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SOURCE Zacks Investment Research, Inc.
CHICAGO, Oct. 21, 2013 /PRNewswire/ -- Zacks Equity Research highlights Winnebago Industries, Inc. (NYSE:WGO-Free Report) as the Bull of the Day and Yum! Brands, Inc. (NYSE:YUM-Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis ontheApple Inc. (Nasdaq:AAPL-Free Report), Amazon (Nasdaq:AMZN-Free Report) and Google (Nasdaq:GOOG-Free Report).
Here is a synopsis of all five stocks:
What's one of the hottest big ticket items right now? Motorhomes. Winnebago Industries, Inc. (NYSE:WGO-Free Report) is cashing in on aging baby boomers and the lure of the open road. This Zacks Rank #1 (Strong Buy) can hardly keep up with demand, as its backlog jumped 130% in the fiscal fourth quarter.
Winnebago's brand recognition is so strong that when you think of RVs it's the first name that comes to mind. Founded in 1958 in Iowa, Winnebago manufactures a variety of recreation vehicles ("RVs") including motor homes, travel trailers and fifth wheel products.
Given consolidation in the industry during the Great Recession, Winnebago was able to add to its market share and now has about 20% of the RV market.
Motor home sales peaked in 2004 at 69,000 and plunged during the Great Recession. By 2011, only 25,000 motor homes were shipped. But that number is expected to slowly rise as the economy improves and the Baby Boomers age.
The key segment of RV buyers is 55 to 64 years of age. The Baby Boomers are just on the cusp of reaching that age range right now with more to come in the next few years. That's a built-in market for RVs.
Additionally, with the stock market at record highs and the housing market recovering in many major metropolitan areas, Baby Boomers finally have the cash to take to the road.
All of this adds up to good things for the RV manufacturers. The RV and manufactured home industry has a top Zacks Industry Rank of 2 out of 265 industries.
On Oct 17, Winnebago reported its fiscal fourth quarter 2013 earnings and blew by the Zacks Consensus Estimate by 35%. Earnings were $0.38 compared to the consensus of $0.28.
Yum Brands is the world's largest restaurant chain operating three famous brands: KFC, Pizza Hut and Taco Bell. It is also the largest restaurant chain in the lucrative Chinese market.
On Oct 8, Yum reported third quarter results which missed on the Zacks Consensus Estimate by $0.08. Earnings were $0.85 compared to the consensus of $0.93.
The big miss was a surprise because Yum's problems in China, which had been ongoing since a December 2012 television expose led to adverse publicity about its poultry supply, were well known. The company has been updating the China sales monthly.
However, Chinese sales, which Yum kept insisting would rebound back into the positive by the fourth quarter, did not recover quickly enough.
In the third quarter, China same store sales fell 11%. Yum provided a September same-store-sales update, which is part of Q4, and those were estimated to have declined 11% as well with KFC falling 13% while Pizza Hut gained 6%. KFC is the larger chain in China, however.
In early Oct, Yum admitted that the China Division same-store sales were now "unlikely" to be positive for the fourth quarter.
Apple to Revamp iPad
Ahead of the launch of its refreshed iPad lineup, Apple Inc. (Nasdaq:AAPL-Free Report) is seeing weaker iPad sales. The company will be unveiling the revamped version of its new iPad during an event in San Francisco on Oct 22. Though this much-awaited event has set the rumor mills rolling on the possible upgrades, we do not expect the refreshed offerings to be radically different.
The new iPad is expected to be slimmer and will likely be equipped with a fingerprint sensor. The company took a decision to revamp its iPad, since it witnessed a slump in iPad sales during the Jun 2013 quarter.
iPad sales dipped 27% year over year to reach $6.3 billion. Moreover, as per IDC, Apple's market share in the tablet segment also took a beating, which now stands at 32%, declining from 60% in the prior year quarter.
Moreover, Apple is also facing a tough challenge in China, where home grown competitors are snatching away market share from Apple. Per IDC, Apple's tablet market share in China dipped to 28.0% during the second quarter of 2013, declining from the initial level of 50%.The research firm also stated that almost 46% of tablets imported by China were made by other smaller players in the sector, often using the Android operating system.
Sales of iPads could also have been affected by consumers that preferred to wait for the newer versions instead of investing in the existing ones.
Meanwhile, competitors like Samsung, Acer and Lenovo witnessed a major jump in sales compared to the previous year.
Apple is also expected to rollout an updated version of the iPad mini at the event. This category of tablets constitutes models such as iPad Mini, Amazon (Nasdaq:AMZN-Free Report) Kindle Fire and Google (Nasdaq:GOOG-Free Report) Nexus 7, which are likely to pose stiff competition..
Apple has a Zacks Rank #2 (Buy).
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