Zacks Equity Research highlights MidSouth Bancorp as the Bull of the Day and KEYW Holding Corporation as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Southwest Airlines Co., Google Inc. and Apple Inc.
Here is a synopsis of all five stocks:
Bull of the Day:
MidSouth Bancorp recently delivered strong first quarter results, with business improving in almost every area. This prompted analysts to revise their estimates significantly higher for both 2014 and 2015, sending the stock to a Zacks Rank #1 (Strong Buy).
While shares of MidSouth have risen sharply since the Q1 report, valuation still looks very reasonable, providing shareholders with plenty of further upside potential.
MidSouth Bancorp is the holding company for MidSouth Bank, which has 61 locations in Louisiana and Texas, including a Loan Production Office in Austin, Texas. It is headquartered in Lafayette, Louisiana and has a market cap of $213 million. The company had assets of $1.9 billion as of March 31, 2014.
MidSouth delivered better-than-expected first quarter results on April 29. Adjusted earnings per share came in at 33 cents, beating the Zacks Consensus Estimate of 27 cents. It was a 22% increase over the same quarter last year.
Net interest income rose 3% year-over-year. This was driven by strong loan growth as total loans and leases rose 10%. Commercial, financial and agricultural loans, which represent approximately 37% of the total loan portfolio, led the way with a stellar 38% increase year-over-year. The core net interest margin for the period improved 30 basis points from the same quarter last year to 4.33%.
Bear of the Day:
After reporting declining revenues and a loss of 8 cents per share in the first quarter, analysts revised their estimates significantly lower for The KEYW Holding Corporation. This sent the stock to a Zacks Rank #5 (Strong Sell) stock.
Although shares of KEYW have taken a beating the last several weeks, it still doesn’t look like a value on a price to earnings or price to cash flow basis. Investors should consider avoiding this stock until its earnings momentum improves.
KEYW provides cybersecurity, cyber superiority and geospatial intelligence solutions to US Government defense, intelligence and national security agencies and commercial enterprises to meet the needs for agile intelligence and assist the US government in national security priorities. KEYW provides solutions, services and products to support the collection, processing, analysis, and use of intelligence data and information in the domains of cyberspace and geospace.
KEYW’s CEO is former NSA official Leonard Moodispaw.
First Quarter Results
KEYW reported its first quarter results on May 1. The company reported a loss of 8 cents per share, which was less than the Zacks Consensus Estimate calling for a loss of 7 cents. The company reported a loss of 6 cents per share in the same quarter last year.
Revenue plunged 18% year-over-year to $63.8 million due in part to “lingering effects of sequestration and weather disruptions in the greater DC area”. The company estimates the revenue impact from severe weather to be approximately $4 million in the quarter.
Southwest’s Boarding Pass Goes Mobile
Southwest Airlines Co.’s passengers can now enjoy the benefits of a mobile boarding pass instead of a printed one. This seasoned carrier has now made the technology available in all airports across the United States. Earlier this month, the carrier had announced its intention to expand e-boarding passes across its domestic network by the end of 2014.
Mobile boarding passes allow passengers to use their smart devices to get through security check points and board their flight. The e-boarding pass will be sent to their mobile devices either through e-mail or in the form of text messages.
Passengers can also use the Southwest Airlines app to obtain their mobile boarding passes. Recently, the Dallas based carrier updated its application for Google Inc.’s (Nasdaq: GOOG-Free Report) Android and Apple Inc.’s (Nasdaq: AAPL-Free Report) iOS operating platforms.
Travelling passengers can also avail various necessary information including current flight status, boarding and gate position, which will be updated in the app 24 hours before the flight. Travelers can either download the e-boarding pass or show it via the app at the security check point to get it scanned and directly board the flight.
Today’s announcement implies that Southwest Airlines has finally completed the roll out of the mobile technology on its domestic routes, which it started at the beginning of 2013 in Austin. Since then the carrier has carried on pilot programs in Houston Hobby and Dallas Love Field airports.
The mobile boarding pass will reduce passenger time to get through the airport and finally board the aircraft. At the same time, it will ensure an environment-friendly process cutting down on paper consumption for traditional boarding passes.
Airline companies are attempting to incorporate new entertainment options, mobile apps, in-flight WiFi services and social media participation to transform the whole air travel experience. We believe the mobile-boarding pass will be a great booster in this regard allowing the carrier to enrich its customers’ traveling experience.
Southwest Airlines currently carries a Zacks Rank #1 (Strong Buy).
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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