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Zacks Investment Ideas feature highlights: Bridger Aerospace, The Cato Corporation and Rocky Mountain Chocolate Factory
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For Immediate Release
Chicago, IL – August 1, 2024 – Today, Zacks Investment Ideas feature highlights Bridger Aerospace Group Holdings, Inc. (BAER - Free Report) , The Cato Corporation (CATO - Free Report) and Rocky Mountain Chocolate Factory, Inc. (RMCF - Free Report) .
3 Microcaps Impacted by 3 Unique Events
Some investors prefer short-term trading, focusing more on the next quarter vs a typical 12–18-month investment horizon which allows more time for the investment thesis to unfold. Such investors often focus on exogenous events which may positively or negatively impact company financials in the short-term.
Some companies may benefit while others may suffer negatively from the same event. Short-term traders try to speculate as to how much these events are factored into the current share price as well as estimating the possible duration of the event.
Here we highlight three current events with potential material impacts on 3 microcaps in the Zacks coverage universe. The first event is the raging wildfire in California which has become the 5th largest in state history covering an estimated 383,619 acres.
The second event involves shipping canals, the Panama and Suez. While drought conditions are expected to improve and shipping has begun to rebound, the effect on lead times and shipping costs from the drought in Panama may linger in the short-term. Additionally, attacks on Red Sea vessels may continue to have a similar effect on goods traveling through the Suez Canal, which are typically being diverted to the longer Cape of Good Hope route.
Lastly, we note the meteoric rise in cocoa prices, which have been abating somewhat lately but still remain highly elevated, as the graph below depicts. The price volatility has been caused by a drought in West Africa which is the primary supplier of cocoa beans.
The following three microcaps under Zacks coverage have some exposure to these events.
Bridger Aerospace Group Holdings, Inc. provides various aerial wildfire services to both Federal and local agencies via a fleet of 18 planes. Operating performance can be choppy based on the severity of wildfire season but Bridger Aerospace is guiding for 2024 adj. EBITDA of $35m-$51M on revenue of $70-$86 m. Please note that BAER has about $200 m of debt. Zacks currently has a Neutral rating.
The Cato Corporation is a specialty fashion apparel and accessories retailer with a geographic focus on the Southeastern US. The majority of its merchandise is imported from SE Asia and flows through either the Panama Canal or Suez Canal. The Cato Corporations employs the weighted-average cost method for valuing inventory. Zacks currently has a Neutral rating for CATO.
Rocky Mountain Chocolate Factory, Inc. produces and sells chocolate candies and other confectionery products using a store franchise and licensing model. The company reported a negative Gross profit in the last quarter due to higher raw material costs, including cocoa, as well as higher labor costs. However, Rocky Mountain Chocolate Factory expects to be near adj. EBITDA break-even by the end of FY25. Zacks currently has an Underperform rating for RMCF.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Zacks Investment Ideas feature highlights: Bridger Aerospace, The Cato Corporation and Rocky Mountain Chocolate Factory
For Immediate Release
Chicago, IL – August 1, 2024 – Today, Zacks Investment Ideas feature highlights Bridger Aerospace Group Holdings, Inc. (BAER - Free Report) , The Cato Corporation (CATO - Free Report) and Rocky Mountain Chocolate Factory, Inc. (RMCF - Free Report) .
3 Microcaps Impacted by 3 Unique Events
Some investors prefer short-term trading, focusing more on the next quarter vs a typical 12–18-month investment horizon which allows more time for the investment thesis to unfold. Such investors often focus on exogenous events which may positively or negatively impact company financials in the short-term.
Some companies may benefit while others may suffer negatively from the same event. Short-term traders try to speculate as to how much these events are factored into the current share price as well as estimating the possible duration of the event.
Here we highlight three current events with potential material impacts on 3 microcaps in the Zacks coverage universe. The first event is the raging wildfire in California which has become the 5th largest in state history covering an estimated 383,619 acres.
The second event involves shipping canals, the Panama and Suez. While drought conditions are expected to improve and shipping has begun to rebound, the effect on lead times and shipping costs from the drought in Panama may linger in the short-term. Additionally, attacks on Red Sea vessels may continue to have a similar effect on goods traveling through the Suez Canal, which are typically being diverted to the longer Cape of Good Hope route.
Lastly, we note the meteoric rise in cocoa prices, which have been abating somewhat lately but still remain highly elevated, as the graph below depicts. The price volatility has been caused by a drought in West Africa which is the primary supplier of cocoa beans.
The following three microcaps under Zacks coverage have some exposure to these events.
Bridger Aerospace Group Holdings, Inc. provides various aerial wildfire services to both Federal and local agencies via a fleet of 18 planes. Operating performance can be choppy based on the severity of wildfire season but Bridger Aerospace is guiding for 2024 adj. EBITDA of $35m-$51M on revenue of $70-$86 m. Please note that BAER has about $200 m of debt. Zacks currently has a Neutral rating.
The Cato Corporation is a specialty fashion apparel and accessories retailer with a geographic focus on the Southeastern US. The majority of its merchandise is imported from SE Asia and flows through either the Panama Canal or Suez Canal. The Cato Corporations employs the weighted-average cost method for valuing inventory. Zacks currently has a Neutral rating for CATO.
Rocky Mountain Chocolate Factory, Inc. produces and sells chocolate candies and other confectionery products using a store franchise and licensing model. The company reported a negative Gross profit in the last quarter due to higher raw material costs, including cocoa, as well as higher labor costs. However, Rocky Mountain Chocolate Factory expects to be near adj. EBITDA break-even by the end of FY25. Zacks currently has an Underperform rating for RMCF.
Why Haven’t You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.
Today you can access their live picks without cost or obligation.
See Stocks Free >>
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.