Thursday - September 9, 2004
 Manage Profit from the Pros subscription: 1. LETTER FROM THE EDITOR Dear Customer, We recently conducted a customer survey to find ways to improve the value of our Profit from the Pros emails (PFP). The most glaring change we could make was in terms of timely delivery of commentary. In the past we had 3 weekly versions of Profit from the Pros Given that they were unique emails, then we would hold certain commentaries for up to a week to place into that specific PFP version. From the survey, customers made it clear that they could barely distinguish between the 3 versions and overwhelmingly would prefer to have content delivered immediately. The solution to this problem will take 2 forms. 1) Improved PFP Email Format: Going forward there is only 1 version of Profit from the Pros that is sent 3 times per week. Each of these emails will contain the timeliest commentary available from Zacks.com. No more waiting a week for pertinent information to arrive. While we were in “improvement mode” we also changed some of the content pieces to further the mission to help you Profit from the Pros. 2) Real Time Alerts: We have partnered with Forbes.com to create a simple, yet powerful software application that delivers the investment content you want in real time to your computer desktop. We are only a couple weeks away from launch. Stay tuned! We hope these changes meet your needs for more timely delivery of investment information. Feel free to drop me a note with any feedback. Best Regards, Stephen Reitmeister 2. FEATURED EXPERTS Here we cast the spotlight on a timely Featured Expert commentary that recently appeared on Zacks.com. Following the article you will find previews of other profitable commentaries with insights and recommendations from leading investment experts.
According to Kelley Wright, editor of the Investment Quality Trends newsletter, investors are going to have to face the facts that the lofty expectations during the wild bubble years are no longer realistic. Therefore, they must change their investing patterns, which is not a very easily or painless thing to do. However, Wright and his team’s approach has proven effective in all types of market environments. In this featured expert, Wright explains this time of transition that investors have entered, and reiterated the importance of buying high-quality blue chip stocks at historic levels of undervalue. Afterwards, get two of his most recent stock profiles. Change is inevitable and not an option. How investors adjust and react to change will determine whether they reach their investment goals and objectives or experience disappointment. Investors get used to a routine and begin to have certain expectations. In fact, the financial planning industry is built on making projections and assumptions to develop cash flows and asset allocation models. Recent surveys suggest investors have certain expectations about the future return on equities, specifically that they will return at least 10% per year over the next decade. These expectations are reasonable if you consider from 1950 to 1995 the S&P 500 averaged annual returns of about 13%, and seem easily attainable when compared to the five wild bubble years from 1996 to 2000 when the S&P 500 returned 25% on average. In the Yogi Berra vernacular of macro economics, that was then and this is now. According to a recent piece in The Economist, returns for the S&P approaching 10%, let alone 13%, might not be as easy as some expect for two reasons. The first is that company profits tend to grow in concert with GDP (Gross Domestic Product). With globalization comes greater competition so profit margins should contract rather than expand further. Secondly, it seems unlikely that valuations would remain in the higher end of the range without consistently higher profit growth as an engine. Investor expectations that are based on the exceptionally high returns realized during the great bull market of 1982 to 2000 are unrealistic because those two decades of falling inflation and falling interest rates were extraordinary. The probability that inflation rates and interest rates continue to decline or remain at current depressed levels is low. Indeed, signs now point to a time of transition, or change if you prefer. This is where the resistance to change will be wreaking the most havoc. It is Kelley Wright’s belief that retirement plans invested solely in the stock indices will under perform. It is also his belief the next decade will be remembered as a “golden era” for the stock picker. Dividends will be more important than ever, especially with lowered expectations for capital growth. More. . .
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Wright’s approach, thankfully, will remain the same. Buying high-quality blue chip stocks at historic levels of undervalue has proven profitable for the last 39 years under diverse market conditions. Unless someone can make a persuasive argument otherwise, Wright and his team will just go with what they know. Change in the markets is inevitable, pain however is optional. Bring it on! In 1948, a farmer named Bob Evans began producing sausage for a local diner he owned in Ohio. The sausage became so popular that a new restaurant was soon launched featuring the sausage products. Now a publicly traded company with a market capitalization of almost a billion dollars, Bob Evans (NASDAQ: BOBE ) operates its chain of restaurants across 22 states. The company also continues the production and sale of its sausage and food products in 30 different states. The close of the most recent quarter brought discouraging news for BOBE shareholders. Rising prices for hogs and increasing fuel costs hurt earnings which fell 26% for the quarter to $0.40/share. The earnings outlook for 2005 was lowered to $1.60/share to $1.70/share, shy of the previous $1.86 consensus estimate. Revised numbers reflect the company’s continue concern over rising costs, which have the ability to drastically impact margins. During fiscal 2005, the company expects to open 40 new Bob Evans Restaurants, and 12 new Mimi’s Cafes. BOBE is also increasing plans for future marketing campaigns. Recent fears over rising costs and a lowered earnings outlook could provide yet another buying opportunity. An excellent balance sheet, and low payout ratio will add additional strength to the company as it undergoes any further declines. Additionally the company has expanded its reach with the recent acquisition of the Mimi’s chain. As one of the few restaurant chains that meet Wright’s criteria, shares of BOBE should become increasingly attractive as they near a historic high yield of 2.2%. Since 1969, Ruddick Corporation (NYSE: RDK ) has been the successful conglomeration of a chain of grocery stores and a commercial thread producer. The company’s unique variety of business has made it of interest to investors, as well as the company’s admirable record of dividend increase. The company’s subsidiaries are named Harris Teeter and American & Efird, which respectively represent the operations of RDK’s grocery and thread businesses. The close of the third quarter of fiscal 2004 brought an earnings increase for Ruddick, which has also seen a rise in sales. For the first nine months of 2004, consolidated net income came in at $1.00 per diluted share, compared to $0.94 per diluted share during the same period of 2003. At Harris Teeter, operating profit increased by 10%, while American & Efird operating profit fell 15%. Declines in American & Efird can be mainly attributed to slowdowns in the apparel industry, resulting in weak sales over the past year. Recent launches of a number of private label food programs such as Harris Teeter Farmers Market and Harris Teeter Fishermans Market have helped build customer loyalty and increase the company’s market share. Since Wright and his team last featured RDK at $13/share in First-February ’03, the company has had very impressive gains. Returning slowdowns in apparel growth rates, and very strong competition from Wal-Mart and other grocers should provide another buying opportunity in the near future. Based on the current annual dividend of $0.40/share, shares of RDK will enter Undervalue at approximately $17.50/share. Investment Quality Trends is the #1 performing newsletter on a risk-adjusted basis for the past 15 years -- through 1/31/2001 according to industry watchdog, Mark Hulbert, who ranks the top performers in the investment newsletter industry. Find out why we`re #1. Learn more about this newsletter and free trial offer at: http://at.zacks.com/?id=170. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Price Headley reviews the chart strength of various
international regions and recommends top-performing sector
funds. More... c) Going Long Richard Rhodes isn`t ready to offer a broad bearish program, but
has instead decided to lean toward long positions. Find out why
this expert`s perspective is neutral right now, and learn about
some of his trading positions and stocks to watch. More... d) The Countertrend Rally Continues Dr. Melvin Pasternak says we`re in a countertrend rally, and its
resting on thin ice. Learn what the market has to do to break
this mold, and then discover two of this expert`s picks for the
week along with three stocks to watch. More... Featured Expert articles are courtesy of the 60+ leading investment newsletters that have partnered with us to create the Zacks Expert Advice service. Check out the Experts section of Zacks.com daily to find profitable stock picks and timely market commentary at: http://at.zacks.com/?id=637.
3. WEEKLY COMMENTARY: Experts Watch Zacks.com offers 3 unique weekly commentaries that all further
our mission to help you Profit from the Pros. Today is the
latest installment of Experts Watch from Trace Johnson. Each
week Trace shares winning strategies from leading investment
experts to outperform in any market environment. Checking in with the Dow Theorists All of the major indices have been in fairly clear downtrend patterns over the last couple of months. Each new rally has started at lower levels and the tops have not come to previous highs. In August, most of them violated their spring time lows leading many analysts to call a new bear market. Yet, the Dow Theorists, who arguably have one of the best holistic views on the market and economy, see a different picture playing out. While they are by no means breaking out their market cheerleading pom poms, they do see a compelling case for remaining in a market that should have more upside. Get the bullish and bearish cases, proper cash allocations and long term stock picks from two top Dow Theorists. Jack Schannep, editor of Schannep’s Timing Indicator & theDowTheory, concedes that the downward staircase patter he sees on the Dow Industrials is disconcerting. Yet, down trend channels do no necessarily a bear market make. Schannep points out that the entire distance from top to bottom in the recent fall is only an 8.6% move. That is not even a correction by most standards, including Schannep’s own. Schannep cautions that many analysts and traders look only at the NASDAQ, but informs readers that the NASDAQ is not a proxy for the entire market as the other major indices are. The NASDAQ did make a slide that was 6.7% below its May lows, which created fear among many, but the NYSE Composite was all of 0.2% lower. More...
And More... Click here to read the full article with commentary and
recommendations from leading market experts. http://at.zacks.com/?id=14 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - SCREEN OF THE WEEK Cheap Stocks and Big Returns Kevin Matras goes over one of his favorite strategies for
finding cheap stocks with big returns. So far this year, it is
up 25.1%. Find out how and get this week’s top picks. http://at.zacks.com/?id=1410 ALL STAR TOP PICKS Better Reception for Telecom Equipment Renewed interest in cell phones has helped to upgrade the telecom equipment industry, and the All Stars have five recommendations to connect you with this enterprising space. http://at.zacks.com/?id=1411 4. BEST OF ZACKS INDEPENDENT RESEARCH The analysts from Zacks Independent Research create a mountain of insightful equity research everyday of the week. Here you will find the best of that information recently published on Zacks.com. BULL OF THE DAY Harman International (HAR) Wilson Greatbatch (GB) Bright Spots in Overseas Tech Business Services Industry Outlook - Neutral Zacks Model Portfolio – Focus List
5. TRADING STRATEGIES: Model Portfolios 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 feature our 2 exclusive model portfolios on Zacks.com (All Star Analyst and Brokerage Buy List). See below for highlighted stocks currently in these profitable portfolios. This exclusive portfolio contains only those stocks recommended by 5 or more of the best stock pickers on Wall Street based upon performance (aka All Star Analysts). Here are 2 stocks currently appearing in the All Star Analyst Portfolio. Lowe's Companies, Inc. (NYSE: LOW) is the world's second-largest home improvement retailer. The economy kept rolling along in the second quarter, evidenced by Lowe’s record numbers. The company reported net earnings of $704 million for the quarter ended July 30, 2004, a +17.9% increase over the same period a year ago. Diluted earnings per share increased +18.7% to 89 cents from 75 cents in the second quarter of 2003. Sales for the quarter increased +17.3% to $10.2 billion, up from $8.7 billion in the second quarter of 2003. Comparable store sales for the second quarter also increased +5.1%. Lowe’s stated that robust housing turnover, record home ownership, attractive mortgage rates and improving consumer confidence highlighted a solid performance in the second quarter where their stores delivered record earnings. Lowe's and several All Star Analysts believe Lowe’s is uniquely positioned to capitalize on the growth of the home improvement market. To continue your research on LOW, click here. Nextel Communications (NASDAQ: NXTL) is a leading provider of fully integrated, wireless communications services and has built the largest guaranteed, all-digital, wireless network in the country. Nextel announced strong financial and operating results for the second-quarter 2004, including record revenue, operating income before depreciation and amortization (OIBDA) and net income. Revenue was $3.3 billion, up +29% from last year's second-quarter revenue of $2.6 billion and OIBDA of $1.26 billion was up +25% from last year's second-quarter OIBDA of $1.0 billion. Second-quarter 2004 income was $1.3 billion, or $1.17 per share, up significantly from last year's second- quarter income of $281 million, or 27 cents per share. Second- quarter 2004 income includes a net tax benefit of $726 million, or 65 cents per share, resulting from the release of a significant portion of the accumulated net operating loss valuation allowance and an expense of $34 million, or 3 cents per share from the retirement of convertible debt during the quarter. Adjusting for these two items, second-quarter income was $608 million, or 55 cents per share, up +111% from last year's adjusted second-quarter income of $288 million, or 28 cents per share. Second-quarter results reflect continued progress on multiple fronts and the company believes they are on track to meet or exceed their 2004 guidance. With such positive results, it is clearer than ever that Nextel has the momentum to continue an upward climb it began last month.. To continue your research on NXTL, click here. Which brokerage analysts are the best stock pickers in their field and what stocks do they recommend today? Find out here with the Zacks All Star Analyst Survey, the best way to find those rare few analysts whose recommendations are worth following.http://at.zacks.com/?id=1420 Long-term investors take note. The stocks in the portfolio must be on the core recommended list of at least three of the top 14 brokerage firms. These stocks tend to be large-cap, "blue chip" companies and is for conservative, long-term investors. Applied Materials (NASDAQ: AMAT) is a semiconductor equipment maker that has received nothing but upward earnings estimate revisions over the last couple of months. Applied Materials reported results for its third fiscal quarter ended August 1, 2004. Net sales were $2.24 billion, up +11% from the second fiscal quarter of 2004, and up a whopping +104% from $1.09 billion for the third fiscal quarter of 2003. Net income for the third fiscal quarter of 2004 was $441 million, or 26 cents per share, up from net income of $373 million for the second fiscal quarter of 2004, and up from a net loss of ($37 million) for the third fiscal quarter of 2003. New orders of $2.46 billion for the third fiscal quarter of 2004 increased 11 percent from $2.21 billion for the second fiscal quarter of 2004, and increased 134 percent from $1.05 billion for the third fiscal quarter of 2003. These financial results demonstrate that Applied Materials is continuing to grow while delivering excellent profitability and productivity. The company stated that, "We are building on our technology leadership, introducing leading-edge products and entering new businesses to provide more capability to our customers.” This leads several top brokerage firms to recommend AMAT as a Core Holding to investors. To continue your research on AMAT, click here. PepsiCo, Inc. (NYSE: PEP) is a world leader in convenient foods and beverages. The company consists of the snack businesses of Frito-Lay North America and Frito-Lay International; the beverage businesses of Pepsi-Cola North America, Gatorade/Tropicana North America and PepsiCo Beverages International; and Quaker Foods North America, manufacturer and marketer of ready-to-eat cereals and other food products. PepsiCo announced that third quarter 2004 earnings conference call with financial analysts and investors will be Thursday, September 30th. Last week PepsiCo reinforced its positive guidance for the full year earnings, based on the strength of the PepsiCo portfolio. PepsiCo reaffirmed its 2004 full-year forecast to deliver at least $2.29 EPS, with cash from operating activities of about $4.9 billion and, after net capital expenditures, about $3.4 billion. Previously, the company recorded a strong second quarter with double-digit earnings per share growth of +12%, to 61 cents on a fully diluted basis. Top- line momentum continued as revenues grew +8%. Year to date, earnings per share were up +13% to $1.07, and revenues were up over +9%. The company’s outlook for 2004 remains very positive. This was music to investors’ ears and four of the top brokerage firms are currently recommending PEP as a Core Holding. To continue your research on OHB, click here. 6. OPTIONS CENTER Most Active Put Option Filter - What a HUGE volume of put options on Intel Corporation (INTC) over the last 3 days. Looking at the price action of the underlying, it would seem that the majority of this activity is actually liquidation of previously opened positions to lock in profits. INTC has a lot of options Open Interest accumulating on its as seen by the Schaeffer/Zacks’ High Open Interest Filter - Puts. Indeed this activity demonstrates a firm directional commitment on the part of investors as to a sharp move in the stock. In addition the Call side of the filter is ALSO showing a lot of interest. Upon closer examination we have noted that a lot of this call activity is the result of new positions. This could very well be a counter-trend sentiment read. That is investors are becoming increasing more bullish on a stock that is in decline. This offers a strong sentiment read that there is further downside potential in the stock. Both of these filters have brought Intel to the forefront of our interest. A powerful tech stock like Intel is just as vulnerable as any other stock. Intel was recently featured in a major weekly business publication that proclaimed its praises. As a true Contrarian, Bernie Schaeffer would use his Bearish viewpoint when analysis this stock. Further more Nick Perry and Kristen DePlatchett – research analysts for Schaeffer’s Investment Research have both highlighted Intel and their commentaries can really help us analyze the Intel options that we have discovered with our filters. With 50% of the analyst rating it a buy and the current trend of the stock’s decline maybe just the catalyst we are looking for the move the stock with further downside risk potential. Let’s try Intel with our compilation of filters and commentaries and take our Contrarian view to the bank – with the short side. Next week we will see how we did. We used our Schaeffer’s Option Filters combined with Schaeffer’s Commentaries to help us determine our next move. Be sure to use the filters and more at Zacks.com To learn more about the Open Interest Filter, click here. To learn more about the Most Active Options Filter, click here.
Recent Options Commentary from Zacks.com The stock market`s rallies over the past couple of weeks are
unlikely to continue, according to Dr. Edward Olmstead. This
expert`s long-term outlook is quite bearish, and therefore he
offers a few option trades to help you capitalize. More... b) Call Options to Capitalize on Bullish Bias A bullish bias may be in the works, and Ken Trester and his team
can help you harness the momentum through options. Learn about
two different types of call options, and make certain you don`t
miss a solid opportunity for higher returns. More... Discover all the tools and commentary available from the Zacks.com Options Center at: http://at.zacks.com/?id=1421. 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, our #5 Ranked stocks (Strong Sells) have 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 at: http://at.zacks.com/?id=1424. Or view the full list of Zacks #1 Ranked stocks at: http://at.zacks.com/?id=1423. 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, Stephen Reitmeister 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. 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 05/21/2013
| Company Name | Symbol | %Change |
|---|---|---|
| SUMMER INFAN | SUMR | 9.94% |
| SCIENTIFIC L | SCIL | 8.00% |
| NEW ORIENTAL | EDU | 5.80% |
| FEDERAL MOGU | FDML | 5.80% |
| NATUS MEDICA | BABY | 5.69% |
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