For Immediate Release
Chicago, IL – June 02, 2017 –Zacks Equity Research highlights Universal Display Corporation (NASDAQ: OLED – Free Report ) as the Bull of the Day Hewlett Packard Enterprise (NYSE: HPE – Free Report ) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Regeneron Pharmaceuticals, Inc. (NASDAQ: REGN – Free Report ) , Sangamo Therapeutics, Inc. (NASDAQ: SGMO – Free Report ) and Puma Biotechnology, Inc. (NASDAQ: PBYI – Free Report ) .
Here is a synopsis of all five stocks:
One of the best purchases for my somewhat new place was an OLED TV. If you aren’t familiar with the technology, OLED, or Organic Light Emitting Diode, emits light when electricity is applied through it , and does not require backlighting.
This allows displays made with this technology to be thin and flexible, and it gives a huge contrast ratio including blacker blacks and whiter whites, relative to many other types of displays. The TV looks great!
But from an investment perspective, this technology is sweeping not only across TVs, but various other devices in the tech world such as phones and computer screens. And the company behind much of this technology, Universal Display Corporation (NASDAQ: OLED – Free Report ), is looking like an especially intriguing investment these days.
OLED Stock in Focus
In the company’s most recent earnings report, the company easily beat expectations, and actually posted a pretty incredible beat. The stock was expected to see earnings of one cent per share and actually posted 22 cents per share instead. The firm also said there was building ‘ momentum’ for products using OLED displays, so guidance is looking pretty promising as well.
Thanks to this strength, analysts have been raising their estimates for OLED stock, pretty much across the board. In fact, we haven’t seen any estimate cuts in the past sixty days to the current quarter, current year, or next year consensus. We have actually seen a surging consensus for the full year as analysts clearly believe in the momentum too. The company’s consensus has moved higher by about 27% in the past month, while we are seeing a seven percent increase for the following year.
There is a lot to like about the story in the OLED market these days, and that is further backed up by the impressive industry and sector rank for the stock. Shares have a top 40% rank for both the industry and the sector, while Universal Display Corporation has a Zacks Rank #1 (Strong Buy) rating itself.
Bear:
One of the big stories so far this year has been the incredible performance of the tech sector at large. Many of the big caps in this space have dominated the market, and have put up double digit percentage gains in the process too.
But, it hasn’t been that way for every name in the space. Take Hewlett Packard Enterprise (NYSE: HPE – Free Report ) for example. Sure, the company had a spin-off so the chart for this year might look incredibly bad, but the recent earnings report and price performance signal that HPE investors might want to get used to seeing red in their positions.
Recent Earnings Report
Hewlett Packard Enterprise just released earnings, and the numbers left much to be desired from the company. Revenues plunged 12.5% for the continuing operations part of the business, and was led by a double-digit percentage slump in revenues for servers, storage, and a 30% slump for networking. Earnings were also pretty weak, as they easily missed estimates on the bottom line too.
And worst of all, things don’t appear as though they are going to be turning around anytime soon. Guidance was also sluggish, and it isn’t like the competitive pressures are going to diminish in the coming quarters either.
Analysts have already taken note of these trends and we saw several cuts to HPE’s consensus estimate heading into the report. And now, with the weak outlook and tough position against peers, it isn’t unreasonable to think that this trend will continue in the weeks ahead too. No wonder HPE currently has an ‘F’ growth score, and why we have a Zacks Rank #5 (Strong Sell) on the company too.
Other Choices
Though things aren’t looking great for HPE in the near term, there are plenty of other choices out there for investors. Sure, the computer integrated systems industry has a rank in the bottom 25%, but the tech sector has a rank in the top 40%. So, investors just have to look outside of HPE’s industry for some better options in the tech space.
Additional content:
3 Hot Biotech Stocks to Buy in June
The biotech sector, which started the year on a strong note, has been witnessing a decline especially from March -- year-to-date (YTD), the Zacks-categorized Medical-Biomedical/Genetics industry is down 1.1% while the overall market is up 8.2%. A key concern for the sector remains the drug pricing issue which remains an overhang. Given the intense political and media focus on this issue, investors remain jittery about putting their money in this corner of the market.
With the industry currently ranked among the bottom 40% of the 256 Zacks-ranked industries, should one avoid stocks in this segment of the market? Not really -- while we admit that the sector is facing challenges like declining sales of legacy products, biosimilar competition, mixed earnings results, high profile pipeline setbacks and slower-than-expected new product launches, there are some factors that provide upside potential.
The industry will continue to witness demand for its products given an aging population and the increasing prevalence of a wide variety of diseases. Strong late-stage pipelines, innovative treatments, impressive results, and increased health care spending should support growth. According to a report issued by the QuintilesIMS Institute, medicine spending through 2021 is expected to grow in mid-single digits. Trump's pro-business stand is also expected to benefit the sector. A faster drug approval process and the proposed removal of outdated regulations that drive up costs and slow down innovation should also work in favor of the sector.
While drug pricing will remain a headline risk until some plan is announced by the administration, here are a few biotech stocks that have performed well YTD and look well-positioned.
First on our list is Tarrytown, NY-basedRegeneron Pharmaceuticals, Inc. (NASDAQ: REGN – Free Report ) . While eye drug, Eylea, the company’s key growth driver continues to perform well, Regeneron has been working on diversifying its portfolio and gained FDA approval for two drugs this year -- Dupixent (moderate-to-severe atopic dermatitis) and Kevzara (moderately to severely active rheumatoid arthritis). Both drugs have blockbuster potential with Dupixent already off to a strong start. The company also has a strong pipeline comprising 16 candidates including for cancer. Regeneron, a Zacks Rank #2 (Buy) stock, has outperformed the Zacks-categorized Medical-Biomedical/Genetics industry with shares gaining 25% YTD. Estimated earnings growth for the current year is 27.4%.
Next on the list is Richmond, CA-basedSangamo Therapeutics, Inc. (NASDAQ: SGMO – Free Report). Sangamo got a shot in the arm last month with Pfizer (NYSE:PFE) collaborating with the company for the development and commercialization of gene therapy programs for hemophilia A. The agreement covers SB-525, one of Sangamo’s four lead pipeline candidates, and will see Sangamo getting an upfront payment of $70 million. Sangamo could also get milestone payments of up to $475 million, including up to $300 million related to SB-525 and up to $175 million for additional hemophilia A gene therapy candidates that may be developed under the collaboration. Tiered double-digit royalties on net sales also form a part of the deal. This deal bodes well for the long-term prospects of the company. Shares of this Zacks Rank #2 stock are up a whopping 123.9% YTD.
Another Zacks Rank #2 biotech stock that has had a strong run so far this year is Puma Biotechnology, Inc. (NASDAQ: PBYI – Free Report). Puma’s shares are up 149.4% YTD with the company receiving a huge boost with an FDA advisory panel voting in favor of its experimental breast cancer treatment, neratinib. The FDA’s Oncologic Drugs Advisory Committee voted 12 - 4 in favor of approving neratinib for the extended adjuvant treatment of HER2-positive early stage breast cancer based on a favorable risk-benefit profile. Given the favorable vote, chances of gaining approval look pretty high. FDA approval would be a major boost for Puma which currently has no marketed products in its portfolio.
While all three stocks mentioned above are Zacks Rank #2 stocks, you can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Will You Make a Fortune on the Shift to Electric Cars?
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With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>
About the Bull and Bear of the Day
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Strong Stocks that Should Be in the News
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Universal Display Corporation (OLED): Free Stock Analysis Report
Hewlett Packard Enterprise Company (HPE): Free Stock Analysis Report
Regeneron Pharmaceuticals, Inc. (REGN): Free Stock Analysis Report
Sangamo BioSciences, Inc. (SGMO): Free Stock Analysis Report
Puma Biotechnology Inc (PBYI): Free Stock Analysis Report
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