Fossil, Washington Federal, McDonald, Abercrombie & Fitch and ADP

CHICAGO--([ BUSINESS WIRE ])--[ Zacks Equity Research ] highlights: Fossil Inc. (Nasdaq: [ FOSL ]) as the Bull of the Day and Washington Federal (Nasdaq: [ WFSL ]) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on McDonald (NYSE: [ MCD ]), Abercrombie & Fitch (NYSE: [ ANF ]) and ADP (NYSE: [ ADP ]).

Full analysis of all these stocks is available at [ http://at.zacks.com/?id=2678 ].

Here is a synopsis of all five stocks:

[ Bull of the Day ]:

Fossil Inc. (Nasdaq: [ FOSL ]) designs, develops, markets and distributes fashion accessories globally. Its in-house team of designers and product specialists enable the company to stay ahead of the emerging lifestyle and fashion trends.

In addition, the company has a vertically integrated business, which facilitates better flow of communication, consistent quality, product design protection and improved supply chain speed.

We maintain our Outperform recommendation on the stock. However, the intense competition across its various segments concerns us.

[ Bear of the Day ]:

We are downgrading our recommendation on Washington Federal (Nasdaq: [ WFSL ]) to Underperform from Neutral based on its sizable exposure to risky loan portfolios and rising costs. Fiscal fourth-quarter 2010 earnings missed the Zacks Consensus Estimate by a nickel.

Results primarily benefited from a rise in revenue and a fall in the provision for loan losses. On the other hand, a weak loan demand and an increase in operating expenses were among the negatives.

We are concerned about the company's significant exposure to real estate markets. We also believe that the ongoing soft market conditions will continue to force the company to aggressively write down problem assets.

Latest Posts on the Zacks [ Analyst Blog ]:

Employment Report In-Depth

The employment rate for men ticked down to 66.4% from 66.7% in October, and was 66.7% a year ago. Thus the employment situation for adult men is arguably worse now than it was a year ago.

For women, the unemployment rate rose to 8.4% in October, up from 8.1% in October and 8.0% a year ago. The participation rate was 60.2%, unchanged from October and the employment rate was also unchanged at 55.3%. A year ago they were at 60.4% and 53.7%, respectively.

In the overall big picture, men have fared far worse than women in this downturn. There are two possible reasons for that. The first is that the industries that have been particularly hard hit in this downturn tend to be far more male dominated than the industries that have skated though this recession more or less unscathed. The most glaring example of this would be the construction industry versus the health care industry (more on the industry breakdowns below).

The second explanation is that on average, women tend to still be paid far less than men do, and employers might be more prone to let their relatively high priced male employees go first before their cheaper female employees. The industry effect is probably the bigger one, but the two are not mutually exclusive and both might be playing a role.

Teens, regardless of gender have had a very hard time of it in this recession. However, an improved teen unemployment rate is one of the few bright spots in this report. Just go to a McDonald's (NYSE: [ MCD ]) and you will see this for yourself. Normally the blemishes you see on the cashier's face is acne, not wrinkles and age spots as is the case now.

In October, the teen unemployment rate fell to 24.6% from 27.1% in October and it is down from 26.8% a year ago. Some, but not all, of that improvement is an illusion from a falling participation rate, which dropped to 34.6% from 35.2% in October, and 35.8% a year ago. The percentage of teens that actually have a job was just 26.1%, up from 25.6% in October but down from 26.2% a year ago.

While for the most part the earnings from teen jobs tend to go towards clothes from Abercrombie & Fitch (NYSE: [ ANF ]) and other teen clothing stores, for many it is a significant part of paying for college. Also, when teens work, they learn important job skills, such as the importance of actually showing up, and doing so on time. The extremely low levels of teens working is not a good sign for the future.

Where the Jobs Are (And Are Not)

The private sector actually added more than the total number of jobs this month. State and local governments laid off 13,000 workers, and have trimmed their payrolls by 280,000 over the last year. In looking at the effectiveness of the stimulus program from the Federal government, one should keep in mind the massive anti-stimulus effect of budget cuts and tax increases (mostly budget cuts) at the state and local levels of government.

The private sector added 39,000 jobs, way down from an addition of 160,000 jobs in September (revised up from a gain of 159,000), and from the 121,000 jobs it added in September (revised up from a gain of 107,000 jobs). A year ago, the private sector shed 75,000 jobs in November. This is the eleventh straight month that the private sector has added jobs, but the pace has not been high enough to keep pace with the growth in the population.

Within the private sector, the goods producing sector lost 15,000 jobs. The construction industry lost 5,000 jobs, after gaining 3,000 jobs in October. The construction industry has been particularly hard hit in this downturn, accounting for about 25% of all the jobs lost, even though at the start of the recession it accounted for less than 6% of the total jobs in the country.

As these jobs generally do not require a lot of formal education, the demolition of construction helps explain why the unemployment situation is so dire for those who never went to college. As a male-dominated industry, it also helps explain why this recession has been so much tougher on men than it has been on women.

Employment in construction peaked before the rest of the economy, in April 2006. Since then we have lost 2.109 million construction jobs. Most of the decline, though, happened after the overall private sector jobs peaked in December 2007, and since then Construction jobs are down by 1.876 million, or 25.0%.

Since the peak, overall private sector employment is down by 7.296 million. In other words, this one industry is directly responsible for 26% of all job losses since the end of 2007.

Manufacturing lost 13,000 jobs, on top of the 11,000 jobs lost last month, making it the fourth month in a row of manufacturing job losses after a nice string of increases. These numbers contradict what ADP (NYSE: [ ADP ]) said on Wednesday, and the ISM manufacturing survey where the employment sub-index has been consistently been pointing to an expansion in factory jobs for many months now.

The service sector just 65,000 jobs in the month, down from an increase of 157,000 in October (revised from a gain of 154,000) and a gain of 122,000 in September (revised from 111,000. A year ago the Service sector added 108,000 jobs. One of the biggest contributors to service sector jobs, as always, was the health care industry which added 30,000 jobs.

The health care industry has not had a single down month in terms of employment in the entire downturn. The health care industry has a far higher proportion of women working in it than does the economy as a whole, and this is a big part of the reason that the unemployment rate for women is so much lower than that for men.

Get the full analysis of all these stocks by going to [ http://at.zacks.com/?id=2649 ].

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Fossil, Washington Federal, McDonald, Abercrombie & Fitch and ADP