Thursday - March 1, 2007
 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 – OfficeMax Inc. (OMX) OfficeMax Inc. (OMX) has comfortably exceeded earnings estimates in each of the past five quarters. Three of them had positive surprises over 100%. Three analysts have raised their forecasts for this year, while two have done so for next year. Over the past week, earnings estimates have jumped eight cents to $2.66 per share. The stock is attractive at 17.2x next year's estimate of $3.04 per share, below the projected 20% growth rate. Read the full analysis on OMX now! Garmin, Ltd. (GRMN) exceeded analysts’ earnings expectations in 11 consecutive quarters by an average margin of 16.8%. Consensus estimates have been trending higher after the company released impressive results for the fourth quarter and full year of 2006. GRMN is currently yielding 0.87% and its return on equity more than triples that of the industry average—37% compared to 11%. Read the full analysis on GRMN now! Momentum – Internet Gold (IGLD) Internet Gold (IGLD) reported EPS of 8 cents on Feb 26, after a non-cash charge of $2.3 million related to its’ Jan 1, acquisition of 012 Golden Lines Ltd. Without this non-cash charge, EPS would have been 20 cents, up 194% from the same quarter last year. Sales grew 45% to $27.8 million for the quarter, while Income grew 88%. Read the full analysis on IGLD now! Terex Corporation (TEX) is up nearly 58% since being featured as a Value stock on Sep 12. Moreover, the company remains a Zacks #1 Rank stock. TEX recently reported solid results for the fourth quarter and full year of 2006. Analysts have been upping their earnings estimates for both this year and next. The Board of Directors announced a $200 million share repurchase program in mid December. TEX’s PEG ratio currently sits at 0.85. Read the full analysis on TEX now!
2. Best of the Zacks $100,000 Challenge Zacks is conducting a nationwide talent search to find the very best stock pickers. The winner gets a $100,000 dream job with Zacks! . Sign up for free to join the competition, or just read what stocks the leading players are trading on the Zacks Challenge Player Blogs. Best of the Zacks Challenge Player Blogs Here's what the leading players are saying lately: Beris (Ranked #16 with $124,727) ARE WE READY TO RALLY?? Read More or Comment on this post. Java J (Ranked #1 with $551,236) MARKET SELL OFF = SELF ANALYSIS ? Read More or Comment on this post. ShoelessJoe (Ranked #2 with $293,083) GOING AFTER HEDGE FUND!! (INGN) Read More or Comment on this post. Read all the Player Blog posts.
Top Zacks Challenge Player Interview: dreyerd This week we sat down with another technical trader. Don Dreyer (aka: dreyerd) bases most of his trade decisions on technical analysis. He noted, “I use the Investors Business Daily (IBD) as well as the relative strength of stocks and sectors when creating a list of stocks to consider. I trust sources like IBD and Zacks to do the fundamental research and I never personally dig into the details of the companies I trade. The current trend and technical pattern of the stock is of utmost importance. I also want to stay in harmony with the overall market; go long when the market is strong or strengthening and go short when the market is weak or weakening.” Don uses this approach to invest in companies such as Gammon Lake Resources Inc. (GRS), and ETFs such as the UltraShort QQQ ProShares (QID) and the UltraShort SP500 ProShares (SDS). These picks among several others have landed this player’s Zacks $100K Challenge portfolio into the top 10 with an overall return of 51.68% since the beginning of this year. Click here to check out this participant’s complete portfolio. How is he so successful? Don credits several market gurus for his astute style of trading. This market enthusiast said, “I stand on the shoulders of many investing giants. What works now in the stock market is closely related to what has worked in the past. Jesse Livermore, William O'Neil, Jack Schwager, Van Tharp and Alex Elder have provided the most via the written word. Marc Mandel and his radio program Winning On Wall Street (winningonwallstreet.com) has been a tremendous inspiration. David Elliot (wallstreetteachers.com) has heavily influenced the strategy I use to trade. Harry Boxer (thetechtrader.com) has also contributed to my strategy development.” While he does not rely on one stock to make or break his portfolio, the Simulator competitor did single out Gammon Lake Resources Inc. (GRS) as his best performer. He explained that this precious metal play was coiling quietly into the 50-day moving average. Don pointed that this quiet consolidation pattern is one of his favorites. He did the technical analysis, put in the buy order and a few days later GRS made a strong move higher. Click here to read the whole interview with dreyerd. Click here for more on the Zacks $100,000 Challenge. 3. ZACKS EQUITY RESEARCH Heinz (HNZ) shareholders were very happily thinking red yesterday. The food company generated a 5% increase sales thanks to double-digit growth in products such as Classico pasta sauces and Smart Ones meals (which are packaged in red boxes). Sales improved thanks to a combination of higher volume (especially in Russia, India, China, Indonesia and Poland), pricing power and favorable exchange rates. The stronger sales, and improved margins, led to earnings of 66 cents per share, four cents better than brokerage analysts had forecast. Based on the results, HNZ reaffirmed its full-year EPS guidance of $2.35 to $2.39 per share. The consensus estimate, as of Tuesday morning, was at $2.37 per share. Heinz’s results follow bullish earnings from Campbell Soup Company (CPB). CPB recently reported fiscal second-quarter earnings of 68 cents per share, six cents above expectations. Net sales rose 4%, reflecting a 1% increase in volume (V8, Prego pasta sauces and Pepperidge Farm Goldfish crackers sales surged), improved pricing and favorable exchange rates. Citing the positive momentum, CPB raised its full-year guidance to earnings growth of 10% to 12%, from 5% to 7%. 11 of the 16 covering brokerage analysts adjusted their forecasts in response, pushing the consensus estimate up five cents to $1.94 per share. Both CPB and HNZ are Zacks #2 Rank (“buy”) stocks and are classified in Food-Canned. More. . .
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Last week, I discussed positive momentum within the Medical-Health Maintenance Organizations group. As I was publishing the article, Medco Health Solutions (MHS) was delivering a bullish fourth-quarter earnings report. The pharmacy benefits manager earned 86 cents per share, on an adjusted basis, easily surpassing expectations for 79 cents per share. Improved client volume helped revenues to rise by 9% on a comparable basis and increased sales of generic drugs helped to widen gross margins. Like managed care providers, MHS benefits from higher enrollments and Medicare Part D. Citing what it describes as “improved fundamental performance” (mail-order volume is expected to set a new record of 95 million prescriptions) as well as the impact of stock buybacks, Medco raised it is guidance. The company now expects to earn between $3.31 and $3.40 on an adjusted basis this year. Previously, MHS had forecast 2007 profits of $3.12 to $3.19 per share. Nearly all of the 17 covering brokerage analysts raised their projections in response, sending the consensus estimate up to $3.35 per share, a 19-cent increase. Earnings estimates for oil E&P companies are falling. The Zacks Revision Ratio for Oil & Gas-U.S. Exploration & Production is 0.20, reflecting 48 positive revisions and 235 negative revisions to full-year profit forecasts over the past four weeks. (By means of comparison, the Zacks Revision for the entire Zacks Rank universe is 0.83). The downward trend suggests a general belief among brokerage analysts that natural gas prices and oil prices will be lower this year than last. Not helping the group are recent negative earnings surprises from Ultra Petroleum (UPL) and Pogo Production (PPP). UPL earned 38 cents per share in its fourth quarter, four cents less than brokerage analysts were expecting. PPP generated a loss of 29 cents per share, missing expectations by 74 cents per share. Natural gas production improved for both companies, but not enough to compensate for the sharp decrease in gas prices. Analysts quickly slashed their 2007 forecasts for both companies following the earnings reports. The new consensus estimate for UPL is $1.79 per share, down 13 cents from a week ago. The new consensus estimate for PPP is $2.41, down 37 cents from a week ago. Both UPL and PPP are two of 17 Zacks #5 Rank (“strong sell”) stocks in the Oil-US Exploration & Production. This group also contains 14 Zacks #4 Rank (“sell”) stocks. To read the complete Industry Rank Analysis, click here. Charles Rotblut, CFA is the senior market analyst for Zacks Equity Research. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Analyst Blog Real-time market insights from Zacks Equity Research Analysts. Stocks featured recently include Volcom, Inc. (VLCM), Liberty Property Trust (LRY), Arris Group (ARRS) and ASML Holding N.V. (ASML). To see their latest posts, click here. Arris Group (ARRS) - Good Growth Prospects. For full Zacks research report, click here. Embarq Corp. (EQ) - Strained Margins. For full Zacks research report, click here. Windows Vista Provides a Boost to IT Earnings Being Revised Upwards 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. 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 (ROE) 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. ROE = income / common equity One of the quickest ways to gauge whether a company is creating assets or gobbling up investor's cash is to look at their ROE. This fast moving Profit Track returned an impressive +19.1% in 2005. American Home Mortgage Investment Corp. (AHM) has a ROE of 20.09 and a price to sales ratio is 0.63. In late January, the company reported fourth-quarter earnings of $1.21 per share, soaring past the previous year's 27 cents and surpassing the consensus estimate by nearly 2%. In fact, AHM delivered earnings per share that topped Analyst expectations over the past five consecutive quarters. Continue your research on AHM now! Avnet, Inc. (AVT) satisfies the criteria for this Profit Track as evidenced by its ROE of 12.05 and price to sales ratio is 0.35. The company announced fiscal second-quarter earnings of 67 cents per share in late January. The result exceeded the consensus estimate by 8% and outperformed the year-ago total. AVT stated that its strong quarterly performance was the result of its highly diversified revenue base and continuously improving expense productivity across both operating groups. Continue your research on AVT now! General Cable Corp. (BGC) recently completed the acquisition of Jiangyin Huaming Specialty Cable Co. Ltd., a Chinese manufacturer of specialty automotive and industrial cable products. In early February, the company posted fourth-quarter earnings of 67 cents per share. The result surpassed analysts' expectations by 14% and soared past the previous year's total. Revenues climbed to $925.3 million from last year's $617.5 million. The company sports a ROE of 34.76 and a price to sales ratio is 0.70. Continue your research on BGC now! Keystone Automotive Industries Inc. (KEYS) offers a ROE of 11.28 and a price to sales ratio is 0.78. In late January, the company noted that it delivered record earnings and sales for its fiscal third quarter. Earnings per share totaled 57 cents, which surpassed the previous year’s 44 cents and jumped ahead of the consensus estimate by 21%. Continue your research on KEYS now! To see the full list of stocks that currently pass this winning screen, click here. 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”. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Price Targets and Multiple Expansion Kevin Matras shows how to create your own price targets and how to estimate your stocks’ future earnings multiples: Click here. 5. ZacksElite.com TIMELY BUY of the WEEK Here you'll discover a Zacks #1 Rank stock hand selected by Ben Zacks to outperform the market over the next 30 to 90 days. This week's Timely Buy is...
Founded in 1998 and based in Brisbane, CA, Cutera, Inc. (CUTR) designs, manufactures and markets laser and light-based aesthetic applications. Since it commenced commercial production in 2000, CUTR has quickly grown to become a leading player in the laser treatment category. Originally Altus Medical, the company changed its name to Cutera in January 2004 before going public in March 2004. Its flagship CoolGlide line of products is used in cosmetic processes such as permanent hair removal, and for treating pigmented lesions, wrinkles and veins. Cutera’s primary customers are dermatologists and cosmetic surgeons, but it is also targeting its products for gynecologists and primary care physicians. The company derives revenue from four major sources: laser system sales (84% of 2006 revenues), upgrades (6%), service contracts (4%) and Titan refill revenues (6%). In the fourth quarter 2006, laser system sales were 85% of total revenues, upgrades 6% of revenues, service contracts 6% of revenues, and Titan refills were 3% of revenues. The market for aesthetic procedures is experiencing substantial growth with increasing interest in beauty treatments. Within this market, the non-surgical segment is growing the fastest. The aging Baby Boomer market is driving demand, and greater affluence makes the aesthetics market more accessible. As well, aesthetic procedures are becoming more acceptable in society. In late January, CUTR reported results for the fourth quarter and full-year 2006. For the fourth quarter, GAAP earnings per share totaled 50 cents, improving on the previous year’s 41 cents per share and exceeding the consensus estimate by 56%. Net revenues grew 27% from last year’s fourth-quarter. "2006 was an exciting year for Cutera -- we maintained strong revenue growth, resolved our patent litigation and experienced improved financial leverage in our business model. We are very excited about the opportunities for our company in 2007, as we continue to focus on developing new products and applications and expanding our distribution channels. We expect these efforts will enable us to continue increasing our market share in the growing market for light-based aesthetic systems," said Kevin Connors, President and Chief Executive Officer. For the first quarter and full-year 2007, the company expects GAAP diluted earnings per share to be 21 cents and $1.30, respectively. Wall Street is currently forecasting first-quarter earnings of 21 cents per share, which is up from last month’s 15 cents. The current full-year 2007 consensus estimate stands at $1.30 per share, an increase from the one month-ago level of $1.09.
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 Rank (Strong Buy) List has produced the following results for investors:
And just as importantly, our #5 Ranked stocks (Strong Sells) have alerted investors as to which stocks to dump from their portfolios to avoid unnecessary losses. FREE PORTFOLIO TRACKER Do you believe that these events affect stock prices?
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Zacks #1 Stocks on the Move 05/22/2013
| Company Name | Symbol | %Change |
|---|---|---|
| ALLIANCE FIB | AFOP | 8.45% |
| SONIC FOUNDR | SOFO | 8.21% |
| TRI TECH HOL | TRIT | 6.63% |
| NOAH HOLDING | NOAH | 5.69% |
| OILTANKING P | OILT | 4.13% |
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