Tuesday - May 22, 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 – aQuantive (AQNT) Listen to the audio podcast on MT through Zacks' NEW Audio Feature. Arcelor Mittal (MT) reported first-quarter earnings of $1.62 per share on May 16, above consensus estimates of $1.40 and year-ago results of $1.05. Driving the earnings growth, revenues rose by 17% to $24.5 billion. The company has exceeded analysts’ estimates for two consecutive quarters. Also, analysts raised full-year estimates by 8 cents to $6.53, the second increase in three months. MT has risen 37.7% for 2007 and 7.8% since Zacks featured the company as a momentum play. Terex Corporation (TEX), presented as a Value pick on Feb 28, has returned 18%. TEX was ranked the number four best performing company on the 2007 Barron's 500 survey. The survey ranks U.S. and Canadian Standard and Poor's 500 Index companies on the basis of one- and three-year cash-flow, returns on investment, sales growth and stock price performance. Chairman and CEO Ronald M. DeFeo stated, "While we have grown into one of the world's preeminent construction, mining and infrastructure equipment manufacturers, we continue to view Terex as a young company with significantly more potential in front of us than past successes behind us." Read the full analysis on TEX now!
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 (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 Here are four stocks that make the grade for the Return on Equity (ROE) Profit Track: General Cable Corp. (BGC) recently announced financial results for the first quarter. Excluding charges, earnings per share totaled $1.01. The result surged past the previous year's 41 cents and surpassed analysts’ expectations by 35%. General Cable Corp. satisfies the criteria of this Profit Track as evidenced by its ROE of 39.43 and price to sales ratio is 0.88. Read the full analysis on BGC now! Perini Corp. (PCR) has a ROE of 25.59 and a price to sales ratio of 0.39. The company recently posted first-quarter earnings of 84 cents per share, more than doubling last year’s 30 cents and eclipsing the consensus estimate by almost 56%. PCR noted that the strong quarterly performance was led by the company’s building and management services segments. Read the full analysis on PCR now! Schnitzer Steel Industries, Inc. (SCHN) offers a ROE of 18.49 and a price to sales ratio of 0.72. The company reported fiscal second-quarter earnings of 93 cents per share in early April. The result outperformed the year-ago total of 68 cents and topped the consensus estimate by 50%. Wall Street has been bullish on earnings estimates for SCHN. Current forecasts for the third quarter stand at $1.07 per share, up from 92 cents over the past 60 trading days. Expectations for the year ending August of 2007 moved up to $3.90 per share from $3.36 over the same time period. Read the full analysis on SCHN now! Suburban Propane Partners LP (SPH) recently released fiscal second-quarter earnings of $3.22 per share, beating the consensus estimate by nearly 15% and improving on the previous year’s $2.43. During the past five consecutive quarters, SPH missed Wall Street earnings expectations only once. The company sports ROE of 92.85. Its price to sales ratio stands at 1.00. Read the full analysis on SPH 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”. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Listen to the audio podcast for the Screen of the Week through Zacks' NEW Audio Feature. Return on Equity – Part of a Winning Screening Strategy Kevin Matras combines some of his winningest strategies to create a Custom Consensus screen. More... 3. ZACKS EQUITY RESEARCH With first quarter earnings season just about complete, we thought we’d check in with senior telecommunications analyst David Weissman, CFA to see how results matched expectations for companies within his coverage, and what he’s looking for going forward. How did first-quarter earnings perform in the telecom sector overall, compared to what you had been expecting? We were actually quite impressed with the run on valuations in both the telecom equipment and telecom services sectors. In many respects, [they have been] exceeding our expectations. In fact, since starting coverage here about a year and a half ago, we actually have more Buy ratings in the sector than at any time before. More. . .
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - This is for equipment companies as well as services? It is, actually, because what happens is once telecom services companies start to bring in the bottom-line improvement, they’re able to spend more on infrastructure and equipment. And that bodes well for telecom equipment and sub-component companies, as well. Now are you still seeing relative strength in services over equipment these days? And if so, do you see this changing on the horizon? There’s definitely a lot more strength right now on the telecom services side, particularly in international markets where the growth and demographics favor improved penetration of new customers and new services. In the U.S., there is a tendency to have less subscriber penetration, but added features. So both those – in fact, both on an international basis where they have subscriber growth and on a domestic basis, where you could bring in new services – we’re seeing a pick-up in the carrier side, and again that should trickle into the equipment spending with capex, as they try to improve service quality and bring in new features. With this in mind, what would be your top one or two stocks to buy at this time? On the services side, we still like some of the growth markets, especially in China. One of our Buy ratings is Chunghwa Telecom (CHT), trading just under $20 with a $24 price target. And it’s trading at about 10x earnings, which is relatively below the Standard & Poor’s 500 index of about 17-18x earnings for 2007. So we’re bullish on that – in particular the growth in Taiwan and the new entry of many Chinese investors opening up stock accounts, [which] should favor public company trading, moving forward. On the equipment side, we particularly like some of the trends with companies focused on wireless data. If we take a look, especially in the U.S., most of the penetration in the wireless voice market has been saturated. We have 60 million-plus at Verizon (VZ), 63 million subscribers at AT&T (T) and over 53 million at Sprint (S). That doesn’t leave that many more new subscribers to get in the United States, so the way they’re improving their ARPU [average revenue per user] is by expanding services. And one way to do that is with wireless data. So we’re looking at companies that are able to support wireless data – companies like Sierra Wireless (SWIR) and Novatel (NVTL). They both provide wireless data cards for the carriers. To read the complete Analyst Interview, click here. David Weissman, CFA is a senior analyst covering the telecommunications sector for Zacks Equity Research. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Real-time market insights from Zacks Equity Research Analysts. Stocks featured recently include ASE Test (ASTSF), Harris Interactive (HPOL), Polycom (PLCM) and Cutera (CUTR). Get their latest posts: click here. More Economic Uncertainty Nordstrom (JWN) - Strong Growth Potential. For full Zacks research report, click here. 3Com Corp. (COMS) - Valuation May Fall. For full Zacks research report, click here. Listen to the audio podcast for the Earnings Preview through Zacks' NEW Audio Feature. The Week of May 21 – May 25 Estimates Rise in Response to First-Quarter Results 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. 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. Zacks/Schaeffer’s Options Trading service. Researching this week's article, I noticed that it has been a while since we examined the Most Active Call Options filter. Of all our filters, this one seems to get lost in the mix and is underappreciated as a useful indicator. Before delving into this filter and looking at a particular stock, let's address our Schaeffer's methodology. We are contrarian-based investors, indicating that we want to see skepticism toward an outperforming stock. On the other hand, we typically like to see optimism toward an underperformer. In our eyes, too much optimism is a sign that nearly everyone who wants to invest in a particular stock already has. Just because a stock sees substantial optimism doesn't mean that we will blindly short that particular security; we need to see some negative price action or a major catalyst for a downside move in order to pull the trigger in most cases. Other indicators we use to measure overall sentiment include short interest, magazine cover stories, media comments, and analyst ratings. What is the Most Active Call Options filter? Well, the name might be enough to answer that question in a basic way, but to get a fuller understanding, let's first define puts and calls. Puts are, in the most basic sense (which is all we need for our purposes here) a bet that the underlying stock is going to move lower, while calls are a bet that the underlying stock is going to move higher. According to our methodology, heavy attention to calls by investors indicates an increase in optimism toward an equity, and can present the opportunity for a solid bearish addition to your portfolio. This filter lists stocks that have received an unusually high degree of call option activity, providing us with a pool of securities that could fit the bill for a nice short position. Today's list from Zacks shows that Starbucks (SBUX) is seeing some heavy volume at its June 30 strike. With over 19,000 contracts, this is the site of peak open call interest for the soon-to-be front month June contract. Let's see what we can make of all this optimism. Starbucks stock has been steadily declining since the last quarter of 2006 and has spent most of that time under the dual resistance of its 10-week and 20-week moving averages. What is most important, however, is that the stock is currently trading below the 30 level, site of so much call attention. Though shares seem to be enjoying some end-of-the-week upward energy, there is some strong resistance waiting for it close overhead. Before reaching that 30 level, the stock will have to contend with its 10-day moving average and, quite possibly, the 20-day also, if that trendline gets down to that number before the stock gets up to it. Looking at a daily chart of Starbucks from the beginning of the year, we can clearly see how much more time the stock has spent under these moving averages than over them. As if that weren't enough resistance for the stock, there is also the strong possibility of options-related resistance at the 30 strike. What does the Street think of SBUX? Well, pretty good, actually...which bodes well for our bearish feelings (we are contrarians, after all). Of the 14 analysts following the stock, nine rate it a "buy" or better, and the other five keep it at a "hold." This leaves plenty of room for downgrades, which as we all know is one of the most powerful catalysts for downward movement. The stock hasn't been too attractive to short sellers, though. Currently, only 3.75% of the stock's total float is shorted, which translates to less than 2.5 days of trading on SBUX's average daily volume. This is not great news for the bulls out there, since the stock will not benefit from much of a short-covering rally on any positive news or movement. Finally, getting back to the options pits, overall SBUX is seeing relatively overwhelming optimism. The stock's Schaeffer's put/call open interest ratio (SOIR) of 0.69 is lower (more bullish) than 97% of all readings taken over the past year. For those contrarians out there, or perhaps just those with wide a contrarian streak, this adds up to a bearish outlook on Starbucks. The stock and company are enjoying an immense amount of love, yet the technical data does not support this optimism. To learn more about the Most Active Call Options filter, click here. Discover all the tools and commentary available from the Zacks.com Options Center. Leverage the timeliness of Zacks #1 Rank stocks with options trades that maximize profits and minimize risks. Learn more about our new Options Trading service. 5. 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: Lilnev2000 (Rank #3 with $182,981) DENISON MINES – SOLID URANIUM PLAY (DNN) Read More or Comment on this post. Java J (Rank #21 with $149,946) TTM TECHNOLOGIES…UNDERVALUED?? PRICE/VOLUME ACTION VERY BULLISH…(TTMI) Read More or Comment on this post. Shoelessjoe (Rank #10 with $157,494) TOTAL “UNKNOWN” (DIGF) Read More or Comment on this post. Read all the Player Blog posts. 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. Or view the full list of Zacks #1 Rank 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! 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. *Zacks Rank performance is the total return (price changes + dividends) of equal weighted portfolios, consisting of those stocks with the indicated Zacks Rank, assuming zero transaction costs. These returns are not the result of a backtest; these are actual returns since 1988. The stocks in the Zacks Rank portfolios were available to Zacks clients before the beginning of each month (monthly rebalancing). Performance results from 1988 through September 2006 are based on a subset of all Zacks Rank stocks that excludes stocks covered by only one analyst and ADR’s. 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
- What is the Stock Market's Achilles Heel?
- 3 Dividend Stocks at Reasonable Prices
- RTI: Are You Doing the Elon Musk Trade?
- Buy These ETFs to Profit from "Sector Rotation"
- Oil & Gas Industry Stock Outlook - May 2013
- Uncharted Territory
- 4 Ways to Short Oil with ETFs
- Options Strategies & the Zacks Rank
- This Week's Growth & Income Stocks
- AWS 5/17: The Fed: The Only Game in Town
- PFP 5/17: The ONLY Investment Story
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 05/17/2013
| Company Name | Symbol | %Change |
|---|---|---|
| VIASAT INC | VSAT | 19.35% |
| OLD SECOND B | OSBC | 5.76% |
| GAMCO INVEST | GBL | 4.61% |
| CORNING INC | GLW | 4.47% |
| SYNCHRONOSS | SNCR | 4.23% |
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.