Tuesday - November 29, 2005
 Want to view the archive of past issues? Go to: http://at.zacks.com/?id=2372. Manage Profit from the Pros subscription: 1. ZACKS EQUITY RESEARCH Things got a bit crazy on Friday morning. A fight broke out in a checkout aisle in Jacksonville, FL. An off-duty police officer pepper sprayed shoppers in Beaumont, TX. A woman was trampled in Cascade Township, MI. And this was just what happened at Wal-Mart (WMT) stores… The lure of discount prices brought out shoppers en masse on Black Friday, often long before the stores even opened their doors. My wife and I saw a couple camping out in front of a Best Buy (BBY) in Skokie, IL at 11:30pm on Thursday night. For those who were willing to give up sleep, deals were to be had. Computers and electronics were particularly discounted, with PCs going for below $200. Here in Chicago, Marshall Fields was giving discounts of up to 75% on clothes and jewelry to early-bird shoppers. According to the National Retail Federation, 145 million shoppers hit the aisles (both real and virtual) this past weekend. On average, consumers spent $302.81 resulting in total sales of $27.8 billion – up 21.9% from a year ago. The numbers break down as follows: 60 million shoppers on Friday, 52.8 million shoppers on Saturday, and 22 million shoppers on Sunday. Discount stores saw the most traffic, attracting 60.7% of shoppers. Department stores and specialty stores followed, attracting 47% and 41.2% of shoppers, respectively. More. . .
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - However, ShopperTrack RCT disagreed with the NRF’s assessment. The Chicago-based firm said Black Friday sales actually decreased 0.9%. Investors should note that ShopperTrack’s numbers only cover Friday, while the NRF’s numbers cover the entire weekend. VisaUSA said spending on debit and credit cards rose 11.4%, though this number partially reflects a shift from paying by check or cash. Regardless of the differences in statistics, one trend was abundantly clear – consumers were looking for discounts and retailers were willing to comply. This is a concern because lower prices crimp margins, meaning that stores have to generate a higher dollar amount in sales to achieve the same profits that could be achieved by not discounting. Whether this will happen remains to be seen. High heating bills have yet to hit most consumers. Plus the data from this past weekend is too new for brokerage analysts to have adjusted their fourth-quarter projections. The NRF, however, took the unlikely step last Tuesday of revising its forecast for holiday sales. The organization now anticipates a 6% increase in total holiday sales; it had previously predicted a 5.5% increase. What makes this revision material is that the NRF has never officially raised its forecast during the holiday season before. The above revision was one of a comparatively small number of forecasts made last week. For almost all industries, the outlook did not change materially. The average ratio of increased earnings estimates to total earnings estimates for all stocks in the Zacks Universe is 0.24 (compared to 0.28 last week) based on 2005 projected earnings. Using 2006 earnings, the ratio stands at 0.19 versus 0.22. A complete listing of the Zacks Sector Rank and Industry Rank scores is presented in the tables below. Sector Rank is calculated by averaging the Zacks Rank for all of the industries within a given sector. Industry Rank is calculated by averaging the Zacks Rank for all covered companies within a given industry. The Zacks Rank is a quantitative model that measures trends in earnings estimates revisions. Zacks Rank scores range from #1 (Strong Buy) to #5 (Strong Sell). At all times, approximately the same number of stocks are assigned a Zacks #5 Rank as are assigned a Zacks #1 Rank. The Zacks Industry Rank is available at: http://at.zacks.com/?id=2379. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - BULL OF THE DAY Manulife Financial (MFC) - Strong Earnings Growth. For full Zacks research report, click here. Dillard`s, Inc. (DDS) - Excellent Exit Point. For full Zacks research report, click here. Software Reliant on Business Spending Finishing Up the Third quarter
2. 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: Return on Equity This Profit Track strategy uses Return on Equity (ROE) to discover solid stocks. ROE is one of the quickest ways to gauge whether a company is creating assets or gobbling up investors' cash. One of the quickest ways to gauge whether a company is creating assets or gobbling up investors' cash is to look at their ROE. This fast moving Profit Track returned an impressive +30.3% in 2004. In 2005, it continues to outperform the S&P 500 by a wide margin. Brown Shoe Co.(NYSE: BWS) has a ROE of 13.10 and a price to sales ratio of .34. Last week, the company posted fiscal third-quarter adjusted earnings of $1.21 per share, beating the consensus estimate by about 22% and surpassing last year's result. The company said earnings exceeded projections, as its Famous Footwear division had a record quarter for sales and earnings supported by solid margins. Continue your research on BWS at: http://at.zacks.com/?id=2389. CommScope, Inc. (NYSE: CTV) reported third-quarter adjusted earnings of 34 cents per share in late October, surpassing the consensus estimate by almost 26% and improving on last year's result. The company commented that it managed costs effectively, achieved operating profits in all segments, including the Carrier segment, and expanded overall operating margins. CTV meets the criteria of this Profit Track with a ROE of 10.47 and a price to sales ratio of .88. Continue your research on CTV at: http://at.zacks.com/?id=2390. Giant Industries, Inc. (NYSE: GI), a petroleum refiner, has an appealing valuation as indicated by its ROE of 27.38 and a price to sales ratio of .24. In early November, the company announced third-quarter earnings of $3.38 per share, exceeding the consensus estimate by nearly 13% and soaring past the year ago total. The company mentioned that strong operating and financial performances from each of its strategic business units contributed to the overall financial results in the third quarter. Continue your research on GI at: http://at.zacks.com/?id=2391. William Lyons Homes (NYSE: WLS) sports the highest ROE of 46.30 on this Profit Track list. In early November, the company released third-quarter earnings of $4.39 per share. The result topped analysts’ expectations by roughly 39%. The company stated that it is pleased by the 27% increase in the number of net new home orders to 834 for the third quarter of 2005 as compared to 659 for the third quarter of 2004. WLS has a price to sales ratio of .58. Continue your research on WLS at: http://at.zacks.com/?id=2392. To see the full list of stocks that currently pass this winning screen, go to: http://at.zacks.com/?id=2393. 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=2394 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Kevin Matras shows you why stocks with new analyst coverage are stocks you want to have. http://at.zacks.com/?id=2395. 3. 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. Talk about an impressive rally in the stock market, huh? Nearly everyday we seem to be making new highs across the board in various groups and sectors. I’ll be the first to admit that we’re about as overbought on some of the short-term indicators as you can be, but the bottom line is just because something is overbought, doesn’t mean it has to come down – it can stay overbought as more and more people are sucked into buying. If you’ve been reading this piece over the past few weeks then you know that I started looking for a nice rally clear back in mid-October. In fact, on October 17 I said that, "This past week we've noticed a few signals beginning to surface that we are nearing rather oversold levels and the next good buying point could simply be a few weeks away." Then I followed that up with this on Nov 7, "You can't argue with the recent price action in the market. Considering October is historically known as a month that might have some big drops, it's also known for very significant bottoms. These bottoms have often lead to great rallies in November and December. So far, history is lining up perfectly. In mid-October we saw a nice bottom for the market, and now the stage is set for another strong year-end rally." So that’s all fine and dandy, but did you make any money listening to it? Well, had you bought the Medimmune January 2006 30 calls (MEQAF) that I recommended on October 17 for $4.40 a contract you’d be looking good. In fact, you could have sold that same option for at least $7.50 on Nov 18 – or a nice little 70% profit in just over a month with two more months of time premium left! Today I want to take a look back at what it was that I liked about Medimmune (MEDI) back then and hopefully you’ll notice something that might help you spot the next big winner in your portfolio. (Remember, below is from Oct 17, 2005) For a refresher of our methodology please read on, if you already know this please go to the next paragraph. We are contrarian-based investors, meaning that we want to see skepticism toward an outperformer as a sign that money is still on the sidelines. Conversely, we want to see optimism toward an underperformer. We view too much optimism as a potential sign that nearly everyone who wants to invest in a particular stock already has. Now, just because a stock sees substantial optimism doesn't mean that we will blindly short a particular security. In most cases we need to see some negative price action or a major catalyst for a downside move in order to pull the trigger. Other indicators that we tend to utilize in measuring overall sentiment include put/call ratios, short interest, magazine cover stories, media comments, and analyst ratings. Turning to the Put/Call Ratio Over 1.0 (Bullish), the Schaeffer's put/call open interest ratio (SOIR) is simply the number of puts divided by the number of calls among near-term options. That being said, a number of 1.0 or greater means that there are more puts than calls in short-term trading. From our contrarian-based approach, we love to see a huge number of puts compared to calls levied against a strong-performing stock. If a stock can advance amid heavy bearish sentiment, there is still plenty of money left on the sidelines to help push the stock higher once that crowd begins to turn bullish. Simply because a stock has a high SOIR doesn't mean it is a good long play. But using a SOIR as an indicator is just one aspect of the Expectational Analysis® approach, as we also like to check in on analysts, media, and short interest as other indicators for investor sentiment. If you can find a potential trade that encompasses all of those areas of sentiment, then my friends, you could have a potential winner on your hands. Looking at the list from Friday one name looks rather tempting to me, Medimmune (MEDI). MEDI has a SOIR of 1.66, which we find by dividing the number of short-term bearish puts by short-term bullish calls (55,912 divided by 33,640). MEDI is one of the top-performing biotech stocks out there, as the shares have gained more than 21% this calendar year. With gains like that you'd expect some type of optimism to begin to creep into the shares, you'd be wrong. I have already mentioned that MEDI's SOIR stands at 1.66. You may ask, what exactly does that mean? Well, it only tell you something if you compare it to the past year's worth of data. It turns out that this number is higher than 96% of the readings taken during the past year, suggesting that short-term option players are still very bearish on the shares. Remember we like to see this heavy skepticism in the face of strong performance. Another area of sentiment that I like to look at is what the shorts are doing. 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 a great deal of shorts betting against a stock, because that means all of those bearish bets will be forced to cover (or buy back) their bearish bets should the shares continue to advance, which could provide a nice boost to the shares. Turning back to MEDI, we find that it would take only 3.20 days to cover. This isn't a huge number (I'd prefer to see it over six or seven days), but one encouraging sign is that the shorts increased their bearish bets by more than 21% last month. This action suggests that the short sellers could still be trying to pick a top on this strong trending stock. Finally, analyst coverage. This is probably better used as a longer-term indicator, but it does give you a great idea of what Wall Street thinks of MEDI. Lo and behold, this bunch doesn't like the gains, according to Zacks there are 16 "holds" or worse out of 21 total recommendations. This configuration leaves ample room for upgrades, should the shares continue to gain. In conclusion, MEDI sports a Schaeffer's Equity Scorecard rating of 8.0 out of 10.0, suggesting more gains could be in the cards for this biotech. Should this market find a bottom over the next few weeks, MEDI looks like it could be a strong leader, let's consider buying a bullish call. As of Friday afternoon you could have bought the January 2006 30 call (MEQAF) for $4.40 a contract, that's the one I'd play. Hopefully it's a nice of a winner, as the others have been. So that you go, exactly what I said back then. Sure they all don’t work, but over the past few months I’ve shown numerous examples of how using the filters properly and you too can find numerous winning trades – without hours of research. Please continue to try to find out witch filters and methodologies work best for you. Don’t be afraid to paper trade some off-the-wall stuff that no one else might be doing for an edge. Besides, paper trading is how you learn what works and what doesn’t. Good luck and have some fun with it. To learn more about the the Put/Cal Ratio Over 1.0 (Bullish), click here. Discover all the tools and commentary available from the Zacks.com Options Center at: http://at.zacks.com/?id=2382. 4. ZACKS #1 RANK STOCKS The Zacks #1 Rank (Strong Buy) list is always limited to approximately 220 stocks. Four stocks that are currently included in this elite group are: Administaff, Advent Software, Broadcom and Herman Miller. Alliance Data Systems Corp. (NYSE: ADS) released third-quarter earnings of 42 cents per share in mid-October, which topped the previous year’s 31 cents. The company said momentum continued to build for future quarters from significant new client wins and contract extensions. ADS was comfortable raising its full year 2005 earnings guidance to $2.00 - $2.02 versus the $1.92 - $1.95 stated previously. Analysts have current estimates pegged at $2.03 per share, which is nearly 4% above two months ago levels. Continue your research on ADS at: http://at.zacks.com/?id=2270. Blue Coat Systems, Inc. (NASDAQ: BCSI) recently announced fiscal second-quarter non-GAAP earnings of 32 cents per share, surging past last year’s nine cents and eclipsing the consensus estimate by about 10%. Net revenue increased by 67.4% year-over-year and by 10% compared to the prior quarter. Earnings estimates for the year ending April 2006 moved up eight cents, or almost 7%, over the past 30 trading days. Continue your research on BCSI at: http://at.zacks.com/?id=2271. More...
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Freescale Semiconductor, Inc. (NYSE: FSL) reported third-quarter earnings of 35 cents per share, excluding items, in mid-October. The result was ahead of analysts’ expectations by 25% and surpassed the year prior total. Net sales reached $1.45 billion versus $1.47 billion in the second quarter and $1.43 billion in the third quarter of 2004. Earnings estimates for the year ending December 2005 are above one month ago levels by four cents, or approximately 3%. Continue your research on FSL at: http://at.zacks.com/?id=2272. Hypercom Corp. (NYSE: HYC) recently released third-quarter earnings of seven cents per share, outperforming last year’s one cent and outpacing the consensus estimate by 75%. Revenues for the third quarter totaled $69.8 million, which is an 11.2% year-over-year improvement. Earnings estimates for the year ending December 2005 are above one month ago levels by one penny, or 12.5%. Continue your research on HYC at: http://at.zacks.com/?id=2273. To see the full list of Zacks #1 Rank stocks (approximately 220 stocks), go to http://at.zacks.com/?id=2383. The Zacks Rank is a powerful stock indicator whose #1 Strong Buy stocks have risen by an average annual return of 33% since 1988 versus 11.8% for S&P 500 To help you fully understand how the Zacks Rank works and, more importantly, how you can profit by using the Zacks Rank, we have created a free report - The Zacks Rank - Harnessing the Power of Earnings Estimate Revisions. This valuable information is available at: http://at.zacks.com/?id=2385. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Zacks Rank #1 and #5 Additions Zacks #1 Rank List: 47 New Additions (alpha by ticker)
To see the full list of Zacks #1 Ranked stocks (approximately 220 stocks), then click here. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Zacks #5 Rank List: 35 New Additions (alpha by ticker)
To see the full list of Zacks #5 Ranked stocks (approximately 220 stocks), then click here. 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=2385. Or view the full list of Zacks #1 Ranked stocks at: http://at.zacks.com/?id=2383. 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=2386. 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, Charles Rotblut, CFA 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. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Zacks #1 Stocks on the Move 06/18/2013
| Company Name | Symbol | %Change |
|---|---|---|
| STAAR SURGIC | STAA | 10.98% |
| LUMOS NETWOR | LMOS | 5.70% |
| INSTEEL INDS | IIIN | 5.28% |
| ERICKSON AIR | EAC | 5.10% |
| ASSURED GUAR | AGO | 4.98% |
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