For Immediate Release
Chicago, IL – April 14, 2021 – Zacks Equity Research Shares of Lithium Americas Corp. LAC as the Bull of the Day, PLBY Group, Inc. PLBY as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Ford Motor Company F, Toyota Motor Corporation TM and Honda Motor Co., Ltd. HMC.
Here is a synopsis of all five stocks:
Bull of the Day:
Lithium Americas Corp is a Zacks Rank #2 (Buy) and it is the Bull of the Day today. This is a name that I have pointed to as being a benefactor of the surge in demand for electric vehicles. At the start of the year I told subscribers of Zacks that I believed that 2021 would be the year of the EV, and so far so good on that call. We have TSLA staying in the headlines and posting great delivery numbers. Those of you that recognize my name know that I have been a long time bull on TSLA and I believe the stock continues to move higher.
LAC is in the EV space as a supplier for the batteries in the cars and other devices.
Lithium Americas Corp. owns Lithium Nevada and RheoMinerals Inc., a supplier of rheology modifiers for oil-based drilling fluids, coatings and specialty chemicals. Lithium Americas Corp. is based in Vancouver, Canada.
I see a good earnings history, not a great one, a good one. The company has posted 3 beats in the last four quarters. The lone miss was 3 quarters ago and it was a big one so it skews the average.
Earnings Estimate Revisions
I see estimates moving higher across the board.
This quarter has moved from a loss of 12 cents to a loss of 10 cents.
Next quarter saw a move of the exact same amount.
This year is looking at a loss of 31 cents and that is better than the previous reading of a loss of 38 cents.
Next year the analysts have a loss of 4 cents and that is down from a loss of 7 cents.
Just looking at the numbers you have the sense that the company might be able to turn the corner and post a profitable quarter soon.
No earnings means no forward PE, so we have to lean on the price to book. I see a 9.3x book multiple which is high, but the idea here is that the demand for lithium is increasing. The demand for automakers alone is driving this stock higher.
Bear of the Day:
PLBY Group is a Zacks Rank #4 (Sell) and I am making it the Bear of the Day today. I can hear it already as I write this the day before and the stock running more than 20% higher for the second day in a row…. HOW CAN THIS STOCK BE THE BEAR OF THE DAY???? Well sometimes I use the Bear of the Day as a means of highlighting why these articles are written and at the same time there is a chance to point out where there could be some mistakes.
I did this once before with WTER, highlighting why the stock slipped to a Zacks Rank #5 (Strong Sell) and why I believed that the company was worth a deeper look. WTER remains on my sonar … I mean my radar screen to this day. PLBY is another instance.
The Playboy brand has been around for decades and most of you probably know all about it. It was the classy adult entertainment magazine that had a next generation style leader in Hugh Hefner. The brand expanded to pay per view TV, then a show on basic cable about the Hef’s 3 girlfriends. All the while the company saw the bunny ears brand find its way in all sorts of clothing.
Fast forward to today and we have a SPAC that is seeing some really interesting moves. The stock is running and that alone does not mean its time to sell it or that it should be the bear of the day. The reason the stock is the bear of the day is due to the earnings estimate revisions.
The Zacks Research System doesn’t show any earnings history for PLBY. The company listed on the NASDAQ in February after combining with blank check company Mountain Crest Acquisition Corp. That deal brought in $100M for PLBY and so far there hasn’t been an earnings report.
I see an earnings report came out in March and it had the company posting $46M on top and a loss of $512K. That was considerably better than the $21M on top and $6M loss in the year ago period.
The earnings history is important, but it isn’t the biggest factor that changes the Zacks Rank.
Earnings Estimate Revisions
I only see two estimates, so the likely scenario is that after one estimate came out, the next one was lower and that caused the consensus to drop. That is what the Zacks Rank is all about… looking at the movement of earnings estimates. When the estimates move lower the Rank follows.
This quarter has moved from 4 cents to 3 cents.
Next quarter was 7 cents but now it's 4 cents.
This year is looking at a gain of 29 cents, but it was 35 cents.
Next year the analysts have a gain of 47 cents and that is down from 53 cents.
I am not picking on these analysts… but these numbers are very, very low. That said, these estimates came out before the NFT craze hit and the company announced it was getting into the mix.
So how do you like the valuation now? I see a 90x forward earnings… but that earnings number could easily triple if the company executes on an NFT strategy for the library of photos that the company has. I see a 3.4x price to book… but that number will change drastically too. At the end of the day, the licensing of apparel is being brought in house and that alone will drive earnings much higher down the road. I see this stock heading towards $100 or more.
So This Is A Bear Of The Day?
The point of the bear of the day article is to look at what the Zacks Rank is doing. Why is the Zacks Rank moving the way it is and hopefully explain the usefulness of the Rank. From time to time we find great opportunities to talk about how these little anomalies make a stock that looks great actually showing a weak Rank. I hope I explained why it’s a Zacks Rank #4 (Sell) and why I believe that it will soon be a Zacks Rank #1 (Strong Buy).
3 Legacy Automakers to Watch as EVs Speed Up
Electric vehicles (“EVs”) have been taking the automotive space by storm over the past few years as the world continues to battle climate change and reduce carbon dioxide emission. Major players have driven this shift toward EVs and the pace of this adoption looks set to accelerate further.
Notably, IHS Markit predicted in a report that the global sales of battery EVs and other EVs are estimated to surge about 70% in 2021. Moreover, the report mentioned that in 2025, global sales are expected to top 12.2 million, reflecting a compounded annual growth of 52%.
Markedly, pure players have largely dominated the EV space so far with legacy automakers feeling the heat. However, legacy automakers have been picking up their pace gradually by making efforts to shift their focus to EVs. Toward that end, major U.S. automobile manufacturers like Ford Motor Company (F) have stated their commitment to EVs and are looking to heavily invest in the space going forward.
Ford recently announced that it will be increasing its investment in electric and autonomous vehicles to $29 billion, as quoted in a Verge article. An NBC article cited that General Motors plans to completely phase out its vehicles that use internal combustion engines by 2035 and go all-electric.
Moreover, this rapid shift to EVs is increasing competition and in such a scenario, automakers have to present more new vehicle models in order to lure customers into the EV market. Toward that end, a report by BloombergNEF predicted that there will be over 500 different EV models available globally by 2022.
Legacy Automakers See EV Sales Spiking in First-Quarter 2021
The first quarter of 2021 has been noteworthy for legacy automakers in terms of EV sales. Both Ford and General Motors saw EV sales rising in the United States in the first quarter.
Notably, Ford reported that its Mustang Mach-E and the F-150 PowerBoost Hybrid saw an increase of 74% with 25,980 vehicles sold, as quoted in a Detroit News article. Meanwhile, General Motors also saw its Bolt EV sales increasing 53.67% to 9,025 units, as mentioned in a GM Authority article.
3 Stocks to Keep an Eye On
Legacy automakers have been deepening their focus on the EV space as the shift to going green is accelerating. This makes it a good time to look at names that are continuing their focus on this uptrend and stand to benefit from this potential. Notably, we have selected three such stocks that carry a Zacks Rank #1 (Strong Buy) or 3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.
Toyota Motor has been offering its hybrid vehicle Camry and the company also recently forayed into the EV space and is set to debut its global electric SUV soon. Toyota currently has a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings increased 28.6% over the past 60 days. The company’s expected earnings growth rate for the next five years is 11.2%.
Ford has also forayed into the EV space with models like the 2021 Mustang Mach-E and 2020 Fusion Hybrid. The company currently has a Zacks Rank #3. The Zacks Consensus Estimate for its current-year earnings increased 2.9% over the past 60 days. The company’s expected earnings growth rate for the current year is more than 100%.
Honda Motor is also venturing into the EV space with offerings like the Honda e as the company is striving to electrify two-thirds of its global unit sales in 2030. It currently has a Zacks Rank #3. The Zacks Consensus Estimate for its current-year earnings increased 17% over the past 60 days. The company’s expected earnings growth rate for the next five years is 21.8%.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>
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