Welcome!

News Feed Item

The Zacks Analyst Blog Highlights: Safeway, Boeing, Textron, Lockheed Martin and Huntington Ingalls Industries

CHICAGO, June 14, 2013 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Safeway Inc. (NYSE:SWY-Free Report), The Boeing Company (NYSE:BA-Free Report), Textron Inc. (NYSE:TXT-Free Report), Lockheed Martin Corp. (NYSE:LMT-Free Report) and Huntington Ingalls Industries Inc. (NYSE:HII-Free Report).

(Logo: http://photos.prnewswire.com/prnh/20101027/ZIRLOGO)

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

Here are highlights from Thursday's Analyst Blog:

Safeway to Sell Canadian Ops for $5.68B

Finally, Safeway Inc. (NYSE:SWY-Free Report) has reached a conclusive decision with respect to its Canadian operations. Share price of this food and drug retailer climbed 29.68% (or $6.86) higher during the after-trading hours following the company's announcement of an agreement to sell its Canadian operations. The stock was also up 24.45% (or $5.64) before the opening bell on Thursday.

Safeway inked a definitive agreement to divest its business operations in Canada – Canada Safeway Limited to Canadian food retailer Sobeys Inc. for $5.68 billion in cash (roughly $3.91 billion after taxes and expenses), plus the assumption of certain liabilities. Empire Company Limited owns the Sobeys supermarket chain.

Safeway is still liable for roughly $294 million of Canada Safeway's public debt due Mar 2014. It will also retain cash and other receivables of a similar amount.

Safeway's net asset sale to Sobeys include its 213 full grocery stores in Western Canada, 199 in-store pharmacies, 62 co-located fuel stations, 10 liquor stores, 4 primary distribution centers and the related wholesale business and 12 manufacturing facilities in Canada.

The transaction is expected to close in the fourth quarter of 2013, subject to standard closing conditions. The company will report Canada Safeway as discontinued operations from the second quarter of 2013.

Safeway plans to use the net proceeds to repay $2 billion of its debt. Until the most recent quarter, the company continued to operate with a high debt level of $5.3 billion. As reported earlier, the first-quarter debt level was higher than the debt of $5.2 billion in the sequentially prior quarter. Safeway's highly leveraged balance sheet was a cause of concern for investors.

According to the company, the bulk of the remainder will be used for share repurchases. As reported earlier, Safeway did not repurchase any shares in the last three quarters. Presently, the company is left with $0.8 billion of authorization to buy back shares. Shareholders should look forward to attractive returns in the form of share buybacks in the near future.

Going forward, Safeway's share buyback activity along with lower interest expense, owing to reduced debt level, should further leverage earnings in the upcoming quarters.

Our View

Although the company asserts that the divestment reflects a deft plan to sharpen focus on the U.S. market, we remain apprehensive due to the lack of clarity on management plans to gain momentum in the domestic market.

Notably, Safeway's Canadian operations have been more profitable than the U.S. operations, as seen in the level of operating profit over the past few years. In 2012, the company recorded operating profit of approximately 2% and 5.4% in the U.S. and Canada, respectively.

Boeing, TXT Get V-22 Osprey Order

The Boeing Company (NYSE:BA-Free Report) and Bell Helicopter, a unit of Textron Inc. (NYSE:TXT-Free Report), have received a five-year modification contract worth $4.9 billion for the manufacture of 99 V-22 Osprey tiltrotor aircraft.

Specifically, Bell-Boeing Joint Project Office will produce 92 MV-22 Osprey aircraft for the U.S. Marine Corps, and seven carrier-variant CV-22s for the U.S. Navy. The contract work is expected to be completed by Sep 2019.

Taking into account the $1.4 billion preliminary contract that the joint venture received in Dec 2012, the value of the contract comes to $6.3 billion. In Dec 2012, the joint venture had received a contract to produce 21 V-22 Osprey.

Boeing, in collaboration with Bell Helicopter, has built the V-22 aircraft. The V-22 Osprey is a joint service multi-role combat aircraft that can fly as fast as a plane and land like a helicopter. The aircraft has the capacity to carry 24 combat troops, or up to 20,000 pounds of internal cargo or 15,000 pounds of external cargo.

Diversified network of both the companies negates any specific business risk. Going forward, Textron's diversified presence across commercial, manufacturing and industrial products, as well as financing operations and strong demand for Boeing's defense products would keep them well-positioned.  

However, the adverse effects of sequestration cannot be ignored. In fact, in April, the budget cuts from sequestration have reduced the number of contracts awarded by the Department of Defense to major defense contractors. Defense contractors, including Boeing, have not been spared from the negative impacts of sequestration.

Even Lockheed Martin Corp. (NYSE:LMT-Free Report) and Huntington Ingalls Industries Inc. (NYSE:HII-Free Report) are part of this $37 billion sequestration cut made due to the automatic spending reduction that took effect from Mar 1, 2013. In Feb 2013, the government had announced $1.2 trillion in automatic cuts by 2021. In accordance to sequestration, funding for V-22s has experienced an $18 million reduction.

Boeing presently retains a Zacks Rank #3 (Hold) while Textron carries a Zacks Rank #4 (Sell).

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today.

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros.  In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros.

Get the full Report on SWY - FREE

Get the full Report on BA - FREE

Get the full Report on TXT - FREE

Get the full Report on LMT - FREE

Get the full Report on HII - FREE

Follow us on Twitter: http://twitter.com/zacksresearch

Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.

Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
[email protected]
http://www.zacks.com

Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

SOURCE Zacks Investment Research, Inc.

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
"We're here to tell the world about our cloud-scale infrastructure that we have at Juniper combined with the world-class security that we put into the cloud," explained Lisa Guess, VP of Systems Engineering at Juniper Networks, in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
Historically, some banking activities such as trading have been relying heavily on analytics and cutting edge algorithmic tools. The coming of age of powerful data analytics solutions combined with the development of intelligent algorithms have created new opportunities for financial institutions. In his session at 20th Cloud Expo, Sebastien Meunier, Head of Digital for North America at Chappuis Halder & Co., discussed how these tools can be leveraged to develop a lasting competitive advantage ...
In his session at 20th Cloud Expo, Mike Johnston, an infrastructure engineer at Supergiant.io, discussed how to use Kubernetes to set up a SaaS infrastructure for your business. Mike Johnston is an infrastructure engineer at Supergiant.io with over 12 years of experience designing, deploying, and maintaining server and workstation infrastructure at all scales. He has experience with brick and mortar data centers as well as cloud providers like Digital Ocean, Amazon Web Services, and Rackspace. H...
The question before companies today is not whether to become intelligent, it’s a question of how and how fast. The key is to adopt and deploy an intelligent application strategy while simultaneously preparing to scale that intelligence. In her session at 21st Cloud Expo, Sangeeta Chakraborty, Chief Customer Officer at Ayasdi, will provide a tactical framework to become a truly intelligent enterprise, including how to identify the right applications for AI, how to build a Center of Excellence to ...
You know you need the cloud, but you’re hesitant to simply dump everything at Amazon since you know that not all workloads are suitable for cloud. You know that you want the kind of ease of use and scalability that you get with public cloud, but your applications are architected in a way that makes the public cloud a non-starter. You’re looking at private cloud solutions based on hyperconverged infrastructure, but you’re concerned with the limits inherent in those technologies.
As businesses adopt functionalities in cloud computing, it’s imperative that IT operations consistently ensure cloud systems work correctly – all of the time, and to their best capabilities. In his session at @BigDataExpo, Bernd Harzog, CEO and founder of OpsDataStore, presented an industry answer to the common question, “Are you running IT operations as efficiently and as cost effectively as you need to?” He then expounded on the industry issues he frequently came up against as an analyst, and ...
SYS-CON Events announced today that Massive Networks will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Massive Networks mission is simple. To help your business operate seamlessly with fast, reliable, and secure internet and network solutions. Improve your customer's experience with outstanding connections to your cloud.
DevOps is under attack because developers don’t want to mess with infrastructure. They will happily own their code into production, but want to use platforms instead of raw automation. That’s changing the landscape that we understand as DevOps with both architecture concepts (CloudNative) and process redefinition (SRE). Rob Hirschfeld’s recent work in Kubernetes operations has led to the conclusion that containers and related platforms have changed the way we should be thinking about DevOps and...
All organizations that did not originate this moment have a pre-existing culture as well as legacy technology and processes that can be more or less amenable to DevOps implementation. That organizational culture is influenced by the personalities and management styles of Executive Management, the wider culture in which the organization is situated, and the personalities of key team members at all levels of the organization. This culture and entrenched interests usually throw a wrench in the work...
Given the popularity of the containers, further investment in the telco/cable industry is needed to transition existing VM-based solutions to containerized cloud native deployments. The networking architecture of the solution isolates the network traffic into different network planes (e.g., management, control, and media). This naturally makes support for multiple interfaces in container orchestration engines an indispensable requirement.
SYS-CON Events announced today that Datera, that offers a radically new data management architecture, has been named "Exhibitor" of SYS-CON's 21st International Cloud Expo ®, which will take place on Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Datera is transforming the traditional datacenter model through modern cloud simplicity. The technology industry is at another major inflection point. The rise of mobile, the Internet of Things, data storage and Big...
Everything run by electricity will eventually be connected to the Internet. Get ahead of the Internet of Things revolution and join Akvelon expert and IoT industry leader, Sergey Grebnov, in his session at @ThingsExpo, for an educational dive into the world of managing your home, workplace and all the devices they contain with the power of machine-based AI and intelligent Bot services for a completely streamlined experience.
Because IoT devices are deployed in mission-critical environments more than ever before, it’s increasingly imperative they be truly smart. IoT sensors simply stockpiling data isn’t useful. IoT must be artificially and naturally intelligent in order to provide more value In his session at @ThingsExpo, John Crupi, Vice President and Engineering System Architect at Greenwave Systems, will discuss how IoT artificial intelligence (AI) can be carried out via edge analytics and machine learning techn...
FinTechs use the cloud to operate at the speed and scale of digital financial activity, but are often hindered by the complexity of managing security and compliance in the cloud. In his session at 20th Cloud Expo, Sesh Murthy, co-founder and CTO of Cloud Raxak, showed how proactive and automated cloud security enables FinTechs to leverage the cloud to achieve their business goals. Through business-driven cloud security, FinTechs can speed time-to-market, diminish risk and costs, maintain continu...
Existing Big Data solutions are mainly focused on the discovery and analysis of data. The solutions are scalable and highly available but tedious when swapping in and swapping out occurs in disarray and thrashing takes place. The resolution for thrashing through machine learning algorithms and support nomenclature is through simple techniques. Organizations that have been collecting large customer data are increasingly seeing the need to use the data for swapping in and out and thrashing occurs ...