operates more than 35,500 Redbox DVD rental kiosks and 20,250 Coinstar
coin-counting brands all across the country.
Part of their strategy and success is their strategic placement of
kiosks (DVD and coins) as well as their partnerships with other major
like StarBucks, Lowes, CVS, Maggianos and more.
These partnerships not only allow Coinstar users to get the entire
of their change towards a gift card, but the subsidies and mutual
with other vendors add to Coinstar’s revenue and visibility.
On April 16th, I thought Coinstar was worthy of a Zacks Momentum
after the company pre-announced estimates much ahead than expectations
reinforced their strong growth and market share capture from the likes
Netflix. Given the actual results yesterday and the subsequent drop in
the shares may still look attractive here.
Shares were trading roughly $65 at the time that article
published. I noted in detail that “Coinstar is making all time highs as
stock trades up towards $70. While momentum is on its side,
it might be
prudent to let the stock settle down a bit and find support.”
Support came right at the 50 day moving average of about $62,
which acted as
a trampoline; sending shares back up towards the $70 mark. At
the time of this writing, shares were down
in the post market to $65 a share, back around the same level.
Details of the
Ahead of yesterday’s report, the Zacks consensus estimate was for $1.42
share, up from 87 cents just a few weeks ago. Coinstar
managed to blowout
earlier estimates with Q1 (core diluted) earnings of $1.39, but missed
Zacks Consensus, which sent the stock lower.
There was no doubt the Coinstar is executing well.
Consolidated revenue from
their coin business and Redbox was $568.2 million, up from $424 million
same quarter a year ago. Diluted EPS
from continuing operations of $1.65, an increase of 258.7% compared
million, or $0.46 per share, in the first quarter of 2011. Q1 Core
from continuing operations was $1.39 per share versus $0.46 per share
same period last year.
On the call, executives reminded
investors that the Redbox digital solution, which is a joint venture
Verizon will be pressing forward in 2012 as well as “the rollout of one
of our new venture businesses.” I wonder
what will come next for CSTR?
Q2 2012, Coinstar expects consolidated
revenue to come in between $525 million and $550 million; core adjusted
from continuing operations* between $114 million and $124 million and
diluted EPS between $1.09 and $1.24, Zacks Consensus Estimates were for
in Q2 core diluted EPS.
The stock is remains a Zacks Rank 1 Buy.
Week's Momentum Zacks Rank Buy Stocks:
Tata Motors (TTM)
Watching the Q2 earnings season
unfold, there is strength coming from transportation. Here in
car and truck manufacturers, retailers and even shipping companies are
delivering strong results on average.
Motors is a slightly different
company when compared to the typical US automaker. With roots
the way back to 1868, they are well known in India for producing
economy cars for the masses, their “Nano” model is considered “The
the globe they offer more
economy and upscale brands of automobiles and provide transport and
solutions for governments.
more of a conglomerate than
just an autos company. The Tata group comprises over 100
seven sectors: communications and information technology, engineering,
materials, services, energy, consumer products and chemicals. Tata has
operations in more than 80 countries and exports products and services
countries all together.
Steel is one of the top ten
steelmakers and Tata Motors is one of the top five commercial vehicle
manufacturers in the world. TCS is a leading global software company
Global Beverages is the second-largest player in tea in the world. If
wasn’t enough Tata Chemicals is the world's second-largest manufacturer
ash and Tata Communications is one of the world's largest wholesale
carriers. Did I mention that they also
own Land Rover and Jaguar? READ
PPG Industries (PPG)
Even with the weakness in Europe,
the coatings giant PPG is still seeing strong growth in the U.S. and
emerging markets, propelling it to new 52 week
highs. A majority of
PPG’s business is derived from OEM automotive coatings and coating
since 1924. Being that auto and truck sales have been
in recent months and the trends seem to be improving PPG may stand to
further from increased production of not just autos, but all types of
manufacturing that requires their coatings. They may be the
derivative trade you haven't thought of.
was recently featured in our Investment
Ideas column for its healthy dividend yield and stable
Sonic Automotive (SAH)
Rarely will a stock that misses
earnings estimates be selected as a momentum rank-buy; but given the
the report, Sonic may have upside from these levels.
has held above its 200 day
moving average and been in an upward trend since October.
selloff following an earnings miss sent shares down roughly 9%, which
actually attractive buyers at advantageous prices and allow
in this stock to continue. With a P/E of less than 10, a PEG
ratio of 0.6
and relatively strong growth since the recession, Sonic’s shares may
sales have been on the rise
over the past several months and the trend seems to be continuing
Tractor Supply Company (TSCO)
is operating on all cylinders. The farm and
ranch retailer recently preannounced first quarter sales that topped $1
for the first time in the company's history. Shares of this Zacks #1
(Strong Buy) continue to scream higher, hitting new all-time highs
Supply Company operates 1117
stores in 44 states that supply products for recreational farmers and
The retailer focuses on the needs of those who live in rural areas,
tradesmen and small businesses.
company offers merchandise in
areas such as equine, pet and small animal products; hardware, truck
products; seasonal lawn and garden products; maintenance products; and
recreational clothing and footwear. READ
A Levy is the Senior
Stock Strategist for Zacks.com. He is also the Editor in charge of the
COINSTAR INC (CSTR): Free Stock Analysis Report
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