-day delivery and other such options, propelling demand for distribution facilities. With a larger customer base, companies are opting for supply-chain consolidation, resulting in greater demand for logistics infrastructure and efficient distribution networks, thereby creating scope for industrial REITs.

In fact, per a CBRE Group Inc. CBG study, the industrial market is on its lengthiest stretch of recovery, with availability rates declining for the 25th straight quarter to 8.8% in Q2, the lowest since mid-2001.

This is expected to provide enough scope to Monmouth Real Estate to capitalize that specializes in single-tenant, net-leased industrial properties. Its portfolio consists of 98 properties situated in 30 states, encompassing a total of about 15.7 million rentable square feet.

Monmouth Real Estate currently has a Zacks Rank #3 (Hold). Investors interested in the REIT industry may consider stocks like CoreSite Realty Corporation COR and Gramercy Property Trust Inc. GPT. Both the stocks holds a Zacks Rank #2 (Buy).

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3 Small-Cap Stocks With Sky-High Growth Potential

Finding companies with the criteria you want isn’t always easy.  You could spend hours searching ticker after ticker, only to find companies which aren’t worthy of your hard earned cash.  An easier way to navigate through this is by using high quality stock screeners.  Screening helps investors narrow down companies to invest in based on their ability to meet every criteria selected.  Any company who misses even one of the criteria requirements will be filtered out.

This lets one easily choose ideal metrics.  Screens are effective because they sift out bad stocks and only keep the cream of the crop in.  It isn’t always easy to create an effective screen.  Our Zacks Premium Screens  have helped with this, bringing profits to many investors over time.  Our predefined criteria are chosen carefully to capture special kinds of companies.

Today, we’ve dug up 3 stocks using one of our premium screens known as “Zacks #1 Rank Growth Stocks”.  Some of the metrics of this screen requires a stock to have trading volume above 100,000 shares per day, expected EPS growth of 20% this year, and a Zacks Rank #1 (Strong Buy).  One additional criterion we added to the screen allowed us to search for companies with market caps under $1 billion.  Small-cap stocks have the potential to see higher levels of growth, so these companies could do your portfolio a lot of good.

Oclaro Inc-OCLR

Oclaro Inc. provides high performance optical components, modules, and subsystems to the telecommunications market.  The company leverages proprietary core technologies and vertically integrated product development to sell customers cost-effective products.  Oclaro has a market cap of $827.65 million, and it gets a grade of “A” for growth in our Style Scores.

OCLR trades at a reasonable forward PE of 19.73, and it also has a pretty low PEG of 1.2.  With valuations like these, the stock does not look too expensive.  The company is expected to see significant growth this year, with sales and EPS projected to grow by 30.45% and 367.5% respectively. 

Analysts covering OCLR have been revising their earnings estimates upwards.  In the last 30 days, our current year EPS consensus has increased by 117%, going from $0.17 to $0.37.  Oclaro could very well surpass this estimate since it has beaten estimates in each of the last four quarters.  Over that time span, the company has topped our consensus by an average of 101% per quarter.   

 

ANI Pharmaceuticals Inc-ANIP

 ANI Pharmaceuticals is a special pharmaceutical company that develops and sells branded and generic prescription drug products.  Through various forms of drug delivery, the corporation sells cough and cold products, antacids, laxatives, stomach remedies, and more.  ANIP, like every other stock in this article, is a Zacks Rank #1 (Strong Buy).

ANI Pharmaceuticals has a forward PE of 18.22.  The firm has seen high sales growth over the last few years, and since 2013, sales have grown by over 150%.  Top line growth is expected to be realized this year, and sales are forecasted to increase by 68%.  Earnings should see significant growth as well, with EPS expected to grow by 55%.  Unlike many small pharmaceutical companies, ANI has a nice capital structure.  ANIP has a current ratio and debt-to-capital of 3.23 and 0.41 respectively.

ANI PHARMACEUT Revenue (Quarterly)

ANI PHARMACEUT Revenue (Quarterly) | ANI PHARMACEUT Quote

 

FormFactor Inc-FORM

FormFactor Inc. develops and manufactures high performance advanced semiconductor wafer probe cards.  Their technology, such as its MicroSpring interconnect technology, enables FormFactor to produce wafer probe cards for test applications that require reliability, speed, precision, and signal integrity.  FORM has a market cap of $766 million, and shares have picked up 43% in value since June.

Over the last five years, sales have grown by 66.86%.  This year is expected to be an especially momentous one for FormFactor, as the company’s revenues and EPS are projected to grow by 35% and 52.94% respectively.  FORM has a trailing twelve month net margin of 7.27%, and this is way ahead of the industry’s average net margin of 2.16%.  FormFactor has topped our EPS estimate in three of the last four quarters.  In its most recent quarterly beat, EPS came in at $0.10, and this topped our consensus by 42.86%.  FormFactor is expected to release its next quarterly earnings results in late October.     

FORMFACTOR INC Revenue (TTM)

 

Bottom Line

One magical screening ingredient which can’t be overlooked is the Zacks Rank #1 (Strong Buy).  The rank helps to find companies which look like strong earnings candidates.  In addition to this great metric, the Zacks Premium Screens help you to add other criteria to find the most superior investment choices.  While this article outlined potential candidates from one screen, the Zacks Premium service gives you access to the “Zacks #1 Rank Growth Stocks” and 45 other premium screens designed to give you superior investment returns.

To use Zacks Premium Screens to find more stock picks based on criteria that’s most important to you— plus, gain access to the Zacks Rank for your stocks, mutual funds and ETFs; Zacks Style Scores, Equity Research Reports; Focus List portfolio of 50-longer-term stocks and more—start your 30-day free trial to Zacks Premium.


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AK Steel (AKS) Launches Nexmet Line of High Strength Steels

AK Steel Holding Corporation AKS declared that it is introducing Nexmet, an innovative family of high strength steels for use in automotive lightweighting applications. The products are geared to help automotive original equipment manufacturers (OEMs) in meeting 2025 U.S. Corporate Average Fuel Economy (CAFE) targets.

The Nexmet family of products will provide high strength, greater ductility, and enhanced formability solutions for a variety of needs for structural and exterior automotive body lightweighting uses.

Nexmet 440EX is the company's first new steel to be launched in this line of products. The product combines high yield and tensile strength at thinner gauges to enable lightweight designs. This results in increased performance where surface appearance and dent resistance are critical. AK Steel's Nexmet 440EX is currently available and is being qualified by automotive OEMs as a steel solution for exposed body panel lightweighting needs.

AK Steel will launch its next generation Advanced High Strength Steel (AHSS) products – Nexmet 1000 and 1200 – in early 2017, after completing upgrades at the company’s Dearborn Works hot dip galvanized line. These products will offer considerably improved ductility at tensile strengths of 1000 megapascal (MPa) and 1200 MPa, and will be used to help lightweight automotive body structures.
 

AK Steel is well placed to gain from strength in the automotive market and higher shipment of steel products to automakers, supported by increased automotive builds. The company is witnessing continued momentum in the automotive market, driven by high rates of light vehicles production and sales. Automotive contribution to the company’s revenues was 60% last year.  

AK Steel has a Zacks Rank #3 (Hold).

Better-ranked stocks in the steel space include ArcelorMittal MT, Schnitzer Steel Industries, Inc. SCHN and Ternium S.A. TX. While both ArcelorMittal and Schnitzer Steel sport a Zacks Rank #1 (Strong Buy), Ternium carries a Zacks Rank #2 (Buy).

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AK STEEL HLDG (AKS): Free Stock Analysis Report
 
ARCELOR MITTAL (MT): Free Stock Analysis Report
 
SCHNITZER STEEL (SCHN): Free Stock Analysis Report
 
TERNIUM SA-ADR (TX): Free Stock Analysis Report
 
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Zacks Investment Research

KFC Sunscreen Thinks Outside the Fill-Up Box

Hey everybody Dave Bartosiak with Trending Stocks at Zacks.com. You gotta love the creative marketing team over at Yum Brands (YUM).

KFC gave out 3,000 tubes of fried-chicken scented sunscreen yesterday. The gimmick is a piggy back off their latest TV ad campaign featuring extra crispy, always tan George Hamilton. Let me tell you gents, there’s nothing that gets the ladies going quite like the smell of fried chicken. Those chubby chasers will be hunting you down in no time. I’m happy because now I don’t have to keep little bits of fried batter in my chest hair anymore. If it doesn’t land you a lucky lady well, you can always go through the drive thru to get your greasy little hands on a breast and thigh combo. 

Restaurant stocks underperformed the broader market in July. If you take out McDonald’s (MCD), the group added 2.5% versus 3.5% for the rest of the market. Q2 was the weakest quarter for the industry since Q1 of 2010, with same store sales nearly flat. It’s no wonder companies like Yum Brands are out here trying to be creative with their marketing as flat sales and increased labor costs have weighed on the industry.

I’ve got some ideas for other fast food brands looking for creative marketing campaigns. How about, Taco Bell refried bean toothpaste? They already squeeze it out of a tube. May as well put it to work. Obviously it didn’t do its job the first time we fried the bean. Maybe we can use it for something else. McDonald’s special sauce moisturizing facial cream. Your skin will be glowing. Ever seen an ashy Big Mac? Me neither. Blooming onion extra strength body powder. It’s a secret recipe from the land down under, for the land down under. Then there’s my personal favorite, Chipotle (CMGBurrito bowl automatic toilet bowl cleaner. Kills 99.9% of bacteria, provides continuing cleaning and deodorizing action, keeps toilet bowls shiny and the water a sparkling barbacoa brown.

The restaurant industry is in the Bottom 19% of the 265 stocks we rank with our Zacks Industry Rank. Yum Brands is currently a Zacks Rank #3 (Hold). If you’re looking for a stock to buy in the business, check out Zacks Rank #2 (Buy) stocks Denny’s (DENN) or Papa John’s (PZZA). Papa John’s is coming off their 3rd earnings beat in a row with EPS coming in at 61 cents versus analyst estimates calling for 54 cents per share. 

Every time you share this video, somebody uses SPF 4 and gets roasted on a Florida beach. Chime in the comments section below to tell me how much you love these videos. Subscribe to the YouTube channel, Twitter @bartosiastics, and come back here to check out all the Trending Stocks with Zacks.com, I’m Dave Bartosiak.


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YUM! BRANDS INC (YUM): Free Stock Analysis Report
 
CHIPOTLE MEXICN (CMG): Free Stock Analysis Report
 
MCDONALDS CORP (MCD): Free Stock Analysis Report
 
DENNY'S CORP (DENN): Free Stock Analysis Report
 
PAPA JOHNS INTL (PZZA): Free Stock Analysis Report
 
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Zacks Investment Research

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