Tuesday - November 27, 2007
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Dear Subscriber, Our Senior Retail Analyst, Robert Plaza, CFA, discussed Black Friday sales on the Analyst Blog yesterday. I want to share with you a few of his thoughts: "The initial reports for Black Friday sales indicate that retailers got off to a strong start for the Holiday season. According to Shopper-Trak, sales jumped 8.3% year-over-year with Black Friday sales coming in around $10.3 billion. Driving this uptick were deep discounts and early-bird specials that encouraged shoppers to show up in the pre-dawn hours. Growth slowed to 5.4% on Saturday, as fewer "door- buster" deals were available. These headline numbers are above expectations. "Despite the bright headline numbers, I remain concerned with the holiday season. There are warning signs that point to a not-so-hot holiday season. I was surprised to see retailers open on Thanksgiving Day or open as early as midnight on Friday. Of course, the huge discounts on what should be popular products caught my attention. In Chicago's western suburbs, I witnessed crowded stores on Friday and normal to light traffic on Saturday/Sunday. What's more, the National Retail Federation reported that consumers spent an average of $347.44, which was 3.5% lower than the Thanksgiving weekend in 2006. This is curious as the NRF said that store visits increased 4.8% in 2007. It is clear that consumers bought lower-priced discounted items such as digital photo frames or GPS gadgets compared to higher-priced big screen TVs like last year." You can read Rob's full analysis of the holiday shopping season. Wishing you prosperity, Charles Rotblut, CFA 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 - Genlyte (GLYT) Perrigo Company (PRGO) is the nations largest manufacturer of store brand over-the-counter non-prescription) pharmaceutical products and also manufactures store brand nutritional products. The company's stock has had an amazing run since it gapped open higher on Nov 1, after reporting an awesome quarter. The company's profits for the quarter more than doubled from the same quarter last year. It also announced that its revenue increased by 12%. Within the last 30 days, three of four covering analysts have increased their current- quarter earnings projections. The consensus estimate now stand at a more bullish 34 cents, compared to 30 cents last month. Read the full analysis on PRGO now! ArcelorMittal (MT) is in talks with China Oriental Group Ltd. about increasing its stake in the Chinese steel products maker. ArcelorMittal bought a 28% stake in China Oriental for $647 million earlier this month. The Luxembourg-based steelmaker said in a statement Thursday it was in talks with controlling stakeholders in China Oriental about future cooperation and increasing its stake in the Hong Kong-listed company. It gave no further details. Read the full analysis on MT 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: Low Price Stocks Many investors prefer stocks priced below $20 because the low prices allow them to accumulate more shares. Fortunately, lower prices do not necessarily mean lower quality. This strategy identifies stocks priced below $20 that are trading at discount valuations and have a Zacks Rank of #1 ("Strong Buy") or #2 ("Buy"). The stocks identified by this search strategy trade at price-to-sales (P/S) multiples of 1.0 or below. The strong Zacks Rank is indicative of positive revisions in earnings estimates. Combining these characteristics can result in high-dollar returns. Here are four stocks that make the grade for the Low Price Stocks Profit Track: Advocat, Inc. (AVCA) is a specialty provider of workers'
compensation insurance focused on small- to mid-sized employers engaged in hazardous industries. The company's stock has had a fairly choppy year, but appears to have found its near-term bottom and has locked into a very steady upward trend. The company's excellent third quarter is certainly cause for acceleration, with income increasing by 53% to $3.9 million from the same quarter last year. Within the last 30 days the one covering analyst has increased current-quarter earnings estimates. The consensus estimate now stands at a more bullish 24 cents, up sharply from 16 cents. Advocat qualifies for this profit track with a current price at almost $11. Read the full analysis on AVCA now! CenterPoint Energy (CNP) is a domestic energy delivery company that includes electricity transmission and distribution, natural gas distribution and sales, and interstate pipeline and gathering operations. On Nov 2, the company reported a solid third quarter, which seems to have given its stock price a healthy boost. Net income rose 9.6% to $91 million, compared to the same quarter from last year. After the upbeat report, shares were able to accelerate beyond a key level of resistance just above $17. The great quarter is consistent with past performances, with the company meeting or beating analyst estimates for four consecutive quarters. In addition, three of the five covering analysts have raised current-year projections within the last 30 days, moving the consensus estimate higher to $1.10 from $1.07. Read the full analysis on CNP now! Horace Mann Educators Corporation (HMN) is a multiline insurance holding company that targets the US educator market. This company is definitely on the right side of the trend with its push higher to the upper side of the
$20 limit on this basket of stocks. Early in the month of November, shares were headed lower, but were able to find an area of support around $17 and have since rebounded very sharply. This initial dip lower came on the heels of a slightly weaker than expected quarter, reported on Oct 31. Since then, the stock has been strong and has regained most of the losses. Previous to the aforementioned quarter, the company had beaten estimates and surprised for three consecutive quarters. Read the full analysis on HMN now! HealthSpring Inc. (HS) is an independent Tennessee-based managed care organization, providing a comprehensive portfolio of healthcare benefit plans to employers in Tennessee. The company reported a solid third quarter on Oct 30 that pushed shares above the $20 level. Since then, shares have traded lower to a key level of support, around $17. With shares stabilizing above $17, the stock now looks well positioned to advance. Within the last 30 days four of nine covering analysts have raised their current-year earnings projections, up two cents to $1.47 per share. The company's profit margin easily outpaces its industry competition, coming in at 5.1% against 3.13%. Read the full analysis on HS now! To see the track details for 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. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Kevin Matras explains that stocks with new analyst coverage are stocks you want to own. More... 3. ZACKS EQUITY RESEARCH In what for most industries was a difficult third quarter earnings period, toy manufacturers took it on the chin harder than most. This was, of course, due to the plethora of toy recalls deemed unsafe because of high levels of such ingredients as lead paint. Joining us today is Sean P. Smith, senior equities analyst who covers the toy industry for Zacks. Is it fair to say the vast recalls in toys over the past few months is going to cause the toy industry to take a hit this holiday season? By how much, do you estimate? The extent of the impact related to the numerous toy recalls this year remains to be seen. According to a recent Harris Interactive poll, approximately one-third of Americans said they would buy fewer toys this season due to the recalls, while approximately 45% stated that they would avoid purchasing toys made in China. More. . .
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Whether consumers actually follow through on those statements, however, is another matter. We anticipate that certain product lines that were directly involved in the recalls will likely take a hit, but overall, we expect that the state of the economy will play a larger role in how holiday sales ultimately shake out. What are your general predictions for toy companies under coverage in 2008? First and foremost, we anticipate that the number of recalls will decline relative to 2007, at least at the major toy manufacturing companies. One impact of this year's recall activity has been the increased level of scrutiny with which the toy companies test their products, and monitor the operations of third-party manufacturers. As for investment performance in 2008, much will be determined by how the stocks react during this holiday season. Many of the stocks in the sector have pulled back substantially since the highs of the summer. If the companies experience relatively strong sales this holiday season, it could lead to some attractive valuations and intriguing buying opportunities going forward. Any Strong Buys or Strong Sells you'd care to mention for us? We currently remain neutral on the group, preferring to wait on the sideline while a clearer picture of the holiday season takes shape. Most of the stocks in the industry - the biggest being, of course, Mattel (MAT) and Hasbro (HAS) - have held relatively steady over the past few months, and we anticipate that investors will have the opportunity to establish new positions in the shares should the outlook improve. Certainly, the valuations in the group are more attractive than they were six months ago, and we continue to monitor the group for potential changes to our opinion. To read the complete Analyst Interview, click here. Sean P. Smith is a senior analyst covering the travel and leisure industry markets for Zacks Equity Research. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Real-time market insights from Zacks Equity Research Analysts.Stocks featured recently include Washington Mutual (WM), Focus Media Holding (FMCN), Nordstrom (JWN) and Sanmina-SCI Corporation (SANM). Get their latest posts: click here. SABESP (SBS) - Nice Entry Point. For full Zacks research report, click here. Dillard's (DDS) - Difficult Environment. For full Zacks research report, click here. Listen to the audio podcast for Earnings Preview through Zacks' Audio Feature. The Week of Nov 26 - Nov 30 Median EPS Growth Strong 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. Free Online Options Research on Zacks.com. Zacks/Schaeffer’s Options Trading service. Here is this week's article on how Schaeffer's Tools can help you Profit with Options. Wal-Mart Stores (WMT) was featured last week as it showed up on the Zacks Most Active Options Filter. This week, let's shift our focus and take a look at an old favorite: Zacks' Put/Call Ratio Greater than 1.0 filter. This filter brought out a ticker that couldn't be ignored especially in light of the holiday) - EAT, which is the ticker for restaurant firm Brinker International. First, a word about the put/call open interest ratio, which is simply the ratio of total put open interest to total call open interest. We compute the Schaeffer's put/call open interest ratio (SOIR) based on open interest in the front three months only. These near-term options tend to attract a more speculative crowd, the sentiment of which is more useful for shorter-term trading. Before we dive any deeper into technicals and sentiment for EAT, a little background is in order. What is the filter? Well, let's first define a put and a call. A put is simply a bet that the underlying stock is going to move lower, while a call is a bet that the underlying stock is going to move higher. According to our Expectational Analysis methodology, heavy attention paid to puts by investors indicates an increase in pessimism toward an equity, and can present the opportunity for a solid bullish addition to your portfolio. Before looking at EAT specifically, let's address our Schaeffer's methodology. As mentioned above, we are contrarian-based investors, which means 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. Back on the 12th of November, Brinker International announced that its fiscal first-quarter net income dropped to $38.5 million, or 35 cents per share. A year ago, the firm earned 32 cents per share. Brinker stated that its Macaroni Grill, which it is selling, was recorded as discontinued operations. Revenue for the quarter increased to $895.1 million from $869.3 million. So, Brinker International sports a SOIR of 4.05, which is higher than 98% of those take during the past 52 weeks. Just because I am a contrarian doesn't mean that I naturally assume that the speculative options crowd is wrong . . . there has to be a reason for this pessimism, right? That said, I wasn't surprised to see that the shares have been locked in a downtrend since May. However, there are a couple of reasons to think that we could see a bit of a turnaround. Let's deal with the technical possibilities for EAT. Yes, a downtrend is a downtrend, and that isn't a good thing . . . however, the stock is battling with its 80-month moving average. I wouldn't go betting on the shares finishing November below this trendline. The last time the stock finished below this trendline was, well, never. All of that said, the stock is poised to finish November below this trendline. So, what potential support is there for EAT? Well, the 22 level could step up as well. In 2005, we saw the 22 level act as support and help boost the shares. The concern here is if the potential support at 22 can't stand up to the current downtrend. Of course, the 20 level has provided support several times in the past, but the shares would lose quite a bit of their remaining value if the stock drops to 20. So, other than potential technical support, why is EAT an attractive contrarian play? Well, one reason is that the potential for a short-covering rally is rather high. Yes, five analysts rate EAT a "strong buy," but seven rate it a "hold," and one rates it a "strong sell." This configuration suggests that there is plenty of room for upgrades, which could pull the shares higher. The question is, will there be good enough news to spark upgrades? Speaking of good news, any scent of positive news in the air could send the bears scrambling, which could push the shares higher. Currently, 6% of the equity's float is sold short, which could send the shares higher if the pessimistic short sellers need to cover their negative positions. If a short- covering rally comes to pass, it could last five days. Is EAT a value play? Only time will tell, I would monitor this stock and see how the month of November finishes. A close below 20 could spell disaster, on the other hand; a close above the 80-month moving average could signal that the stock is poised to regain its winning ways. 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 read more thoughts on the market, please visit the Schaeffer's Daily Market Blog section throughout the trading day. 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 PLATINUM GROUP METALS (PLG) Read More or Comment on this post. MackTheKnife ISEE INDEX: GOOD NEWS, BULLS, AND BAD NEWS, BEARS? Read More or Comment on this post. TheInstitutional DON'T TRUST THIS OVERSOLD RALLY - STAY DEFENSIVE! 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. Gain full access to all Zacks Rank resources 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 60,000 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 performance of the Zacks Rank portfolios shown above for annual and year-to-date periods are the linked monthly total returns (price changes + dividends) of equal weighted hypothetical portfolios, consisting of those stocks with the indicated Zacks Rank, assuming monthly rebalancing and zero transaction costs. These are not the returns of actual portfolios. The hypothetical portfolios were created at the beginning of each month from Jan 1988 forward based on the values of the Zacks Rank available to Zacks' clients before the beginning of each month. The portfolios created monthly from 1988 through September 2006 exclude ADRS and are comprised of stocks that have the indicated Zacks Rank and were covered by at least two analysts at the time of the stocks inclusion in the portfolio. Starting in October 2006 and going forward, the portfolios are comprised of all stocks with the indicated Zacks Rank and do not exclude ADRs, which is more reflective of the list of stocks that customers will find on the Zacks web sites. 2007 returns are for the period of Jan 1 - Jun 30, 2007. These performance numbers have been audited from 1995 through 2003 by Autschuler Melovan, a division of American Express Financial. 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 05/17/2013
| 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% |
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