Business & Finance
Business and Finance
Business and Finance
Tue, December 21, 2010 Nelnet, Hudson City Bancorp, General Motors, Autoliv and Toyota Motors
CHICAGO--([ BUSINESS WIRE ])--[ Zacks Equity Research ] highlights: Nelnet Inc.(NYSE: [ NNI ]) as the Bull of the Day and Hudson City Bancorp(Nasdaq: [ HCBK ]) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on General Motors (NYSE: [ GM ]), Autoliv Inc. (NYSE: [ ALV ]) and Toyota Motors (NYSE: [ TM ]).
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 ]:
Nelnet Inc.'s(NYSE: [ NNI ]) third quarter earnings came in well ahead of the Zacks Consensus Estimate on a fall in interest expenses and benefits of revenue diversification. However, GAAP results were primarily impacted by litigation settlement charges.
Although the student loan reform law has barred the company from originating federal student loans since July, in recent years, Nelnet has expanded in areas that are independent of the federal program. Increasing revenues from its fee-based business and servicing of loans for the Education department along with restructuring initiatives should support its earnings.
With an expectation for a low interest rate environment, its floor income would also benefit. Though concerns remain over the implementation of the recent financial reform act and a challenging economic environment, Nelnet's solid capital position is encouraging. Hence, our Outperform recommendation remains in place.
[ Bear of the Day ]:
Hudson City Bancorp's(Nasdaq: [ HCBK ]) third-quarter earnings came a penny behind the Zacks Consensus Estimate, reflecting lower interest margin, increased non-interest expense and higher provision for loan losses.
Though its solid business model and strong capital levels are encouraging, we expect the pressure on earning assets and margin to continue with the low interest rate environment, which is anticipated to persist in the upcoming quarters, thereby dampening investorsa™ appetites for this stock. Along with this, the elevated levels of credit costs remain a concern for the company.
Continuing high levels of unemployment and deterioration of home prices still prevalent in some of its lending markets arouse our concern. Moreover, the recent regulatory moves are also expected to pull down the company's bottom line. As such, we reiterate our Underperform recommendation on the stock.
Latest Posts on the Zacks [ Analyst Blog ]:
GM to Recall Crossovers
General Motors (NYSE: [ GM ]) announced that it will recall 111,136 units of some of its mid-size crossover lineups next month due to a defective anchor to the seatbelt buckle that could lead to injuries in a crash.
The recalled lineups include Chevy Equinox (67,805 units), GMC Terrain (29,926 units) and Cadillac SRX (13,405 units) from the 2011 model year. As many as 97,843 units of these vehicles were sold in the U.S. and the rest in Canada and Mexico.
GM revealed that the defective buckles were supplied by Autoliv Inc. (NYSE: [ ALV ]), the Swedish manufacturer of automotive safety systems. However, Autoliv has outsourced the manufacturing of these buckles to Hyojin, based in Korea.
GM has neither received any reports of injuries nor crashes caused by the defective buckles in the vehicles, and the problem was detected only during testing in September. It will repair the vehicles free of cost next month.
Since the beginning of the year, GM has recalled about 3 million vehicles in the U.S., Canada, Mexico and South Korea. Among these, the largest recall was made in June, involving 1.5 million vehicles, in order to fix a problem with a heated windshield wiper fluid system that has been causing fire in the vehicles.
Automotive safety recalls have become the talk of the town after Toyota Motors' (NYSE: [ TM ]) announcement of the largest-ever cumulative global recall of 11 million vehicles since September last year. The Japanese automakera™s recall was related to problems such as faulty accelerator gas pedals and slipping floor mats as well as defective braking systems.
The string of recalls has led Toyota to face numerous personal injury and wrongful death lawsuits in federal courts. The U.S. government has also imposed the highest-ever fine of $16.4 million on Toyota, accusing it of a deliberate delay in recalling the vehicles by hiding its flaws even though manufacturers are legally obligated to notify the U.S. safety regulators within five business days once they come to know of a safety defect.
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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