The St. Joe, BHP Billiton, Sears Holdings, Magnum Hunter Resources and Ventas
Zacks Bull and Bear of the Day Highlights: The St. Joe, BHP Billiton,... -- CHICAGO, Dec. 28, 2011 /PRNewswire/ --
Zacks Bull and Bear of the Day Highlights: The St. Joe, BHP Billiton, Sears Holdings, Magnum Hunter Resources and Ventas
CHICAGO, Dec. 28, 2011 /PRNewswire/ -- [ Zacks Equity Research ] highlights The St. Joe Company (NYSE: [ JOE ]) as the Bull of the Day and BHP Billiton Ltd. - ADS (NYSE: [ BHP ]) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Sears Holdings (Nasdaq: [ SHLD ]), Magnum Hunter Resources (NYSE: [ MHR ]) and Ventas Inc. (NYSE: [ VTR ]).
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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 ]:
We are changing our long-term recommendation for The St. Joe Company (NYSE: [ JOE ]) from Neutral to Outperform, driven by its future growth prospects. St. Joe is one of the largest real estate developers in Florida.
The company is presently focusing on developing the adjacent area of the Panama City-Bay County Airport, which was opened in late 2010, to increase the future value of its holdings. St. Joe is currently in defensive mode and continues to reduce capital expenditures through stringent cost-cutting measures and reduction in operating expenses.
The elimination of debt greatly reduces the risk to shareholders. In addition, the company has adequate liquidity to satisfy its near-term working capital needs and capital expenditures. Our long-term Outperform recommendation on the stock indicates that it would perform well above the broader market.
[ Bear of the Day ]:
We have downgraded our recommendation on BHP Billiton Ltd. - ADS (NYSE: [ BHP ]) from Neutral to Underperform based on declining industrial demand on the back of sluggish economic growth in Europe and the U.S. Other headwinds include competition from peers, an upsurge in oil prices and rising inflation in the emerging markets.
Turning toward expenses, the cost of improving ore grades, mining disruptions due to natural calamities, governmental delays as well as currency fluctuations further thwart the stock. A slower global growth rate, on the back of the European crisis and a sluggish U.S. economy, may impact the demand for the company's products and dampen revenue growth going forward.
Volatility in currency prices may have a significant impact on the company's financial results going forward. Our $63.00 target price, 7.3x fiscal 2012 EPADS, reflects our Underperform recommendation.
Latest Posts on the Zacks [ Analyst Blog ]:
Expect a Slow, Upward Drift
Stocks will likely sustain last week's upward drift, though trading action is expected to remain quiet given holiday-induced light volumes. On the docket today, we have the Case-Schiller home price index and the Conference Board's Consumer Confidence measure for December.
The lack of any European news and the expected gain in U.S. consumer confidence will likely keep overall sentiment favorable today. The economic docket is fairly light the rest of this holiday-shortened week, with weekly Jobless Claims, pending Home Sales and the Chicago PMI as the major reports coming out on Thursday. The first week of the New Year, however, is packed with market-moving reports on the manufacturing and jobs fronts, with the December non-farm payroll report coming out on Friday, January 7th.
In corporate news, Sears Holdings (Nasdaq: [ SHLD ]) reported weak quarter-to-date same-store sales and announced plans to close 100 to 120 Sears and Kmart stores. Magnum Hunter Resources (NYSE: [ MHR ]), the exploration and production company, raised its production outlook for 2012.
Ventas Upgraded to Outperform
We have recently upgraded the long-term recommendation for Ventas Inc. (NYSE: [ VTR ]), a premier healthcare real estate investment trust (REIT), from Neutral to Outperform primarily driven by its healthy third quarter 2011 results and strong growth perspectives.
Ventas is engaged in the business of financing, owning and leasing healthcare-related and senior housing facilities. The company has one of the largest and most diversified portfolios in the healthcare sector with exposure to all types of facilities.
The product diversity of the company allows it to capitalize on opportunities in different markets based on individual market dynamics, and provides a hard-to-replicate competitive advantage over its peers.
Ventas usually leases its healthcare facilities under "triple net" leases, under which the tenant pays all taxes, insurance and maintenance for the properties, in addition to rent. This insulates the company from short-term market swings that may adversely affect the operations of a particular facility, and provides a steady source of income.
Ventas reported strong third quarter results largely due to the accretive effect of the acquisitions of Nationwide Health Properties Inc. and Atria Senior Living Group, Inc., that had resulted in potential synergies and cost savings.
In addition, the company has lately obtained a new credit facility that has reduced the interest burden and increased its borrowing capacity to enable it to capitalize on favorable investment opportunities in future. This provides a significant upside potential for the company in the long run.
Get the full analysis of all these stocks by going to [ http://at.zacks.com/?id=2649 ].
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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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