Wednesday - November 29, 2006
 Want to view the archive of past issues? Click here. Manage Profit from the Pros subscription: 1. ZACKS RANK BUY STOCKS Zacks #1 Ranked stocks average a 31.8% annual return. Every day on Zacks.com we highlight four new Zacks Rank Buy stocks. Each individual stock is chosen based on how well they match the criteria for the four main schools of investing: Aggressive Growth, Momentum, Growth & Income and Value. Aggressive Growth – Varian Semiconductor Equipment Associates, Inc. (VSEA) Varian Semiconductor Equipment Associates, Inc. (VSEA) which was first presented as an Aggressive Growth pick on Aug 3, is up nearly 22%. The company has exceeded analysts’ earnings estimates in each of the past seven quarters. VSEA recently announced record fourth-quarter and full-year 2006 results. Over the past month, this year's estimates have increased 8.5%, representing upward revisions by seven analysts. The stock is cheap given the company's growth prospects. VSEA is trading at 17.8x this year's estimates, below the projected long-term growth rate of 21.3%, giving the stock a PEG ratio of 0.84. Read the full analysis on VSEA now! Growth & Income – Fresenius Medical Care AG & Co. (FMS) Fresenius Medical Care AG & Co. (FMS) recently raised its full-year revenue and profit guidance after posting solid results for the third quarter. Analysts reacted to the company’s bullish outlook by upping their profit forecasts for both this quarter and the full year. This Zacks #1 Rank stock has a current dividend yield of 0.92% and a five-year average dividend yield of 1.3%. Its return on equity of 13% crushes the industry average of 4%. Read the full analysis on FMS now! More...
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Momentum – Cohen & Steers (CNS) Cohen & Steers (CNS) reported third-quarter earnings on Oct 25 at 39 cents per share, a 5% positive surprise over analysts’ expectations and 95% above the 20 cents earned in the same quarter last year. CNS has managed to deliver a positive earnings surprise in three out of the past four quarters. Read the analysis of CNS now! Value – American Safety Insurance Holdings, Ltd. (ASI) American Safety Insurance Holdings, Ltd. (ASI), a Zacks #1 Rank stock, topped analysts’ earnings expectations for the third quarter by 6.4% when it posted profits of 50 cents per share. Furthermore, both gross and net premiums written were up for the quarter. Since the release of ASI’s third-quarter results, analysts have been upping their earnings estimates for both this quarter and the full year. ASI has a price-to-book ratio of 1.1, compared to 4.9 for the market. Its PEG ratio currently sits at 0.72.. Read the full analysis on ASI now!
2. SCREEN OF THE WEEK Zacks.com offers three unique weekly commentaries that all
further our mission to help you Profit from the Pros. Today is
the latest installment of Screen of the Week from Kevin Matras.
Each week, Kevin shares with you another winning screen he has
discovered using the Research Wizard software from Zacks
Investment Research. Click here to learn more about the Research Wizard. ’Great Stocks often have Great Peers’ Nearly half of a stock’s price movement is tied to the performance of its respective group (Sector and Industry). That being said, most great stocks from great groups often have great peers as well. If you find yourself in a killer trade (or wish you were in one), take a look at the characteristics of THAT STOCK and then hunt within its group to find OTHER STOCKS that share the same characteristics. Does a certain outstanding stock exhibit great sales growth? I’m sure there are at least a few within its group that are also showing similar numbers. What about increasing margins? If the stock is doing well, it’s likely that the industry itself is experiencing meaningful increases in margins too. This type of screening is often called ‘modeling’. Figure out the components of what makes something successful and concentrate on that. If you’re in love with a certain stock or sector but it’s not doing anything, or even moving against you, then move on. If you see great stocks in great groups while you’re bemoaning your misfortune in laggards or non-movers, find what stocks are successful and model them. If the winningest stocks in a particular sector or industry are trading at PE ratios that you generally won’t consider, ... instead consider this; if you had considered them, they would be winning for you. So therefore, see what characteristics some of the best stocks have in common and try getting on some of those. Here’s something to start you off. The top three Sectors based on the percentage of stocks at (or within 10% of) their 52-week highs are listed below. (I think looking at the number of stocks trading near their 52-week high is better when analyzing a group than simply looking at the percentage price change. For example, if you have a group like the Oils and Energy sector that has had a huge run up over time, but then pulls back sharply in a wholesale manner (often times signaling a sector rotation), that group can still conceivably have a better average price change than other groups because the recent drop is ‘lost’ within the preceding price run-up. But monitoring their percentages from their 52-week high can always be detected, regardless of how great their previous run-up was, which in turn lets you cleanly analyze how good the group is really doing.) Current standings:
Here are a few stocks from each of those current top sectors (for Tuesday, 11/28/06):
Now try screening for stocks in these Sectors that are in the best Industries. Search for the best performers and then compare the valuations, such as P/E, Cash Flow, Sales or Net Margins. Or how about its Price/Book Value or Debt/Equity Leverage. Maybe you’ll see a pattern of upward EPS revisions or an increase in broker ratings or even perhaps new coverage. Simply put, modeling the best stocks is a great way to find other high probability winning stocks. To search for the best stocks yourself, sign up for your two-week FREE trial to the Research Wizard. Remember the key to successful screening is in discovering those screens that have produced profitable results in the past. And that’s exactly what you get with the powerful Screening and Backtesting ability of Research Wizard. You can do it. Learn how, today. Discover all the Free Screening Tools on Zacks.com now! Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. 3. ZACKS EQUITY RESEARCH With the start of the 2006 holiday shopping season underway, we wanted to get a technology and telecom update from David Weissman, CFA, senior telecom analyst. It has been about a month since discussing the telecom industry with him, and his telecom recommendations turned out favorably along with overall markets. You recently talked about markets in China and service providers offering attractive dividend yields. What are your thoughts on the technology and telecom markets at this stage? I have been recommending an increase in telecom carrier portfolio weighting since the summer, and now one should assess an allocation in the equipment and components space as we approach the holiday gift season. First, I believe the recent improved earnings performance among carriers, including AT&T (T), Bell South (BLS) and international strength at Telefonica (TEF), China Mobile (CHL), Vimplecom (VIP), and Telus (TU) will lead to larger cap-ex budgets for equipment upgrades and network expansion. More. . .
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - I further believe consumer electronics and consumer telephony products will be in stronger-than-usual demand this year. In particular, cell phones and PDAs (personal device assistants) with the latest capabilities (video, music, and other features) will make for nice holiday buying, even if it just to upgrade to the newest phones. So is there a particular company that has caught your attention? The most salient company in our telecom research coverage that leverages this seasonality is Motorola (MOT). The stock is trading down from its 52-week high following conservative financial guidance during the last call and following overly aggressive consensus estimates in prior quarters. However, the company and its carrier customers have been focused on heavy advertising and offering intriguing promotions to drive demand and sales. It is our opinion that Motorola’s cell phone sales will be robust this season and result in strong quarterly performance, which in turn may drive the stock to higher levels. Tell us a little more about Motorola? Motorola has been expanding to emerging markets, with recent plans to establish operations in South Korea and Vietnam, challenging market leader Nokia (NOK) on all cylinders. The company has been savvy at segmenting their target markets. For instance, over the past year they have developed the Q-Phone for business PDA applications, along with the Razr, Krzr, and Pebl as style and feature requirements vary among consumers. On a corporate strategy level, Motorola announced its decision to acquire Symbol Technologies (SBL) that will likely expand its enterprise market share with a variety of emerging applications. In synergy with handsets and cellular gadgets expected to be strong sellers, upside is expected with rollouts of carrier mobile video and WiMax networks. Outside wireless, the company continues to make progress with set-top-box media delivery services for cable telephony. The company also streamlined its business over the years, divesting its semiconductor and automotive communications components businesses, and now the company is fully focused on communications technology at the systems level. What about the financials and your price target? Motorola is trading at approximately 15x our estimate for 2007 earnings of $1.49/share, which is at a discount to its peer group. However, we believe that the wireless handset market – the core business segment of Motorola – remains healthy, with significant growth prospects in emerging markets. We provide a $26.00 valuation target based on 17x earnings, in line with peers. This seems reasonable given that the company has approximately $10 billion in net cash – or $4/share – and has provided a modest dividend to shareholders. Motorola’s management also expects revenue for the fourth quarter to be approximately $11.8-$12.1 billion, and if attained would represent an increase of 18-21% over the prior-year quarter. Read the complete ANALYST INTERVIEW article now! David Weissman, CFA is a senior analyst covering the telecommunications industry for Zacks Equity Research. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Analyst Blog Real-time market insights from Zacks Equity Research Analysts. Stocks featured recently include BJ’s Wholesale Club (BJ), Freddie Mac (FRE), Regent Communications (RGCI) and Valero (VLI). To see their latest posts, click here. Sempra Energy (SRE) - Attractive Valuation. For full Zacks research report, click here. Amylin Pharmaceuticals (AMLN) - Shares Overbought. For full Zacks research report, click here. The Week of Nov 27 – Dec 1 Seasonal Lull Find out which stocks have been recently upgraded by Zacks Equity Research: click here. Read the reports on all of the stocks on the Zacks Equity Research Buy List: click here.
4. ZACKS WEALTH MANAGEMENT Every week, Zacks Wealth Management provides informative articles on how to build and protect wealth. Today’s topic is:
If you are holding your employer’s stock in your retirement account there is a little known tax break on that stock’s Net Unrealized Appreciation (NUA). With proper planning you could save yourself thousands of dollars in taxes and penalties. What is NUA? NUA is the difference between the average cost basis and current market value of your employer issued stock in a tax deferred retirement plan. Suppose your company issued stock to you in your 401(k) plan totaling $100,000, and today it is worth $1 million. The net unrealized appreciation (NUA) is $900,000. Because these assets are held in a qualified account, you do not owe capital appreciation taxes on this investment. However there is a financial planning technique that can help you take advantage of your NUA. How do you take advantage of NUA? If you are retiring or separating from your current plan there are a couple of ways to handle your distributions. Again let’s use the example of $1 million worth of stock with an original cost basis of $100,000.
Rolling the proceeds over to an IRA takes you out of the game when it comes to NUA. In order for you to take advantage of NUA you must meet several requirements. Who should take advantage of NUA?
Who should take advantage of NUA? That really depends on the situation. The IRA rollover is better:
NUA is better:
Again keeping in mind that in the NUA cases above you are only paying the 15% long-term capital gains rate while IRA distributions are taxed at your ordinary income tax rate. This is a difficult area in financial planning but it is worth investigating. Work with an advisor or tax professional and he/she can help you determine your various options based on your individual circumstances. Jonas Zamora is a Certified Financial Planner™ professional This article is provided for informational purposes only and does not constitute legal or tax advice. Zacks Investment Management, Inc. is not engaged in rendering legal, tax, accounting or other professional services. Publication and distribution of this article is not intended to create, and the information contained herein does not constitute, an attorney-client relationship. Do not act or rely upon the information and advice given in this publication without seeking the services of competent and professional legal, tax, or accounting counsel. CFP Board, a nonprofit regulatory organization, fosters professional standards in personal financial planning so that the public values, has access to and benefits from competent and ethical financial planning. CFP Board owns the certification marks CFP®, Certified Financial Planner™ and federally registered CFP (with flame logo), which it awards to individuals who successfully complete initial and ongoing certification requirements. CFP Board currently authorizes more than 50,000 individuals to use these marks in the United States. For more about CFP Board, visit www.CFP.net. Learn more about Zacks Wealth Management now! - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - MITCH ZACKS ON THE MARKETS The stock market should begin to benefit from flows of assets out of other investment classes. More... 5. FEATURED EXPERTS Here we cast the spotlight on a timely Featured Expert commentaries that recently appeared on Zacks.com. Dennis Slothower recommends a largely neutral position right now. Read this expert’s latest market commentary. More... Charles Carlson highlights big companies that are implementing big dividend increases. Learn about the trends behind the jumbo dividend hikes. More... Ron Rowland explains that patience is key right now. Benefit from this mutual fund expert’s insight. More... 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 (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. Or view the full list of Zacks #1 Ranked stocks. 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 to help take definitive action to improve your portfolio's performance. Did we mention it's free? Get started now! 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 Zacks Performance Rank performance is the total return of equal weighted simulated portfolios consisting of those stocks with the indicated Zacks Rank net of fees. Results reflect the reinvestment of dividends and other earnings. Simulated results do not represent actual trading and may not reflect the impact that economic and market factors might have had on decision-making if an adviser were actually managing a client's money. 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 05/23/2013
| Company Name | Symbol | %Change |
|---|---|---|
| ALLIANCE FIB | AFOP | 5.21% |
| CYNOSURE INC | CYNO | 4.42% |
| DAWSON GEOPH | DWSN | 4.33% |
| MARRIOTT VAC | VAC | 3.27% |
| BLOOMIN' | BLMN | 2.93% |
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