Tuesday - June 28, 2005
 Want to view the archive of past issues? Go to: http://at.zacks.com/?id=1344. Get Profit from the Pros content in Real-time. Learn more about this free tool at: http://at.zacks.com/?id=1452. Manage Profit from the Pros subscription: 1. FEATURED EXPERTS Here we cast the spotlight on a timely Featured Expert commentary that recently appeared on Zacks.com. Following the article you will find previews of other profitable commentaries with insights and recommendations from leading investment experts.
Crude oil prices are once again the focus of much talk on Wall Street. The Organization of Petroleum Exporting Countries (OPEC -- the oil cartel) met two weeks ago in Vienna and decided to hike production by 500,000 barrels per day. The group also authorized an additional 500,000 barrel per day hike between now and the September meeting if oil prices remain above $50. However, in interviews after the meeting, several ministers mentioned that these hikes are largely symbolic -- OPEC is already producing well above its official quota. And despite the stated hikes, many have argued that supply isn't really increasing. Not surprisingly then, crude oil prices held strong despite the stated production hikes. In fact, a little over a week ago, crude closed at a fresh all-time high of over $58 per barrel. That's a far cry from the roughly $46/barrel prices we witnessed a little more than a month ago. While the market didn't react all that negatively to the news, oil prices remain a long-term concern for the U.S. economy. And looking at the shorter term, retail sales at several lower-end retailers have softened in recent weeks. While it's too early to know for sure, higher gasoline prices do tend to hit lower-end consumers first. As such, weakening retail sales may well be the first sign of that problem. More. . .
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Outside the oil market, currency rates have also been a focus of much attention lately. The recent vote out of France -- which rejected the EU constitution -- has put the euro at risk. As a result, traders are now questioning whether the currency can really be seen as a safe-haven alternative to the dollar. Of course, when the dollar strengthens, this tends to weaken the competitiveness of U.S. exports -- this may be behind some of the weakening in trade data of late. This has also been cited as a major concern for the market over the next few months. Business Overview The company's fleet consists of 27 "product carrier" ships -- vessels designed to haul refined petroleum products like gasoline and kerosene. The other 15 ships -- known as "Suezmax" carriers -- are designed to transport crude oil from production sites to refineries for processing. Strong demand for the transportation of crude oil and refined petroleum products should fuel OMI’s growth for years to come. Demand for crude oil has been extremely high over the past few years, thanks in large part to the fact that Asia has moved from a net exporter of oil a little over a decade ago to a major net importer. Fast-growing economies, most notably China, have been rapidly ramping up their purchases of oil to keep pace with domestic demand. All that demand for imports has led to strong demand for oil transportation to key markets like China and the U.S. As a result, shipping rates increased four-fold from the beginning of 2003 to the end of 2004. Turning attention to the supply side, keep in mind that it takes several years to build new ships and to bring new shipping capacity online. Therefore, supply can only slowly adjust to strong demand in this market. This tight supply environment should lead to continued high pricing for tanker companies over the next few years. And for a company like OMI, which faces relatively low capital spending requirements during that time period, that higher pricing will drop straight to the bottom line. The StreetAuthority Market Advisor is an invaluable resource for self-directed investors. With a keen focus on fundamental analysis and an eye for undervalued stocks, editor Paul Tracy sorts through thousands of investing opportunities each week and brings you only those with the greatest potential for both near- and long-term gains. Rather than the news, the Market Advisor delivers profitable investment guidance that you can act on today to improve your own portfolio. http://at.zacks.com/?id=1778. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - b) Time to Update the Portfolio Find out why Jim Collins says the economy is rebounding from the spring slowdown, and learn about some stock picks for the week. More... Dr. Pasternak explains that buying interest has not been sufficient to precipitate a sharp rally. Discover his long candidates. More... Martin and Ragas added another high quality and well managed company to their Long Term Growth positions. More... Dennis Slothower says the Fed is caught in a catch-22 concerning oil and a possible recession. Read his analysis. More... Gregory Spear thinks its time to give steel stocks a look and offers an attractive candidate. More... Featured Expert articles are courtesy of the 60+ leading investment newsletters that have partnered with us to create the Zacks Expert Advice service. Check out the Experts section of Zacks.com daily to find profitable stock picks and timely market commentary at: http://at.zacks.com/?id=1340.
2. BEST OF ZACKS EQUITY RESEARCH Zacks.com offers three unique weekly commentaries that all further
our mission to help you Profit from the Pros. Today's
commentary is the Earnings & Sector Update from Nick Raich,
Director of Research for Zacks. His weekly article explores
the important trends in recent and upcoming earnings data. This
report is a must for any investor seeking to buy into the
hottest industry sectors and avoid those out of favor. See
the full report at: http://at.zacks.com/?id=1363. Earnings & Sector Update With first quarter 2005 earnings season over, investor focus has shifted to economic data and earnings guidance. We continue to believe the second quarter 2005 consensus earnings growth figure of 9% for the S&P 500 is too low. Our best estimate is for second quarter 2005 earnings growth of 12-14% for the S&P 500. We base this view on the solid past earnings momentum and the relatively positive guidance we have seen since companies announced first quarter results. Roughly one company has raised guidance for every company lowering it over the past two months. Typically, this ratio runs at three companies warning for every company raising guidance. We caution there will certainly be more companies preannouncing in the upcoming days. Investors should closely monitor the guidance. We certainly will. In our view, no news will be good news. But, if we start to see a negative trend of earnings warnings, it could change our current view on earnings and the market. In addition, as oil trades at over $60 a barrel, companies outside of the energy sector may be reluctant to raise earnings guidance after releasing second quarter results. If this occurs, we believe there could be downward pressure on stocks as inflation worries may resurface. The Materials, Energy, and Industrials sectors had the best earnings growth in the first quarter. Once again, these three sectors should show the highest year-over-year gains in earnings during the second quarter of 2005. Current expectations are for each sector to see over 20% earnings growth. The earnings laggards for the second quarter are expected to be Consumer Discretionary and Staples, with earnings growth projected to be in the low single digits for each sector. More at: http://at.zacks.com/?id=1363. Table of Contents for Rest of the Report
Read this weeks' full report at: http://at.zacks.com/?id=1363. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - BULL OF THE DAY EnCana Corp. (ECA) - Exceptional Growth Prospects. For full Zacks research report, click here. Sony (SNE) - Limited New-Market Presence. For full Zacks research report, click here. Telecom Industry Focus is on Convergence Proceed with Caution into Computer Hardware
3. PROFIT TRACKS Zacks.com is proud to share with you some of the best trading
strategies that truly allow you to Profit from the Pros. Today
we highlight... Profit Tracks: Earnings and Margins This Profit Track goes to the heart of fundamental investing by finding companies with healthy earnings. The main ingredients are the search for Earnings Growth and Net Profit Margins. Then for good measure we make sure earnings estimates are moving higher which is a strong indicator of future performance and that brokerage firms are positively rating the stock. Earnings are the single most important metric for a company. Combine that with a healthy Net Profit Margin and you find a screen that has generated a return of +362% in the last 4+ years compared to -4.8% for the S&P 500. Here are four stocks that make the grade for the Earnings and Margins Profit Track. Allied Healthcare International, Inc. (NASDAQ: AHCI) announced fiscal second-quarter earnings of 11 cents per share in early May, surpassing the consensus estimate by about 10% and exceeding last year’s seven cents. Revenues climbed 13.3% to $90.8 million from last year’s $80.2 million. In addition to having a successful quarter, the earnings for company’s most recently completed year grew almost 18% above the year prior. Continue your research on AHCI at: http://at.zacks.com/?id=1996. Image Sensing Systems, Inc. (NASDAQ: ISNS) is a profitable company as demonstrated by its net margin of 81%. In late April, the company reported first-quarter earnings of 10 cents per share, improving on last year’s nine cents. ISNS mentioned that this is the 12th consecutive quarter with net income exceeding the previous year’s result. The company also stated that first quarter growth in earnings reflects continued solid performance in the North American market. Growth seems to be theme with ISNS as it sported about 20% growth in earnings last year when compared to the year prior. Continue your research on ISNS at: http://at.zacks.com/?id=1997. Thomas & Betts Corp. (NYSE: TNB), a leading manufacturer of connectors and components for worldwide electrical and electronics markets, released its first-quarter report in late April. Earnings per share of 40 cents outpaced last year’s first-quarter earnings of 27 cents and topped the consensus estimate by approximately 14%. The company noted that first quarter results reflect improved year-over-year performance in all of its segments. Continue your research on TNB at: http://at.zacks.com/?id=1998. UICI (NYSE: UCI), a Zacks #1 Rank (Strong Buy) stock, grew an impressive 142% last year over the previous year. In late April, the company posted first-quarter earnings of $1.11, eclipsing last year’s 68 cents and jumping ahead of the consensus estimate by almost 41%. Revenues grew from last year’s first quarter of $494.7 million to $536.0 million. UCI said that first quarter results from continuing operations benefited from the strong performance of its Self-Employed Agency ("SEA") Division and improved results at its other business units. Continue your research on UCI at: http://at.zacks.com/?id=2016. To see the full list of stocks that currently pass this winning screen, go to: http://at.zacks.com/?id=1999. All the Profit Track strategies were created and backtested using the Research Wizard software from Zacks Investment Research. If you like this screening strategy, but want to narrow down the list of stocks and even improve the performance, then you should start a free trial to this powerful stock picking tool. Learn more about the Research Wizard free trial offer and our new special report “Top 10 Stock Screening Strategies” at: http://at.zacks.com/?id=1993. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Kevin Matras combines short-term and long-term Historical Earnings Growth with Earnings Estimate Revisions for a winning stock picking strategy: http://at.zacks.com/?id=1474.
4. OPTIONS CENTER Zacks has partnered with the leading options experts,
Schaeffer's Investment Research, to provide you the best options
commentary, research, and trading tools on the market today. Read below more on Schaeffers Tools to Profit with Options. Read below more on Schaeffers Tools to Profit with Options. One of my favorite filters to use is the Put/Call Ratio Over 1.0 (Bullish). In my opinion, it gives you a quick and easy list of potentially bullish plays without doing much work at all. Come on, that's the point of the filters on this page, to make it easier for you the investor to make some money without having to do all of the hours of hard work. I will now explain this filter some, show why it is useful, and follow that up with an actual pick using the filter. What I especially like about this filter is you have the option to then sort the list by the Schaeffer’s Put/Call Open Interest Ratio (SOIR) from highest to lowest. I’ll explain what this means next. Taking a step back, the SOIR is simply the number of bearish puts divided by the number of bullish calls in near-term options. With that, to see a number of 1.0 or greater means that there are more bearish puts than bullish calls among short-term traders. From our contrarians-based approach, we love to see a huge number of puts compared with calls in a strong performing stock. The reason is, if a stock can advance amid bearish sentiment, then that means there is still plenty of money left on the sidelines to push the stock up more once that crowd begins to turn bullish. Now getting back to the filtered list of SOIRs over 1.0 from highest to lowest, just because it has a high SOIR doesn't mean it is a good play to the long side. Remember, we want to see the bearish puts and outperformance. But following a SOIR is just one aspect of trading, as we also like to see what the analysts are saying, the media is saying, and how many bearish short positions are on the stock. If you can find a trade that encompasses all of those areas of sentiment, then my friends, you could have a good winner on your hands. Let's now get back to the filter and try to find a money making idea. One name that stands out is home builder Beazer Homes USA (BZH). This is one that we've played a few times in the past and had some success. Over the past year few industries have had as much negative sentiment as housing stocks have. All you seem to hear is how there is a housing bubble and homebuilders are about to come crashing down. Well, according to our contrarian point of view we like to see high levels of skepticism toward strong technical performers as a sign that there is still money left on the sidelines. Add it up and homebuilders fit this bill perfectly and for that reason we have been bullish on this sector over this time. BZH has a SOIR of 3.09, which is one of the higher numbers on the filter. We get this number by dividing near-term puts (77,869) by near-term calls (25,170). Now for the fun part, the shares have gained over 73% the past 12 months, yet short-term option players continue to pile on the bearish puts. In fact, the firm's SOIR is higher than 91% of the readings over the past year. Again this shows that the short-term options crowd is heavily betting against BZH here. Let's take a look at some other areas of sentiment that we track first, before we go out and load up on BZH. The surer we are about the sentiment being negative amid strong price action, then the better the odds are that the trade will work. Two quick and easy things I like to look to figure this out are the shorts and the analysts. To short a stock means you are selling it first, with the intention of buying it back later. In other words, you are betting the shares will go down. We love to see lots of shorts betting against a stock, because that means should the shares continue to advance all of those bearish bets will be forced to cover (or buy back) their bearish bets and that will push the shares up that much quicker. Turning back to BZH we find that over 25% of the float is sold short, more than enough to spark a short covering rally on any good news. Now for the analysts. If they are bearish on a stock that is a top performer this is actually good, because it means the shares should benefit from any positive upgrades. As you might have expected, BZH has only two "buys" out of seven total recommendations. Any upgrades from this bearish bunch should really help out the shares. So there you go. In just a few minutes using the filter and checking on a few other sentiment-based aspects we have a nice bullish play. For fun let's hypothetically say that we buy the BZH November 50 call for $8.00 (this is where it was trading on Friday afternoon). Write this one down to see how it does, but I must say that it does look like a nice risk reward play. Please continue to use all of the filters on these pages for more money making ideas and don't be afraid to paper trade a few to see what strategy works best for you. But please remember that when it comes to options, the majority of your trades are going to be losers and not to get discouraged. Because that's the beauty of the leverage that they provide, it only takes a few winners out of every 10 trades to make you a very happy person. Good luck! To learn more about the Put/Call Ratio over 1.0 (Bullish) filter, click here. a) Aiming Toward Higher Ground Jeff Carter believes that stocks will eventually break out into higher ground. More... Discover all the tools and commentary available from the Zacks.com Options Center at: http://at.zacks.com/?id=614. OTHER TOOLS FROM ZACKS At the heart of Zacks Investment Research is the Zacks Rank investment philosophy that continues to vastly outperform the market. Our Zacks #1 Ranked (Strong Buys) have produced the following results for investors:
And just as importantly, the Zacks #5 Rank stocks (Strong Sell) List has alerted investors as to which stocks to dump from Their portfolios to avoid unnecessary losses. To truly take advantage of the Zacks Rank, you need to first understand how it works. That's why we created the free special report: Zacks Rank Guide: Harnessing the Power of Earnings Estimate Revisions. Download a free copy now to prosper in the years to come by visiting: http://at.zacks.com/?id=1346. Or view the full list of Zacks #1 Ranked stocks at: http://at.zacks.com/?id=1353. FREE PORTFOLIO TRACKER Do you believe that these events affect stock prices?
If you answered yes, then how are you staying on top of these changes for your stocks? If you are one of the 45,000 investors who wake up every morning to the Daily Portfolio Updates emails from Zacks.com, then you are all set. If not, then sign up now to get this vital information sent to you daily and improve your portfolio's performance. Did we mention it's free? Get started now by going to: http://at.zacks.com/?id=1674 We hope you enjoyed this issue of "Profit from the Pros", And we look forward to visiting with you again next week. REFER-A-FRIEND If you enjoy this e-mail newsletter, then please pass it along to a friend. Simply forward them the link below to sign up for their own free subscription. If you're reading a forwarded copy, sign up for your own, so you get this wealth of information every week. Just click here. THANKS! Regards and Happy Investing, Stephen Reitmeister p.s. What is the mission for Zacks Profit from the Pros? Click here to find out how we will help you become a more successful investor. *The S&P 500 Index is a well-known, unmanaged index of the prices of 500 large-company common stocks, mainly blue-chip stocks, selected by Standard & Poor's. The S&P 500 Index assumes reinvestment of dividends but does not reflect advisory fees. An investor cannot invest directly in an index. Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security. To contact us by mail: Zacks Investment Research To unsubscribe from receiving "Profit from the Pros" e-mail newsletter, click here. | ||||||||||
- Latest News
- Most Popular
- 3 Top-Ranked Consumer ETFs to Buy Now
- This Week's Top Value Stocks
- RTI: When Will We Finally See a Pullback?
- RTI: When is the Fed's "Taper Telegraph" Coming?
- Insurance Industry Stock Outlook - May 2013
- Top Stocks with Big Potential Catch-Up Moves
- Roundtable Top Picks of the Week
- Anatomy of Success: Green Mountain Coffee
- The Mega-Rally Rolls On
- Biotechnology ETF Investing 101
- AWS 5/21: The Beginning of the End for QE
Recent Quotes
| No Recent Quote currently available |
My Portfolio
|
My Portfolio Tracker One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts. Set yours up today. |
Zacks #1 Stocks on the Move 05/21/2013
| Company Name | Symbol | %Change |
|---|---|---|
| SCIENTIFIC L | SCIL | 8.00% |
| NATUS MEDICA | BABY | 6.11% |
| SUMMER INFAN | SUMR | 6.02% |
| RADIANT LOGI | RLGT | 5.32% |
| NEW ORIENTAL | EDU | 4.51% |
Quick Links
Resources
Client Support
Zacks Research is Reported On:
Zacks Investment Research
is an A+ Rated BBB
Accredited Business.
Copyright 2013 Zacks Investment Research
At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. Since 1986 it has nearly tripled the S&P 500 with an average gain of +26% per year. These returns cover a period from 1986-2011 and were examined and attested by Baker Tilly, an independent accounting firm.
Visit performance for information about the performance numbers displayed above.
NYSE and AMEX data is at least 20 minutes delayed. NASDAQ data is at least 15 minutes delayed.