|By PR Newswire||
|January 20, 2014 09:30 AM EST||
CHICAGO, Jan. 20, 2014 /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 the Fastenal Company (Nasdaq:FAST-Free Report), CEC Entertainment, Inc. (NYSE:CEC-Free Report), Fiesta Restaurant Group, Inc. (Nasdaq:FRGI-Free Report), Jack in the Box Inc. (Nasdaq:JACK-Free Report) and Buffalo Wild Wings Inc. (Nasdaq:BWLD-Free Report).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Friday's Analyst Blog:
Fastenal Down to Strong Sell
Why the Downgrade?
Fastenal's adjusted earnings of 33 cents per share in the fourth quarter of 2013 missed the Zacks Consensus Estimate by a penny. Earnings were flat year over year, in contrast to the company's guidance of year-over-year growth, as sales and margin deteriorated beyond expectations.
Fastenal reported net sales of $813.8 million in the fourth quarter of 2013, up 7.5% year over year. Net sales also missed the Zacks Consensus Estimate of $816 million by a marginal 0.3%.
The national distributor of industrial/construction supplies has been struggling with its top line due to lower sales of its fasteners product line which is being hurt by end-market slowdown and broader economic uncertainty.
Management has been slowing down store growth in favor of increasing headcount to drive near-term sales growth. However, such initiatives increase employee costs and hurt margins.
In fourth-quarter 2013, gross margin declined 100 basis points (bps) from the prior-year quarter to 50.6%.Gross margin also declined 110 bps sequentially. Fourth quarter gross margin missed the company's long-term gross margin range of 51% to 53%. Gross margin fell short of company's expectation of margin expansion due to weakness in fastener products, a competitive marketplace, reduced supplier incentives and lower utilization of trucking networks.
Fastenal's earnings of $1.51 per share in fiscal 2013 increased 6.3% year over year but missed the Zacks Consensus Estimate of $1.54 by 1.9%. The company reported net sales of $3.326 billion in fiscal 2013, up 6.1% year over year. Net sales missed the Zacks Consensus Estimate of $3.327 billion.
CEC Entertainment Agrees to Buyout
Family dining chain CEC Entertainment, Inc. (NYSE:CEC-Free Report) recently entered into an agreement as per which an affiliate of Apollo Global Management (APO), a leading global alternative investment manager, will take over the company for $1.3 billion, including debt. The cash tender offer of $54.00 per share represents a 25.0% premium over the company's closing share price as of Jan 7, 2014.
Per media reports, CEC Entertainment that runs the Chuck E. Cheese chain was looking for a buyer. This company offering food and games has been struggling of late due to the challenging environment. In fact, third quarter revenue (reported in November) declined 0.4% year over year due to a 3.6% drop in food and beverage sales. Comps declined 2.1% hurt by an 11% decrease in birthday party sales.
Due to the weak results, the board of directors of CEC Entertainment was looking for a suitable offer and approved the deal after reviewing a number of strategic alternatives. It also adopted a shareholder rights plan as per which it declared a dividend of one preferred stock purchase right on each outstanding share of common stock as of Jan 26, 2014.
The merger will enable CEC Entertainment to expand domestically as well as internationally and provide a substantial premium to its shareholders.
CEC Entertainment presently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the sector include Fiesta Restaurant Group, Inc. (Nasdaq:FRGI-Free Report), Jack in the Box Inc. (Nasdaq:JACK-Free Report) and Buffalo Wild Wings Inc. (Nasdaq:BWLD-Free Report). While Fiesta Restaurant and Jack in the Box carry a Zacks Rank #1 (Strong Buy), Buffalo Wild Wings holds a Zacks Rank #2 (Buy).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
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