Knight Capital Group, Inc.

Highlighted stocks include Knight Capital Group Inc. (NITE - Snapshot Report), DXP Enterprises, Inc. (DXPE - Snapshot Report), Genesco Inc. (GCO - Snapshot Report), Omnicare, Inc. (OCR - Snapshot Report), and Ladish Company (LDSH - Analyst Report).

---

Knight Capital Group, Inc. (NITE - Snapshot Report) reported third-quarter earnings on Oct 22 that topped Wall Street estimates by 66.67%.

Knight Capital Group offers financial services to global clients in two segments: Global Markets and Asset Management.

Its Global Markets segment provides market access and trade execution services in U.S. equities, international securities, futures, options, foreign exchange and fixed income to more than 1700 buy-side firms.

In the Asset Management segment, Knight owns a 51% stake in international hedge fund Deephaven Holdings. Deephaven Partners controls the other 49%.

Knight reported a solid third-quarter 2008 with strong revenues in the global markets segment. Global market revenues rose 40% to $269 million from $151.2 million in the year-ago period.

The company increased trade capacity to 20 million trades per day. The equity trade volumes were robust due to liquidity across the market and efficiency in its trading technology infrastructure.

Net trading revenues surged 103% to $116.8 million.

Given the volatility in the stock market, particularly among hedge funds, it is not surprising that the Asset Management segment struggled in the quarter, posting a pre-tax loss of $7.7 million. Knight Capital said Deephaven has significant redemption risk and will continue to consider all alternatives to protect its investors.

Consensus Estimates Rise

Given the strong third-quarter report in the global markets segment, covering analysts have been raising estimates for both the fourth quarter and the full year. Fourth-quarter estimates are up 7 cents to 35 cents in the last 30 days.

Full year estimates jumped 18% to $1.38 from $1.17 over the last month.

Value Fundamentals

Knight Capital Group was a Zacks #1 Rank (Strong Buy) when we reviewed it on June 13 but is now a Zacks #2 Rank (Buy) stock.

NITE is now trading at 10.2x forward earnings. Its price-to-book is 1.44. The company also has a stellar 5-year return on equity (ROE) to 15.67%.

Read the June 13 analysis.

Update to Previous Value Zacks Rank Buy Stocks

DXP Enterprises, Inc. (DXPE - Snapshot Report), the pumping systems distributor, saw sales jump 13.5% from a year ago as demand remained strong from oil and natural gas producers. DXPE has surprised on estimates 3 out of the last 4 quarters by an average of 3.99%. The company is cheap with a forward P/E of 6.3. Read the Nov 4 analysis.

Genesco, Inc. (GCO - Snapshot Report), the footwear, headwear and accessories retailer, is bucking the retail gloom as sales remain robust. The company raised full year guidance in August. GCO is trading at 9.6x forward earnings. Read the Nov 5 analysis.

Omnicare Inc. (OCR - Snapshot Report), which provides pharmacy services to the elderly, raised full-year guidance after a strong third-quarter. OCR has surprised on estimates 4 consecutive quarters by an average of 14.73%. Omnicare has a forward P/E of 11.89. Read the Nov 6 analysis.

Ladish Company (LDSH - Analyst Report), the metals component manufacturer, grew sales 15% in the third quarter as demand remained strong from the aerospace sector. The company has surprised on estimates 2 out of the last 4 quarters by an average of 3.84%. Ladish is cheap. Its forward P/E is only 6.3. Read the Nov 7 analysis.