Tuesday - October 9, 2007
 Want to view the archive of past issues? Click here. Manage Profit from the Pros subscription: 1. ZACKS RANK BUY STOCKS Zacks #1 Rank stocks average a 32% 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 - AK Steel (AKS) Research in Motion (RIMM) soared to a new high after the company offered robust growth expectations. RIM crossed the 10 million-subscriber mark and reported revenue of $1.37 billion in the second quarter, more than double the $658.5 million in the same quarter of last year. RIM's bullish guidance reflects the company's plans for a strong holiday season. Read the full analysis on RIMM now! OM Group, Inc. (OMG) reported that it finalized its previously announced acquisition of Borchers GmbH, a leading European- based specialty coatings additive supplier. Chairman and CEO Joseph M. Scaminace stated, "Borchers is highly complementary to our advanced coatings business, as it extends our current product portfolio and broadens our geographic reach. Furthermore, the addition of this highly respected technology leader keeps with our long-range growth strategy, which includes continued product innovation as well as tactical and strategic acquisitions." Consensus earnings estimates for both this year and next year are up over the past 30 days for this Zacks #1 Rank stock (strong buy). Read the full analysis on OMG 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: 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. Here are four stocks that make the grade for the Earnings and Margins Profit Track: Amtech Systems, Inc. (ASYS) announced fiscal third-quarter earnings of 15 cents per share in mid-August, eclipsing the consensus estimate by 36% and outperforming the year-ago total. Record net revenue of $12.9 million increased 22% sequentially from the second quarter and was up 24% from the previous year's third quarter. ASYS has a net margin of 0.03. For the last full year, the company's earnings growth stands at 442% above the previous year. Read the full analysis on ASYS now! Advocat, Inc. (AVCA) reported second-quarter earnings of
68 cents per share in early August, soaring past the consensus estimate by 423% and out performing the year-prior total.
Revenue of $55.4 million was up 3.7% on a year-over-year basis.
AVCA meets criteria for this Profit Track as evidenced by its net margin of 0.10 and annual earnings growth of 71% above the prior full year. Read the full analysis on AVCA now! Hollywood Media Corp. (HOLL) offers a net margin of 0.08 and earnings growth of 18% for the most recently completed year, compared to the year-prior. In earl y August, the company released its results for the second quarter. HOLL posted a loss of four cents per share that was a penny a wider than the year-ago loss.
However, the result did match analysts' expectations. Net revenues of $39.6 million came in at 25.3% above last year's total. Read the full analysis on HOLL now! Harbin Electric, Inc. (HRBN) released second-quarter earnings of 24 cents per share in mid-August, eclipsing the previous year's
21 cents. Total revenues increased by 44% on a year-over-year basis.
The company mentioned that it continued to see year-over-year growth driven by sales to existing customers, demonstrating the strength of its ongoing customer relationships. HRBN experienced annual earnings per share growth of 53% for the most recent full year, versus the year-ago result. The company has net margin of 0.46. Read the full analysis on HRBN 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”. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Great Stocks Often Have Great Peers Kevin Matras looks at how to find winning stocks in the winningest sectors. More... 3. ZACKS EQUITY RESEARCH Third quarter numbers are still on the horizon at this time for most telecom companies, so we are taking the opportunity today to speak with Zacks senior telecommunications analyst David Weissman, CFA about one of the most important global markets, and what is expected from it as it continues to grow in the future. In the past, we discussed telecom in many parts of the world, with particular focus on North America and China. But today you wanted to provide some highlights of recent activity in another high-growth region, which is India. Can you give us, first, an overview of the telecom industry in this emerging market? Last time we talked about China, developments in North America and Russia. But I wanted to focus in on India, with a population exceeding 1.1 billion people, where about a quarter of those are in the city - meaning there's about three- quarters of the population untapped in rural areas where there is a need for telecom infrastructure. More. . .
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Just to give you an idea of the size here, we're talking about a market with over 206 million phone lines. Of that, 166 million are cellular, and only 40 million are fixed line. And the cellular subscriber growth is growing robustly, at about 45-50% year over year. One other statistic that shows the under-penetration in terms of lines, only 18 out of a 100 people have lines - 18 lines per 100 pops. And that's a number that seems to be growing rapidly as the wireless infrastructure takes place. This sounds like more of a recent phenomenon. Correct. How would you classify the telecom market from a competitive standpoint? Well, there are two different views to take here. You first have the "fixed line" business, wire-line, which in the past was fully developed by government, and the government over the past 10-20 years has been divesting itself into the privatization area. And so there's one or two major players on the fixed-line side, like Bharti and Videsh [Sanchar Nigam] (VSL), which we'll talk about in a little while. And then on the wireless side, it's highly fragmented, with nearly a dozen players - Reliance being the largest; Vodafone (VOD) which just acquired Essar; and Bharti are the top contenders there. But you also have a host of others like Airtel, AirCell, MTNL and BPL. So it's a highly fragmented wireless sector. Considering the fact that wireless is leading as the preferred infrastructure, can you provide us with some recent activity making news in India for wireless development? What we're seeing is this phenomenal opportunity to side-step actually rolling out copper lines to rural and untapped areas with the use of wireless infrastructure. Recently, we'd started with Vodafone's interest in purchasing Hutchison Essar Group for its interest in the India growth phenomenon. Then we had, just [last] week, AT&T's (T) announcement that it's going to be partnering for a wireless spectrum with Mahindra Telecom Private Ltd., a part of the Mahindra holding group out in India. So there's a lot of activity there. There's a recent privatization that's moving forward, where the government has been loosening its regulatory stance to allow international investments, as well as for the competition on the private and public investment sectors. To read the complete Analyst Interview, click here. David Weissman, CFA is a senior analyst covering the telecommunications industry for Zacks Equity Research. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Real-time market insights from Zacks Equity Research Analysts. Stocks featured recently include Infosys Technologies (INFY), Spectranetics (SPNC), Cadence Design Systems (CDNS) and Genomic Health (GHDX). Get their latest posts: click here. Cognos, Inc. (COGN) - Firing on All Cylinders. For full Zacks research report, click here. Kimberly-Clark (KMB) - Difficulty Breaking Free. For full Zacks research report, click here. Listen to the audio podcast for Earnings Preview through Zacks' Audio Feature. The Week of Oct 8 - Oct 12 Analysts Turn More Cautious 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. Keeping an eye on options activity can give you that edge in determining how to play the market. One excellent method for judging options activity is by looking at the Zacks High Open Interest Put Position filter. This filter singles out stocks that have acquired an abnormally high degree of put activity. But, what exactly is a put option? Puts are options that give the buyer the right, though not the obligation, to sell the underlying shares at the strike price. Thus, you do not have to own the shares to buy a put. Only if you exercise your put option would you have to go out in the open market, buy the shares, and then sell the stock at the contract (strike) price. In other words, a put buyer is generally pessimistic on a stock, expecting the shares to fall before the option expires. This week's filter on Zacks lists stocks that are experiencing heavy put option volume in excess of their average during the past month. Each record displays volume from the previous trading sessions, average one-month volume, and the daily volume ratio (daily ratio / monthly average). Before 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 want 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. In scanning the list based on Thursday's trading activity, the guru of digital music players and purveyor of MacBooks, Apple (AAPL) rose to the top of the listing. The equity had more than 200,118 puts cross the tape on Thursday, which was more than three times the stock's average daily trading volume. This recent attention to put options has seen the stock's Schaeffer's put/call open interest ratio (SOIR) rise during the past couple of weeks. This ratio compares put open interest among options with less than three months until expiration against call open interest. Readings above 1.0 indicate that put open interest is larger than call open interest. AAPL's SOIR rested at a mediocre 0.89 in the 44th percentile on Sep 24, but the result of the heavy put activity has forced this ratio steadily higher to today's perch at 0.94 in the 63rd percentile. While this reading is far from a bearish extreme, rising pessimism on an outperforming stock is a bullish sign from a contrarian perspective. However, pessimism is far from pervasive when it comes to AAPL. Our next sentiment indicator focuses on short sellers. Shorting a stock means that you are selling it with the intention of buying it back later at a lower cost. Basically, you are betting that the shares will go down. In September, the number of AAPL shares sold short declined by 12.5% to 22.57 million shares, accounting for a measly 2.63% of the stock's total float (or shares available for public trading). At the stock's average daily trading volume, it would take less than one day to buy back these bearish bets. While these figures are rather uninspiring, should the short-covering activity spill over from September, we could see a smidgen of buying pressure added to AAPL shares. However, I would not bank on this as a contrarian driver for any trade. Another sentiment indicator that I like to look at involves analyst ratings. Upgrades and downgrades from the brokerage firms on Wall Street can be influential drivers for buying or selling pressure on a particular stock. By looking at the current ratings on an equity, we can judge the likelihood, or potential, for a shift in analyst sentiment. Currently, Zacks reports that 14 of the 18 analysts covering AAPL rate the shares a "buy" or better. With only four brokerage firms offering up a "hold" rating, and no "sells" to be found, there is plenty of downside potential from the brokerage bunch. Still, AAPL remains a favorite on the Street, and downgrades on an outperforming stock are less likely to occur. However, contrarian investors will want to keep the brokerage bunch in their sights when dealing with Apple, as any shift in sentiment could well be to the downside. Technically speaking, the lingering bullish sentiment toward Apple is muted, while the growing pessimism among options speculators could indicate a continued rise in the shares. Since the beginning of the year, AAPL has rallied more than 92% along the support of its 10-day and 20-day moving averages. Currently, the shares are challenging potential overhead resistance at the 160 level, as they continue to set a string of fresh all-time highs. On a longer-term basis, AAPL is trading in no-man's land, with only investors and psychological levels to act as resistance. The shares have easily outpaced their 10-month and 20-month moving averages, with the former currently resting in the 120 region. While some could argue that a pullback to these trendlines could be in order as a way to consolidate recent gains, there is still potential support at the 150 and 140 levels before a such a decline could manifest. Make sure to continue utilizing all of the valuable filters on these pages for more money-making ideas. Moreover, don't be afraid to make a few paper trades in order to see what strategy works best for you. Please remember that, when it comes to options, the majority of your trades are going to be losers. Don't get discouraged, because that's the beauty of the leverage that options provide. It takes only a few winners out of every 10 trades to make you a very happy investor. Thanks for reading, best of luck in your trading! To learn more about the Put/Call Open Interest Ratio 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: RebelPOW (Rank #22 with $189,952) LEARNING TO SPOT MARKET OPPORTUNITIES All of those factors will keep China's growth strong in the short and long term. Now an interesting twist is that China is preparing... Read More or Comment on this post. Java J >> Java's Market Musings #152 << Read More or Comment on this post. Beris (Rank #46 with $171,694) PLAY IT SAFE (IM) 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. FREE PORTFOLIO TRACKER Do you believe that these events affect stock prices?
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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% |
| MARRIOT VAC | VAC | 3.27% |
| BLOOMIN' | BLMN | 2.93% |
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