For Immediate Release

Chicago, IL – October 01, 2014 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Apple (AAPL-Free Report), China Mobile (CHL-Free Report), Primero Mining Corp. (PPP-Free Report), Harmony Gold Mining Company Ltd. (HMY-Free Report) and Gold Fields Ltd. (GFI-Free Report).

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

Here are highlights from Tuesday’s Analyst Blog:

Apple Set to Launch iPhones in China

Apple (AAPL-Free Report) will start selling iPhone 6 and 6 plus in China from Oct 17. The company recently received regulatory approval from The Ministry of Industry and Information Technology (:MIIT). MIIT inspects new smartphones before allowing them on Chinese carrier networks.

Last year, Apple shipped iPhone 5S and 5C simultaneously to China along with the United States. However, this time user security and privacy issues delayed the devices in getting the required regulatory approval. Per MIIT, Apple has agreed to improve user security by eliminating risks related to three diagnostic tools in the iOS 8.

The strict scrutiny of Apple’s two devices reflects Chinese government’s growing concern over the security features offered by the U.S.-based companies post the Edward Snowden incident. In July, state-controlled CCTV alleged the iOS 7’s “Frequent Locations” feature could be used to secretly track user’s locations.

However, Apple dismissed the claims stating that it does not have access to phones using the aforesaid feature. It was also rumored that the Chinese government has banned the usage of Apple devices due to security concerns. However, both Apple and the Chinese government have declined any such development.

The new iPhones will be available for pre-order from Oct 10. The 16 GB iPhone 6 will be priced at 5,288 yuan (approximately $860) and the 16 GB iPhone 6 plus at 6,088 yuan. However, reduced subsidy from state-owned carriers like China Mobile (CHL-Free Report) will be a concern.

The Chinese government has asked these carriers to control marketing expenses. Per Bloomberg, these carriers will cut spending on subsidies and advertising by a combined 40 billion yuan ($6.4 billion) over the next three years.

Since its partnership with China Mobile, Apple has experienced strong growth in the country. Greater China revenues grew 28% year over year in the third quarter of 2014. Most importantly, iPhone sales jumped 48% from the year-ago quarter.

However, we believe that reduced subsidy will make the iPhones much more premium for Chinese users amid a plethora of low-cost smartphones from Xiaomi Corp, Huawei and Lenovo. Samsung’s recently launched Galaxy Note 4 will further intensify competition for Apple in the near term.

Nevertheless, we believe that pent-up demand for the all-new iPhones will be the key growth catalyst for Apple over the next 12 months. China is Apple’s fastest growing market and we believe that the company will not easily relinquish its increasing market share in the country. Although pricing will be a factor, the bigger size iPhone 6 plus can eventually make a difference in China, in our view.

Currently, Apple has a Zacks Rank #2 (Buy).

3 Gold Mining Stocks to Dump

In 2014, gold had a steady start and the prices rose through much of the year, fueled by geopolitical tensions. However, of late, prices have fallen due to a stronger dollar. Moreover, demand in its top markets – China and India -- has been subdued.

Let us a take a closer look at the movement in gold prices in the year so far and where they are heading.

Q1: Gold started 2014 at $1,202 per ounce and showed an upward trend since, buoyed by the growing demand for jewelry in China due to the Lunar New Year. In mid-March, gold attained a six-month high of $1,379 per ounce, stoked by Ukraine worries, fears of a slowdown in China and weak U.S. economic data that drove investors to take refuge to bullion as a safe haven. However, the bubble soon burst as gold prices fell below $1,300 per ounce at March end, on stronger-than-expected U.S. economic data.

Q2: Gold prices remained on either side of $1,300 before plunging to $1,244 per ounce in the first week of June on positive U.S. economic indicators and lower demand in China as well as India in contrast to the record levels last year. On Jul 10, mounting tensions over Ukraine and Gaza sent gold prices to a 3 month high of $1,339.

Through July, prices remained above $1,300 an ounce but at month end, prices dropped as the US economy posted strong numbers. In early August, gold price steadied with the effects of economic data and geopolitical developments appearing to counterbalance each other.

Q3: In September, prices remained steadfastly under the $1300 range, eventually dipping to a 2014 low of $1,215 on Sep 19 on the back of a strong dollar. News of U.S.-led air strikes in Syria lifted gold price from these levels. As the dollar rose to four-year highs, gold prices fell to a nine-month low of $1,207 per ounce on Sep 25.

Gold rebounded sharply from the nine-month low to $1,222 per ounce when global equity markets fell sharply as the stronger dollar pointed to potential earnings losses, prompting investors to purchase bullion. Gold has again fallen from these levels and closed at $1,216 on Sep 30.

Gold prices are likely to drop even further as the US dollar continues to strengthen. Further, persistent economic recovery may prompt the Federal Reserve to raise interest rates sooner than expected. The waning of geopolitical tensions will also weigh on gold prices. However, advent of the festive and wedding season in India is expected to spruce up demand in one of the biggest markets for gold.

In line with the recent movements in gold prices, we suggest three gold-mining stocks to steer clear from at the moment. We have screened gold mining stocks that either have a Zacks Rank #4 (Sell) or a Zacks Rank #5 (Strong Sell) and have witnessed downward estimate revisions over the past few weeks. These stocks are also expensive than their peers despite delivering negative year-to-date returns.

Primero Mining Corp. (PPP-Free Report)

Primero Mining is engaged in the acquisition, exploration, development and production of precious metal properties in Canada and Mexico. The company explores for gold and silver. It owns interest in the San Dimas Mine, which is located in Mexico’s San Dimas district; and the Black Fox Complex that is located in the Timmins Mining District in Ontario, Canada.

Primero Mining currently carries a Zacks Rank #5 (Strong Sell). This Vancouver, Canada-based precious metals producer is currently trading at a forward P/E of 254.5, a significant premium to the industry average of 21.2. The stock has delivered a negative one-year return of 5.21%.

The company also holds a negative earnings growth estimate of 94.44% for 2014 and an average negative earnings surprise of 66.67% in the past four quarters. Moreover, The Zacks Consensus estimate has undergone negative revisions over the past 60 days.

Harmony Gold Mining Company Ltd. (HMY-Free Report)

Based in Randfontein, South Africa., Harmony Gold Mining is engaged in the exploration and mining of gold in South Africa and Papua New Guinea.

Harmony Gold currently carries a Zacks Rank #5 (Strong Sell). The company holds a negative growth estimate for earnings of 33.33% for fiscal 2015. Harmony Gold is currently trading at a P/E of 112.0, at a significant premium to the industry average of 26.28. The stock hit a 52-week low of $2.26 on Sep 26 and has delivered a negative one-year return of 4.7%. The Zacks Consensus estimate for the company has undergone negative revision over the past 60 days.

Gold Fields Ltd. (GFI-Free Report)

Based in Sandton, South Africa, Gold Fields Limited is engaged in the acquisition, exploration, development, and production of gold properties. It also explores for copper.

Gold Fields currently carries a Zacks Rank #4 (Sell). The stock is currently trading at a forward P/E of 30.62, at a premium to the industry average of 27.95. The stock has delivered a negative one-year return of 13.0%. The Zacks Consensus estimate has gone down over the past 60 days.

Bottom Line

Exiting certain underperformers at the right time helps maximize portfolio returns. With uncertainty in gold prices and prospects of a stronger dollar, we believe it will be a prudent move to get rid of these stocks at the moment.

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

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