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Michael Michaud is the founder of Invest2Success.com (http://www.invest2success.com/) and the Invest2Success Blog (http://invest2success.blogspot.com/). He has been investing and trading in the financial markets since 1989. He founded Invest2Success.com to empower individual institutional... More
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  • Free Stock Pick Investing In Airlines Earnings Growth

    United Airlines

    This Weeks Free Stock Pick - Investing in Airlines Earnings Growth

    It has been a very interesting few weeks for airline stocks as a number of factors have led to significant volatility in this space. Many stocks here saw losses approaching 20% in the time frame, though most have managed to recoup these losses in short order.

    Arguably the biggest reason for the steep losses, besides the broad market decline, was the Ebola virus. There was a big worry that passenger travel would be significantly curtailed following the outbreak on American shores, but this has died down as Ebola has been relatively contained (besides the current NYC case).

    Once the worries in Texas died down though, airline stocks rebounded on strong fundamentals, pretty much across the board. This was especially true as oil prices remain under pressure, with Brent crude oil (arguably a better benchmark for jet fuel) trading at $86/bbl., well below its 3-month high which is near $108/bbl.

    Investors also saw strong earnings in this corner of the market, further boosting the prospects of the space going forward. While these trends have impacted a variety of airlines, one that is a particularly interesting investment right now in this environment is undoubtedly United Continental Holdings (NYSE:UAL).

    UAL in Focus

    United Continental Holdings represents one of the world's largest airlines, United. The company was at the center of the Ebola controversy thanks to their transportation of passengers from Europe who had been in the virus-stricken region, but this phase is arguably over now.

    In fact, UAL's chief revenue officer Jim Compton said that bookings haven't been affected by the Ebola outbreak, suggesting that the market's fears over this issue have been overblown. And given the company's recent earnings report, investors could see more clear skies ahead if the current trends are any guide.

    UAL Earnings

    UAL posted EPS of $2.75, beating estimates of a $2.70 figure. This marks yet another beat for UAL as the company hasn't missed in the past four quarters and it has posted an average surprise of 6.4% over the time frame.

    United Airlines Stock Chart

    Analysts seem pretty bullish on the company's prospects too, and how can you not be given the price of oil lately. Over the past month, the consensus estimate has risen for both the current quarter and the current year, while no estimates have moved lower for either the current year or the next year time frame.

    In fact, for the current year, the consensus has moved from $4.48/share 30 days ago to $5.13/share today, representing a pretty solid move higher. And with this big move in expectations, UAL is actually expected to post EPS growth of 84% year-over-year, meaning that this company still has plenty of growth opportunities left at its disposal.

    Bottom Line

    Given the slump in oil and (somewhat) declining Ebola fears, UAL has managed to surge back in recent trading. And with recent earnings estimate revisions, UAL seems well-positioned for more gains in the months ahead as well.

    Given this, we have assigned UAL a Zacks Rank #1 (Strong Buy), and are looking for more outperformance from this stock in the near term. And given that the airline industry is currently ranked in the top 10%, United Continental should be in pretty great company and could be poised to soar to new heights as we close out the year.

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    Disclosure: The author has no positions in any stocks mentioned, but may initiate a long position in UAL over the next 72 hours.

    Oct 27 7:07 PM | Link | Comment!
  • This Weeks Free Stock Pick

    Dominos Pizza

    This Weeks Free Stock Pick - Investing in Restaurant Earnings Growth

    Domino's Pizza, Inc. (NYSE:DPZ) posted another set of stellar quarterly results recently despite a tough consumer environment. Shares of this Zacks Rank #1 (Strong Buy) soared to a new all-time high as analysts raised full year estimates.

    Domino's is one of the world's largest pizza restaurant brands with 11,250 stores in 75 global markets. It's international sales now account for more than 50% of the company's revenue.

    Its one of the leaders in the restaurant industry in deploying digital channels, such as smartphone and iPad apps, to take sales.

    In June 2014, Domino's debuted voice ordering for its iPhone and Android apps.

    Another Earnings Beat

    On Oct 14, for the fourth straight quarter, Domino's beat the Zacks Consensus Estimate for the third quarter. Earnings were 63 cents compared to the Zacks Consensus Estimate of 61 cents.

    It has an impressive earnings surprise track record, only having missed twice in the last 5 years.

    Dominos Pizza Stock Chart

    But it wasn't earnings which impressed investors.

    Domestic same store sales jumped 7.7% year over year while international same store sales rose 7.1%. It was the 83rd consecutive quarter of international same store sales growth.

    These same store sales numbers put Domino's among the elite of the restaurant brands right now, along with the likes of Chipotle.

    Total revenue rose 10.5% due to higher supply chain revenue from increased volumes in the supply chain centers and elevated commodity prices, especially cheese, as well as increased sales of equipment and supplies to stores that are reimaging.

    Shares Jump to New High

    Shares surged to a new all-time high on the results.

    But if you're buying them now, you're not getting them cheap.

    Domino's trades with a forward P/E of 28.8, the highest forward P/E since the company went public in 2004.

    It does have growth, however. It has an impressive earnings growth history over the past 5 years.

    Dominos Pizza Stock Chart

    Analysts expect earnings to rise another 18.6% in 2014 and 17% in 2015.

    If you're willing to pay up for the growth and you're looking for a consumer-play, then Domino's is certainly one to keep on your short list.

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    Oct 21 7:37 PM | Link | Comment!
  • Twitter Jumps Into The Mobile Online Payments Space

    Initial Public Offering

    Twitter Jumps Into the Mobile Online Payments Space

    Twitter Inc. (NYSE:TWTR) Teams Up with French Bank on Mobile Payments by Zacks Investment Research

    Twitter Inc. (TWTR) has recently teamed up with major French bank, Groupe BPCE, in hopes of finding new ways of expanding its commerce offerings of its own. The move comes in as Apple Inc. (NASDAQ:AAPL), and other companies like Facebook Inc. (NASDAQ:FB) eye money transfer payments as a new market, in which there is lots of room to burgeon.

    Online payments definitely seems like a good, innovative method for TWTR, as it will push the firm's revenues forward, and will also allow for more active daily and monthly users, as they will be tweeting their money payments/transfers with friends or others on TWTR. The competition is not just between TWTR, FB, AAPL, Google Inc. (NASDAQ:GOOG), but also between major credit card issuers and banks, such as Visa Inc. (NYSE:V), and MasterCard (NYSE:MA).

    September and so far in October, worldwide markets have been very turbulent, and volatile, and that is due to lots of global concerns, but also due to the oil glut, that is causing oil prices to dip, which has in turn, negatively affected investors' sentiments regarding equities and ETFs. Could TWTR be a solid stock to hold on to though, despite this large correction?

    It is currently a Zacks Rank #3 (Hold), however that is only probably due to the sell-off that has rocked the Dow Jones Industrial Average hard, especially in the last several trading days. Twitter was a Zacks Rank #2 (Buy) prior to the stock market correction, and the social platform's stock has definitely got a lot of room to grow. This may be especially true if TWTR can get this mobile payment system off the ground and see some traction in the French market.

    Details

    TWTR users in France will use S-Money, Groupe BPCE's method for transferring money online, and it has bypassed security issues through not requiring users to show bank details or personal information. TWTR has been good in releasing new products and services, such as Twitter Buy, which enables users to search for their desired items, and buy them directly off of TWTR, so S-Money seems like a great route, so as not to solely rely on advertisements for revenue, however, the online payments market will be tested when Apple Pay debuts later this month.

    Nonetheless, TWTR's earnings in November will indicate whether the company's recent acquisitions and innovations have harvested fruit. Analysts have revised and upped their EPS estimates for the current quarter (9/2014), however EPS estimates have not really changed from -0.27, and TWTR has not been very good in surprising EPS expectations, as it carries an average surprise rate of -106.40% over the past four quarters.

    Additionally, TWTR has had a very volatile year, as it has surpassed the S&P 500 Index's performance from around August till today, while earlier in the year it was an underperformer. Investors should err on the side of caution till the market settles down a bit, and a more solid social media platform to invest in would be FB, which is currently a Zacks Rank #1 (Strong Buy), or even LinkedIn Corporation (NYSE:LNKD), which sports a Zacks Rank #2 (Buy).

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    Track n Trade CandleStick Auto-Recognition Plug-in
    Quickly identify candlestick patterns without thinking. With Track 'n Trade, you have the ability to click, and select your favorite candle patterns, and have Track 'n Trade find, identify, and even auto-trade each signal through our famed Autopilot Trading System.

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    Trading Softwares available to improve your investment returns.

    Oct 14 9:35 PM | Link | Comment!
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