Chicago, IL – April 09, 2015– Zacks Equity Research highlights AllianceBernstein (AB-Free Report) as the Bull of the Day and Royal Gold (RGLD-Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Pretium Resources (PVG-Free Report), Asanko Gold (AKG-Free Report), Mitsubishi UFJ Financial Group, Inc. (MTU-Free Report) and Kyocera Corp. (KYO-Free Report).

Here is a synopsis of all six stocks:

Bull of the Day:

It doesn’t take a rocket scientist to figure out that the stock market has been on fire the last few years. After hitting a devilish low of 666 on March 9, 2009, the S&P 500 has more than tripled off the lows. For the longest time the individual investor still sat on the sidelines, reluctant to put their hard earned money back in a risk position. Rather, the majority of investors slowly crept back into the market, very cautiously.

As asset prices have risen, so have the profits for the investment management firms and mutual fund companies. Mutual funds were particularly appealing for individual investors looking to spread their risk around several stocks in the market versus just banking on one. Well one of these very company’s stocks is one you should feel good about throwing some money at. It’s our Bull of the Day, Zacks Rank #1 (Strong Buy) AllianceBernstein (AB-Free Report).

AllianceBernstein provides diversified investment management services, primarily to pension funds, endowments, foreign financial institutions and individual investors. Their investment services encompass equities, fixed income, multi-asset and alternatives. AB also provides independent investment research, trading, and brokerage-related services to institutional clients through Bernstein Research Services. Total client assets under management are estimated to be approximately $474 billion.

The business must be good for AB as analysts around the street are upping their earnings estimates for the company. Over the last 60 days, four analysts have revised their numbers to the upside while two have followed suit for next year. The bullish revisions have taken consensus up from $1.97 for the current year all the way to $2.06. The same attitude has pushed consensus for next year up from $2.24 to $2.27.

That’s part of the reason for the Zacks Rank #1 (Strong Buy). The other part is the recent earnings surprises. Over the last three quarters, AllianceBernstein has surprised two of the last three quarters. The move impressive of which was last quarter’s 6 cent beat with the number coming in at 57 cents per share versus the 51 cent Zacks Consensus Estimate.

The bullish sentiment and the recent surprises have spelled some great price momentum as of late. AB was trading at a relative low down near $16.50 in the beginning of July 2013. A fierce rally throughout the start of 2014 took the stock up to resistance near $27. The stock failed at that level six times before finally getting the bids to push through in February 2015. The latest run in the stock has it pushing near fresh 52-week highs here at $30.83.

The technical aspects of the chart remain very bullish even as the stock pauses near the highs. The 21 day moving average is sitting down at $30 and providing short term support as well as confirming the bullish trend. The commodity channel index has come down from extreme oversold territory but is still confirming the positive trend at 56.19. Should the CCI break down below the zero line is could spell some short term weakness in the stock. Support would be down at $27.50. 

 Bear of the Day:

One of the worst parts about the “Boom-Bust” cycle isn’t the part where the last guys holding the back get beat up. To me, it’s the people that are still talking about those glory days like Al Bundy and his five touchdowns in a single game. I’m not going to lie, I’m guilty of that too. Not just the Al Bundy thing but looking at a stock or a commodity that had been trading much higher in the past and telling myself that I’m getting in on the ground floor before it rallies again. “Now it’s going to come back, you just watch.”

During this major dollar bull market we’ve seen some rough times for gold. Gold was the talk of the town just a few short years ago when investors were rushing into the base metal on an “uncertainly” trade. Using gold as an inflationary hedge and a way to bet against all the fiat currency central bank money printing. While the theory makes sense, the fact is that the market has not been playing along. And in the meantime, while waiting for markets to become rational you may become insolvent. In other words, the timing just isn’t right.

That’s the way I feel right now about today’s Bear of the Day, Royal Gold (RGLD-Free Report). Royal Gold is engaged in the acquisition and management of precious metals royalties. They seek to acquire existing royalties or to finance projects that are in production or near production in exchange for royalty interests. They also explore and develop properties thought to contain precious metals and seek to obtain royalty and other carried ownership interests in these properties through the subsequent transfer of operating interest to other mining companies. That’s a fancy way of saying they are a gold mining company.

While gold has made a little bit of a comeback as dollar strength has relented, that hasn’t translated to earnings estimate revisions to the upside for the stock. On the contrary, several analysts have come out and dropped their estimates to the downside over the last 60 days. In fact, four analysts have dropped their numbers for the current year while five have revised lower for next year.

The bearish analyst behavior has had a negative effect on our Zacks Consensus estimates. Current year consensus has dropped from $1.31 all the way down to $1.16 while consensus for the next year has dropped from $1.61 to $1.51.

The recent bearish attitude has led to a rough 2015 so far for the stock. After spiking from below $62 to nearly $78 to start the year, RGLD has continually sold off since then. The YTD low sits below $58, over $5 away from the current price. Bearish on the technical side you have the stock trading below the 21 day moving average as well as a Commodity Channel Index that reversed at the zero line and now stays firmly below it at -7.78.

There are a few other mining companies that are put in a better light using the Zacks Rank. Among these are Zacks Rank #1 (Strong Buy) Pretium Resources (PVG-Free Report) and Zacks Rank #2 (Buy) Asanko Gold (AKG-Free Report).

Additional content:

Japan Stocks Hit Record High: 2 Stock Picks

The Nikkei 225 hit a 15-year high on Wednesday even as the Bank of Japan left its monetary policy unchanged. Ignoring the lone voice of dissent, a majority of the central bank’s policy board voted to keep asset purchases at their current level. Meanwhile, opinion is divided as to whether stimulus should be wound down or increased over the coming months.

Destabilizing Financial Markets

Some central bank officials believe that the current program of monetary stimulus may have some undesirable consequences for financial markets. In particular, it could harm bond markets and lead to potential bubbles, which could potentially be harmful over the longer term.

Monetary stimulus has boosted stocks to record highs and pushed the yen lower. Both these effects have proved beneficial to the economy in the short term. However, the BoJ’s measure of inflation declined to zero in February. This has led to fears that financial market distortions may arise even before the inflation target is achieved.

Risks of Delaying Additional Stimulus

On the other side of the debate are calls for further additional stimulus. Some market watchers believe that equity market gains have been the only perceptible positives for the economy. Excluding this stock surge, there is little Prime Minister Shinzo Abe can show as tangible results of his stimulus measures.

Some of the original proponents of Abenomics believe that the central bank should not delay additional stimulus for too long. They point to weak consumer spending and the reluctance of large manufacturers to increase investment. This could soon lead to deflationary tendencies, they believe.

Kuroda Resilient

The central bank’s governor Haruhiko Kuroda dismissed the proposal to reduce the size of monetary stimulus. Speaking at a news conference, he said that since price stability had not been achieved, such reductions were unlikely at this time.

At the same time, Kuroda said he believes that monetary easing has been effective. Emphasizing the reduction in the gap between supply and demand, he also spoke about the increase in nominal wages and improving inflation expectations. He also said that once the oil price situation stabilizes, Japan will achieve its inflation target. Further, he denied that a stock market bubble was building up, attributing such gains to strong earnings.

Despite calls for further monetary easing, Kuroda denied that further action in this direction was on the anvil. He believed that last October’s concerns had been addressed. This was when stimulus was increased over deflationary concerns, following the slump in oil prices.

Our Choices

Despite some element of risk, Japanese markets continue to make steady gains. Below we present three stocks which will gain from these trends, each of which also has a good Zacks Rank.

Mitsubishi UFJ Financial Group, Inc. (MTU-Free Report) is the world’s largest bank-holding company with ¥279.2 trillion in total assets as of Dec 31, 2014. The company trades on the Tokyo, Osaka, New York, and Nagoya stock exchanges.

Mitsubishi UFJ Financial holds a Zacks Rank #2 (Buy). The forward price-to-earnings ratio (P/E) for the current financial year (F1) is 10.11. The consensus estimate for the current year has increased from 61 cents to 69 cents over the last 60 days.

Kyocera Corp. (KYO-Free Report) is a manufacturer and distributor of industrial components as well as telecom and IT equipment across the world.

Apart from a Zacks Rank #1 (Strong Buy), Kyocera has a P/E (F1) of 23.40x. The consensus estimate for the current year has increased from $2.06 to $2.22 over the last 60 days.

The central bank governor’s confidence in current policy measures may yet bear fruit. At the same time, further stimulus over the next few months cannot be ruled out. This is why these stocks would make for a prudent choice.

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