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Zacks Bull and Bear of the Day Highlights: Xzeres, DryShips, DISH Network, Sprint Nextel and AT&T
By: PR Newswire
Dec. 28, 2012 09:30 AM
CHICAGO, Dec. 28, 2012 /PRNewswire/ -- Zacks Equity Research highlights Xzeres Corp (OTC:XPWR) as the Bull of the Day and DryShips (Nasdaq:DRYS) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on DISH Network Corp. (Nasdaq:DISH), Sprint Nextel Corp. (NYSE:S) and AT&T Inc. (NYSE:T).
Full analysis of all these stocks is available at http://at.zacks.com/?id=2678.
Here is a synopsis of all five stocks:
Xzeres Corp (OTC:XPWR) was upgraded from Neutral to Outperform as quarterly sequential revenue growth resumed last quarter. Third fiscal quarter results are expected in mid-January.
XZERES is positioned to benefit from the growth of the small wind energy industry. Access to capital through three separate financings over the last eight months, at first stabilized, and then, grew the company s revenue base.
XPWR reported second quarter earnings of -$0.06 per share. Second quarter earnings were better than year ago earnings of -$0.09 per share. The Zacks Estimate for the third quarter earnings is a loss of $0.05 per share, an improvement from the previous quarter.
DryShips (Nasdaq:DRYS) was recently downgraded from Neutral to Underperform. The downgrade was based on current volatile conditions of the shipping industry.
In the most recent quarter revenue improved on a year over year basis but earnings per share swung from positive to negative. It was the third quarter in a row the company reported a loss and two more quarters of losses are expected.
The dry bulk shipping and oil tanker industry are facing severe challenges as the vessel rate collapsed even below the rate during the recession. We believe the sole reason for this dismal condition is the sheer increase of vessels under operation that resulted in intense price competition.
We have a long term Underperform recommendation on the stock. Our target price of $1.50 is based on approximately 0.16x price to book metric.
Latest Posts on the Zacks Analyst Blog:
DISH Demands More Time from FCC
DISH Network Corp. (Nasdaq:DISH) – the second largest satellite TV operator in the U.S. – plans to ask the Federal Communications Commissions (FCC) for more time to file a petition against the Sprint Nextel Corp. (NYSE:S) and Japan's SoftBank Corp. deal, as the latter plans to takeover Sprint.
DISH Network's decision to oppose SoftBankCorp.'s proposal to buy Sprint's 70% stake for $20.1 billion has come up as a result of Sprint's recent plan to buyback Clearwire Corp. for $2.2 billion.
Earlier, in a report presented by the FCC and Citibank in 2010, Clearwire owed 134 MHz of spectrum belonging to 2.5 GHz band. So, the acquisition of Clearwire will not only make Sprint (the third largest carrier in U.S.), the largest Spectrum holder in the U.S. with 185 MHz of combined spectrum but will also widen the gap with two top carriers – Verizon Wireless and AT&T Inc. (NYSE:T) with 77 MHz and 83 MHz spectrum, respectively.
DISH Network – already holds 40 MHz of satellite spectrum and recently received – the FCC nod – to utilize those unused spectrum to set up a wireless network. Consequently, the company believes that Sprint's decision to acquire full stake in Clearwire may not only give access to nearly 134 MHz of spectrum but will also create a much dominant force in the wireless industry.
Moreover, if SoftBank becomes successful in acquiring Sprint, it will give access to nearly 184 MHz of spectrum (51 MHz of Sprint and 134 MHz of Clearwire), hence making a foreign company the largest holder of spectrum, which is also not in the best interest of the country. However, Clearwire's spectrums are less popular in U.S. market as it uses high frequency band while most smartphone and tablets in the coutry uses low frequency band.
Similar instance took place when the FCC ruled out AT&T's plan to buyout T-Mobile USA (a U.S. subsidiary of Germany-based Deutsche Telekom), which may result in a monopoly if the deal materialized as AT&T will then become the largest holder of spectrum in the country with nearly 125 MHz spectrum.
So, it is to be seen how the FCC deals with the situation whether to give its approval to improve spectrum shortage crisis or to protect the U.S. wireless market from foreign threats.
We maintain our long-term Neutral recommendation on DISH Network. Currently, it has a short-term Zacks #3 Rank (Hold) 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.
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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.
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