Stock Market News & Stocks to Watch from StraightStocks » Transportation Infrastructure

On the Road Again in Russia

Robert Amsterdam — Sun, 09 Aug 2009 14:27:22 +0000

Good late morning, afternoon from Washington DC. Before I make my way out to the airport to fly back home to London, I thought I would catch up on some of the weekend's news.Speaking of travel, over the years our...

Lindsay Beats Expectations – Analyst Blog

Zacks Market Commentaries — Thu, 02 Jul 2009 20:17:13 +0000

Lindsay Corporation (LNN) reported fiscal third-quarter earnings of $0.42 per share, beating our expectations of $0.34 per share and market expectations of $0.25 per share. The company has been successful in cutting personnel as well as other operating expenses through its cost-reduction initiatives implemented in the first three quarters of fiscal 2009.

The company posted revenue of $84.6 million for the quarter, compared to $143.6 million in the third quarter of fiscal 2008. Current global economic conditions are adversely impacting the company's businesses. Irrigation equipment revenue declined 45%, and Infrastructure revenue was down 21% year-over-year.

In the Irrigation segment, Lindsay witnessed a 47% drop in domestic sales and 40% drop in international revenue. Management stated that despite an improvement in agricultural commodity prices, farmers have stayed away from purchasing capital goods due to the prevailing uncertain market conditions.

The Infrastructure business is highly dependent on government funding of transportation projects. During the past several months, federal, state and local governments have cut down spending on infrastructure projects, pending the availability of funds. The company stated that it hasn't experienced the impact of the stimulus spend on its top-line to date.

Moreover, the company announced that the Mexico City Movable Barrier project continues to be delayed pending the resolution of issues between the contractor and local government. The project of a total contract value of approximately $19.6 million was originally expected to begin in April 2009.

It was anticipated that the company would realize the majority of the total contract value in the second half of FY09. However, the company is now uncertain about seeing any revenue from this project this year. The uncertainty surrounding the project further underscores the lack of visibility for the company's top-line performance.

Though the difficult macro-economic environment is a concern in the near term, we believe the long-term outlook for Lindsay remains positive due to the need for increased food production driven by the worldwide population growth and the strong need to improve transportation infrastructure.

We maintain our Hold recommendation on LNN.

Read the full analyst report on "LNN"
Zacks Investment Research

Top Performing Stocks for the Week Ended Jan 23 – Zacks #1 Rank Top Performers

James Giaquinto — Mon, 26 Jan 2009 00:00:00 +0000

The five best performing stocks on the Zacks #1 Rank List last week were: LaBranche & Co. Inc. (LAB), The Scotts Miracle-Gro Company (SMG), El Paso Pipeline Partners, L.P. (EPB), Natural Resource Partners L.P. (NRP) and DeVry, Inc. (DV).

LaBranche & Co. Inc. (LAB) announced net income of 41 cents per share on a pro forma basis last week, which eclipsed both the consensus and year-ago result. The company was a top-performing Zacks #1 Rank company for the week ended Jan 23 as shares moved higher 12.2%.

Earnings estimates for this year are up 21% over the past 7 days. Looking a little further back, expectations have advanced approximately 54% over the past month. Estimates for the company's first and second quarters each moved higher in the past 7 days as well.

Shares of The Scotts Miracle-Gro Company (SMG) gained approximately 7.9% last week, which was enough to make the lawn and garden products company a top-performing Zacks #1 Rank. Earnings estimates for this fiscal year, which ends September 2009, are up 6.8% over the past 3 months, including a gain of almost 1% in 30 days. Furthermore, analysts currently expect next fiscal year's profit to advance almost 14% ahead of this fiscal year.

On Jan 22, the company announced that its Board approved the payment of a cash dividend of $0.125 per share, payable Feb 19 to shareholders of record on Feb 5. During the company's annual shareholders meeting, SMG's chairman and CEO stated that he remains confident in the company's prospects for 2009 and that retailers remain supportive of the lawn and garden category. The company will announce its fiscal first-quarter results in early February.

El Paso Pipeline Partners, L.P. (EPB) announced last week that it raised its quarterly cash distribution by 6.7% to 32 cents per unit for the fourth quarter of 2008, compared to 30 cents for the third quarter. The distribution will be paid Feb 13 to holders of record on Jan 30. The company said it was pleased to raise its cash distributions due to its successful acquisition last year.

EPB made the Zacks #1 Rank Top Performers List for the week ended Jan 23 with shares that advanced 6.5%. One analyst raised the earnings estimates for the December 2009 year, sending the earnings expectation slightly higher over the past 7 days. The past 3 months has seen an advance of 2.9%. In addition, analysts currently expect profit for 2009 to increase approximately 17% from 2008. EPB is a Delaware limited partnership formed by El Paso Corporation to own and operate natural gas transportation pipelines and storage assets.

Natural Resource Partners L.P. (NRP) made the Zacks #1 Rank Top Performers List for the week ended Jan 23 as shares increased 6.1%. Over the past 2 months, earnings estimates for this year and next are up 3.3% and 4.3%, respectively. Also, analysts expect next year's profit to advance approximately 26% over this year. NRP is a master limited partnership that is principally engaged in the business of owning and managing mineral reserve properties. It owns coal reserves and coal handling and transportation infrastructure in the 3 major coal-producing regions of the U.S.

Last week, NRP slightly raised its fourth-quarter 2008 distribution by $0.01 to $0.535 per unit, which will be paid on Feb 13 to unitholders of record on Feb 5. This marks the company's 22nd straight increase in the distribution. Looking toward 2009, the company expects total revenues to increase about 11% over 2008 to between $294 million and $338 million.

DeVry, Inc. (DV) is scheduled to report its fiscal second-quarter results later today. In its fiscal first-quarter, the company reported earnings per share of 48 cents that beat the consensus by more than 9%. Revenues advanced more than 21% from the previous year. The company was also featured as a Growth & Income stock of the day at Zacks.com last week. DV is in a good industry for the current environment, as workers historically look to improve their skills during difficult economic times with rising unemployment.

With shares that gained almost 3.2% last week, DV made the Zacks #1 Rank Top Performers List. Over the past 2 months, earnings estimates for the fiscal years ending June 2009 and June 2010 are up 1.4% and 3.3%, respectively. Analysts also expect next fiscal year's EPS to gain approximately 25% on this fiscal year.

"EPB" Free Stock Analysis: Buy? Sell? Hold?
"NRP" Free Stock Analysis: Buy? Sell? Hold?
"SMG" Free Stock Analysis: Buy? Sell? Hold?
"DV" Free Stock Analysis: Buy? Sell? Hold?
Zacks Investment Research

CEO of DRI Corp. (TBUS) Discusses Emerging Global Opportunities for Growth

QualityStocks — Wed, 10 Sep 2008 11:55:44 +0000

DRI Corporation (NASD: TBUS), a digital communications technology leader in the domestic and international surface transportation and transit security markets, recently announced that the company’s chief executive officer, David L. Turney, presented earlier this week at The Wall Street Analyst Forum in New York City. During his presentation, Mr. Turney stated, “For a company our [...]

China Investment In Fixed Assets Accelerates

Edward Hugh — Fri, 15 Aug 2008 08:45:00 +0000

China's factory and property spending growth accelerated in July, fueled by rebuilding after the Sichuan earthquake in May and snowstorms in January and February. Urban fixed-asset investment rose 27.3 percent to 7.22 trillion yuan ($1 trillion) year on year in July, according to the latest data from the Chinese statistics bureau, after gaining 26.8 percent in the first half. China is at the present time busy rebuilding roads, power lines, factories and homes after the worst snowstorms in half a century and an earthquake that killed more than 69,000 people.

Railway spending climbed 35.8 percent in the first seven months to 105 billion yuan, up from 20.4 percent for the first half. China plans to spend 3.8 trillion yuan on transportation infrastructure in its five-year plan running through 2010.

Growth in spending in real-estate development slowed to 30.9 percent from 33.5 percent. Ferrous-metals investment climbed 31.6 percent from 27.5 percent. Non-ferrous metals rose 40.5 percent after climbing 39.2 percent.

Digital Recorders Inc. (TBUS) is Getting Their Message Out

QualityStocks — Fri, 27 Jun 2008 13:41:50 +0000

Digital Recorders Inc. (TBUS) is a digital communications technology company in the domestic and international public transportation and transit security markets. Incorporated in 1983 in North Carolina, they list on the NASDAQ as part of the Communication Equipment industry. Headquartered in Dallas, Texas, the company’s market capitalization is $31.28M. Digital Recorders Inc.’s products help increase [...]

Russia’s stocks rally as Putin passes the presidency to Medvedev

Jason Corcoran — Tue, 24 Jun 2008 16:36:00 +0000

Financial News

Jason Corcoran in Moscow
23 June 2008

Investment climate is steady as new leader continues reform agenda

Russia’s equity markets are enjoying the country’s honeymoon period under its new leadership, but investors remain wary of how the power-sharing arrangement will evolve.

The changing of the guard on May 7 saw Vladimir Putin hand over the presidential mantle to his protégé Dmitry Medvedev. Within hours, Medvedev had nominated his mentor Putin as Prime Minister.

The smooth choreography proved to be a fillip for Russia’s main stock markets and sparked a buying spree by foreign funds.

The MSCI Russia Index was the best performing emerging equity market last month, rising 15.7%, and outperforming the MSCI EM Emea index, which rose 7.3% in the same month. Inflows recorded in the third week of May of $542m (€350m) were the highest in Russia for more than two years, according to data provider Emerging Portfolio Fund Research.

Peter Halloran, chief executive of Russian hedge fund group Pharos Financial, said: “So far, their partnership has been smooth. There has been no discord and they are moving ahead with the reform agenda, which is the trick with emerging markets. It will take at least a year if we are going to see any friction between the two.”

Most investors agree the new order has yet to result in any tangible change to the investment climate due to the continuity in policies and the Government’s team.

Putin unveiled his new cabinet, handing key roles to heavyweight economic liberals, while keeping several hardliners with a secret services background on board.

Yulia Tseplayeva, chief economist at Merrill Lynch in Russia, said the early running indicated Putin was focusing on geopolitics while Medvedev was taking care of institution-building.

She said: “The transfer from Putin to Medvedev hasn’t taken place yet. It’s been a transfer from Putin to Putin-Medvedev. Putin is the main decision-maker and his significant presence is very obvious through the mass media, and the public doesn’t see any difference. It’s essentially the same team, the same policies without any major revisions.”

The best-performing sector over the past month has easily been energy, which was fired up by Putin’s statement that the tax regime in the oil sector would be eased by August. Russian Energy giants Rosneft, Surgutneftegaz, Lukoil, Gazpomneft, Transneft and Novatek rallied by between 23% and 26% last month, after the sector had failed to be swept up by the boom in global oil prices.

Tseplayeva added: “The Government could no longer afford to ignore the oil lobby as its main taxpayer. The plan to cut mineral extraction taxes for the oil sector was announced a year ago but Putin dressed it up in a very investor-friendly way and the markets responded in kind. The 100bn roubles (€2.7bn) a year will be good for the industry but it’s only 0.2% of overall GDP.”

Goldman Sachs reacted by raising its 12-month estimate for the RTS index by 12% to 2750, recommending energy blue-chips. Oil and gas stocks are expected to continue to thrive on the back of the decision to cut taxes, although it might mean other sectors have to take up the slack.

Chris Weafer, chief strategist at financial services group UralSib, believes the mining industries such as coal and metals could be most at risk. He said: “This year, there is less pressure to levy higher taxes to compensate the budget as the oil price is well above the average assumed in the budget. We believe the finance ministry could easily afford to give up $20bn to the oil industry.
“But the ministry will not want to have to bet on the oil price every year and will undoubtedly push hard for the oil tax reduction to be balanced with higher taxes on other parts of the country’s extractive industries.”

The steel sector has also been hit by suggestions the Government is considering higher export duties on steel to compensate for lost revenues from lower oil taxes.

Producers have enjoyed a surge in steel prices, pushing up costs in industries that use the metal in their production. Analysts said the losers would be companies such as Severstal, Magnitogorsk Iron & Steel Works and NLMK.

With the restructuring of the electricity grid UES almost complete, several Russian funds are betting that hydro-electricity company RusHydro will become the new proxy for the sector.

Last month, the RTS was up 15.9% while the Micex exchange’s index was ahead by 15.5%. While the lion’s share of the upside came from oil and gas, financial stocks also powered ahead with the financials index up 10.2%. Fund managers are bullish on banking blue-chips VTB and Sberbank, which have both flagged in value since their combined $18bn listings last year.

Listed construction and real estate developers have also shown signs of life after the Government approved a $570bn programme to overhaul and expand the country’s transportation infrastructure over the next seven years.

The latest GDP data shows household consumption up 13.6% in real terms during late 2007, which helps explain the continued boom in the consumer economy. Investors are keen on Russia’s second-largest retailer Magnit, which raised $490m in an April listing on the London Stock Exchange to fund expansion.

Tseplayeva said: “The consumption boom is shifting away from Moscow to regional cities such as Ekaterinburg, Novosibirsk, Krasnoyarsk and St Petersburg. Food retailers such as Magnit are primed to do well.”

All signs are that the drought of flotations experienced in the first quarter is over. Last month there was the $449m listing by freight operator Globaltrans and the $1.2bn flotation by retail group X5.
In the global capital markets, Russian companies are eyeing an expanding role. Medvedev has called on business leaders to embark on a foreign acquisition spending spree to boost technological expertise and to diversify into new markets.

Russian business conglomerate Sistema has opened its cheque book in foreign markets by taking a majority stake in Indian telecoms operator Shyam Telelink. Russian companies in the metal and steel sectors such as Severstal and Evraz have also begun to invest globally and extend their reach.

Stephen Cohen, chief executive of Troika Dialog’s fund management business, warned this trend could be to the detriment of capitalising on domestic growth. He said: “Return on equity remains high in Russia and as domestic growth remains very strong it may not be easy for Russian companies to find investment opportunities outside Russia that are as attractive as the domestic opportunities.

“Plus buying foreign companies per se does not necessarily reduce reliance on foreign technology. The solution to that problem is probably more to do with greater expenditure at home on research and development and on education and direct hiring of foreign personnel to work in Russia.”

Medvedev’s call has been answered by state-controlled companies such as savings giant Sberbank, which is looking to acquire banks in the Commonwealth of Independent States, eastern Europe and China.

Alexander Kotchoubey, managing director of Renaissance Investment Management, which has more than $6bn in assets under management, said: “Sberbank and VTB are immune to the international credit crisis because of their minimal exposure to sub-prime and they might be able to pick up distressed assets on the cheap in foreign markets.”

Alexei Miller, chief executive of state-controlled Gazprom, announced in late May that the energy giant is aiming to have the largest market capitalisation in the world. Gazprom, which recently overtook China Mobile to become the third-largest global company, is believed to be interested in taking control of TNK-BP, the Anglo-Russian venture.

TNK-BP’s Russian shareholders are embroiled in an ownership dispute with their British counterparts, which analysts say has been caused by Kremlin pressure on both groups to sell out to a state-controlled company. Investors believe events surrounding TNK and Shell’s surrender last year of the Sakhalin-2 project contribute to the wariness among European and US legislators about Russian investment in their countries.

Weafer said in a note: “Prime Minister Putin late last year said the Government believes approximately $50bn of potential Russian investment into Europe is being blocked because of these worries.”

At the economic forum showcase in St Petersburg at the beginning of June, investors were looking for specifics on how the Government plans to progress reforms and investment plans declared before the parliamentary and presidential elections.

Kotchoubey said: “There hasn’t been a clear delineation of how power should be shared between Putin and Medvedev. Investors are aware that the immaculately turned out double-headed eagle hasn’t had its feathers preened yet.”