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SOURCE Zacks Investment Research, Inc.
CHICAGO, Jan. 2, 2014 /PRNewswire/ -- Zacks Equity Research highlights Bally Technologies (NYSE:BYI-Free Report) as the Bull of the Day and Ryanair Holdings (Nasdaq:RYAAY-Free Report)as the Bear of the Day. In addition, Zacks Equity Research provides analysis ontheWells Fargo & Company (NYSE:WFC-Free Report), Fannie Mae (OTC:FNMA-Free Report) and Freddie Mac (OTC:FMCC-Free Report).
Here is a synopsis of all five stocks:
2013 was a year of incredible strength for the casino industry. In fact, the Market Vectors Gaming ETF, which arguably serves as a barometer of the global gaming market, has soared more than 44% on the year, easily crushing broad benchmarks in the process. And with a strong consumer market, there is plenty of reason to believe that this trend can continue in 2014 as well.
While investors can certainly play this trend with any number of casino operators, an often overlooked way to target this market is by investing in firms that make the games and technology in the casinos. This approach ensures that investors play on the broad trends in the market, while simultaneously staying away from the cutthroat competitive environment that exists between the many casinos in the world.
Bally is a Las Vegas-based company that designs, operates, and manufactures gaming systems for casinos across the globe. A big focus of the company is the slot machine segment, though it has some exposure in 'smart' table games too.
This approach has been a winning strategy for BYI in 2013, as the stock has appreciated by more than 70% in the time frame. Yet, despite this huge surge, BYI could still be a great pick thanks to a modest PE below 20, and rising earnings estimates.
With a resurgent consumer and flat oil prices, it has been a pretty good time to be in the airline industry. Stock prices in this segment of the transport space have soared, and many appear well-positioned for 2014 gains as well.
However, while many airlines have seen strength, a few have fallen by the wayside and could see their stocks grounded this year. In particular, Ryanair Holdings (Nasdaq:RYAAY-Free Report) may be in trouble and could be a name to avoid in this otherwise hot space.
While Ryanair was still up significantly for 2013, but its performance in the second half of the year has been terrible. The stock has tumbled by over 12%, while many of its U.S. counterparts saw some of their best gains in the past six month time frame.
The reason for this slump in the tail end of the year was largely due to slashed expectations for its full year profit. Now, the company expects between EUR500 million and EUR520 million for the year, down from its previous outlook of between EUR570 million- EUR600 million, as well as last year's EUR 569.3 million.
Thanks to this reduced guidance, shares of RYAAY plummeted followed the release, while analysts have also reduced their expectations for the company's earnings as well. Add in worries over price competition and concerns regarding the euro/pound exchange rate, and Ryanair's outlook appears to be pretty bleak.
Wells Fargo Inks Settlement with Fannie Mae
Wells Fargo & Company (NYSE:WFC-Free Report) announced a lawsuit settlement with Fannie Mae (OTC:FNMA-Free Report) worth about $591 million. The settlement includes the resolution of all outstanding and potential repurchase claims relating to misrepresentation of loans originated and sold by Wells Fargo directly to Fannie Mae before Jan 2009.
The Calif.-based banking major will shell out $541 million in cash to Fannie Mae, inclusive of adjustments related to credits, coupled with previous buybacks. Freddie Mac (OTC:FMCC-Free Report) and Fannie Mae, both of which received government bailouts in 2008, pushed banks to buy back mortgages that defaulted during the U.S. housing crisis.
Notably, since 2009, both these Government-Sponsored Enterprises (GSEs) compelled many lenders to repurchase bad loans worth billions of dollars. Additionally, the Federal Housing Finance Agency (FHFA), the conservator for these two firms, has set a goal to complete review of all loan files for breach of representations and warranties related to loan activity prior to 2008.
Wells Fargo also announced a similar lawsuit settlement with Freddie Mac in Oct 2013. The bank paid $780 million in cash to Freddie Mac, inclusive of adjustments related to credits, coupled with previous buybacks.
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