Thursday - October 14, 2004
 Want to view the archive of past issues? Go here. Get Profit from the Pros content in Real Time. Learn more about this free tool at: http://at.zacks.com/?id=1517. Manage Profit from the Pros subscription: 1. LETTER FROM THE EDITOR Dear Customer, We are proud to announce the launch of the new Mutual Fund section on Zacks.com. http://at.zacks.com/?id=1581 In keeping with our theme, “Profit from the Pros”, we have focused this section on how you can profit from mutual fund experts. Here is what you’ll find: 1) Commentary and Recommendations: We have partnered with leading newsletter experts with track records of superior performance in the mutual fund sector. Here you will find their latest insights and advice. 2) Top Performing Funds: Discover the top performing mutual funds by category. 3) Mutual Fund Screening: Use one of the most robust free mutual screening tools on the web to find funds that exactly meet your needs. 4) Profile & Performance Research Reports: We have detailed research reports available for all mutual funds. Just enter the ticker in the research box on Zacks.com and press go. That will take you to the "Profile" report. From there you can also reach the "Performance" report that goes in depth on past performance of the fund. In the near future we will also start providing exclusive interviews with top mutual fund managers and share their insights with you. Plus we are creating a unique Zacks ranking system for mutual funds that will provide indications of future performance (instead of just telling you how well they did in the past). Stay tuned! You can access this information anytime from our Mutual Funds home page. Go to Zacks.com, click the “Research” tab, then “Funds”. Or bookmark this page for future reference: http://at.zacks.com/?id=1581. 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.
The Primary Trend The consistently inconsistent market is once again acting inconsistently. In the past nine trading days, as best seen on the hourly chart, the S&P 500 has gone from oversold to overbought, and then back to oversold. If you have the feeling that trading this market is a bit like riding a roller coaster, then you're likely not alone. The market's recent signals have been mixed, and in many cases even contradictory. On Monday, October 4th, the S&P 500 broke its Intermediate downtrend line near 1135. That event was a strong technical positive. On Wednesday, the index then closed at 1142.05 -- it's highest finish since late June. That was just two points away from the technically significant closing peak of 1144.06, which the S&P set on June 23rd. A close above 1144.06 would have reversed the pattern of declining peaks and declining valleys that has been in force since March. It didn't happen. On Thursday, the fundamental worries that the market had chosen to ignore finally caught up with it. The S&P retreated swiftly from the 1144.06 breakout level, taking the other major averages along for the ride. Friday's job creation number, which came in at an increase of 96,000 jobs -- weaker than the consensus estimate for a gain of 138,000 -- did little to help matters. Meanwhile, oil prices trading above $53 put another nail in the coffin. The market was weak all day with the previously strong semiconductor stocks leading the way down with a decline of -3.5%. Despite the sell-off of the past two trading days, the short- term trend remains up – for the time being! A trendline that connects the S&P's August 13th low at 1060.72 with its September 28th bottom of 1101.29 now intersects the chart at approximately 1117. There is also a ledge of support at 1120 – an area that has previously served as both support and resistance on a large number of occasions. The 200-day moving average on the S&P is immediately below 1120 at 1119. If the S&P breaks 1117, then it would break an uptrend line that slopes at approximately a 45- degree angle. That would be a major setback for the bulls since it would sideswipe the market's current attempt to resolve the prolonged Intermediate decline to the upside. More. . .
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - On the weekly chart of the S&P 500, the last five days formed an ugly looking shooting star-like candle. The large upper shadow provides visual verification that the probe of breakout levels near 1144 caused the market altitude sickness. The S&P is managing to hold just above its declining 30-week moving average and its rising 40-week moving average. The death cross remains in effect, with the 40-week moving average at 1120 and the 10- week at 1106. However, the 10-week moving average is now rising. With this in mind, it will be revealing to see whether the index can undo this signal. Dr. Melvin Pasternak and his team entered a long position in 3M Company (NYSE: MMM ) through a "buy on stop" order on Thursday, October 7th. The stock bullishly gapped up at the opening bell, starting the session at $82. However, the shares then dropped steadily throughout the day as the broad markets retreated. He entered the trade at the limit price of $81.40. On Friday, MMM declined another $0.40, although it was a bit stronger than the overall market. MMM hit a low of $77.20 in mid-August and then rallied to a peak of $84.96 in early September. From there it retreated to $77.69 on September 28th, creating a potential double bottom. A very shallow trendline drawn off the $77.69 bottom now intersects the chart at about $78.30. If the S&P holds trendline support near 1117, then Dr. Pasternak expects MMM to remain above this level. Dr. Pasternak has set his stop loss a penny below the stock's September 27th bottom at $77.69. If the market strengthens, then he believes 3M will show good relative strength. If it can take out its $84.96 high, then it should move toward $90. Williams Companies (NYSE: WMB): Dr. Pasternak and his team highlighted WMB last week when the shares were trading at $12.48. The company is an explorer, developer and transporter of natural gas. The stock had consolidated in an extremely narrow range between $11.36 and $12.67 since June 2004. WMB hit a high of $13 this week before pulling back. ADX and MACD remain on buy signals. Watch for a pullback to the $12.50-$12.75 level, as this could provide a solid buying opportunity. Websense (NASDAQ: WBSN): Dr. Pasternak highlighted Websense several weeks ago when the shares were trading at $39.95. Since that time WBSN has traded as high as $45.15 and as low as $39.54. The company makes software that allows employers to monitor their employees' computer use. The stock is in a strong stage II uptrend and is trading above a rising 50-day moving average, which is now at $39.18. WBSN should have good support near $42. If it can overcome resistance at $45, then the next major level of resistance would be $50. Cognizant (NASDAQ: CTSH): Dr. Pasternak first flagged Cognizant when the shares were at $29.49. The stock has been showing excellent strength relative to the market for over a month. CTSH's rising 30-day moving average is at $28.95 and its rising 50-day moving average is at $27.73. There is also lateral support at $28. If the stock retreats that far, then it will be worth looking at very closely if the technicals confirm a long trade. With just a few short-term trades each month, using a small portion of your portfolio, you can boost your total portfolio returns to levels not seen since the Internet craze. Discover how and receive the free five-part course, --``Swing Trading Done Right: The Secrets to Putting the Odds in Your Favor.`` Learn more about this newsletter and free trial offer at: http://at.zacks.com/?id=269. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - b) A Jobs Creation Act that Doesn`t Create Jobs The Senate recently passed a jobs creation act that Adam
Oliensis believes missed the mark. Get the expert`s take on this
new corporate tax break, and learn why the market may be
psychologically ready to rally. More... Gregory Spear reviews the market`s predicament - overbought and
vulnerable to weak guidance - and highlights how and why to
protect investment capital right now. More... d) Equities and Oil Markets Play Chicken Richard Rhodes details the inverse relationship between equities
and the oil market and outlines his strategy for moving from
short to long depending on what the oil markets do. More... It`s flu season again, but one of the largest vaccine makers
will not have a leading product available to the public this
year. Nadine Wong explains this company`s setback, how it will
impact its full year earnings, and what investors should do
about it. More... Bernie Schaeffer says we are in the midst of a high-risk market.
Learn this expert`s definition of `high risk,` and how it
differs from that of Wall Street. Then discover how to maneuver
in this type of environment with Bernie`s market and option
analysis. 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. Hybrid Approaches to Investing Value investing is often considered less exciting than aggressive growth or technical trading approaches. However, combining traditional approaches through screening parameters can reveal an intersection of stocks that are likely to perform well. “Growth at a Reasonable Price” and “Consensus” are examples of these hybrid approaches, though some are less conventional. Read on to discover hybrid strategies the experts are employing right now and top stock revealed through those screens. Investors know that earnings growth are on the decline and will continue to do so into 2005. After four quarters of 20%+ earnings growth, Zacks expects earnings growth to slow to the low to mid-teens in the third and fourth quarters. Many claim that the market is not fully discounting the absolute levels of earnings growth, yet others claim there is simply less upside to stocks right now. When investors see little upside to the broad market due to earnings or economic weakness, they tend to migrate to value related stocks. The reason is that the value represents intrinsic upside to the share price relative to what the company is actually worth. 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 Return on Equity as Part of a Winning Stock Picking Strategy Kevin Matras explains his ‘Return on Equity’ (ROE) strategy that
showed an average annualized gross return of over 89% in 2002
and 110% in 2003. And so far in 2004, the avg. return YTD is up
over 25%. See how and get three new top picks. More... ALL STAR TOP PICKS Profiting from High Oil Prices Exceptionally high commodity prices have benefited oil exploration and production companies, and the All Stars can help you get a piece of the action with five recommendations from this thriving industry. More... 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 Parker Hannifin (PH) - Robust Top-Line Growth TeleTech Holdings (TTEC) - Expect Margin Pressures Wireless Still the Place to Be in Telecom Finally, Some Stability in Electronics Third Quarter Earnings Season is Under Way
5. TRADING STRATEGIES: 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… This strategy uses the PEG Ratio to find attractively priced stocks poised for price appreciation. The PEG Ratio is simply the P/E (Price divided by Earnings) of a stock divided by its 5 year projected growth rate. Too often investors think of value investing being the antithesis of growth investing. The beauty of using PEG is that you can find value stocks even amongst hot growth stocks. Let’s take a closer look. A company with a P/E Ratio of 20 and a Growth Rate of 10% will have a PEG Ratio of 2.0 (20 / 10 = 2.0). While a company with a P/E Ratio of 40 and a Growth Rate of 50% will have a PEG Ratio of only 0.8 ( 40 / 50 = 0.8) The stock with the P/E of 40 is actually the better bargain since its PEG Ratio is lower (0.8) implying it’s undervalued with more upside potential. In general, a PEG value of less than 1 is considered undervalued while greater than 1 is thought to be fully valued to overvalued. The lower the PEG, the better the value, because the investor would be paying less for each unit of earnings growth. If you like to use a company`s PE ratio to determine its value, you`ll love using the PEG ratio. Value investing may be boring to some, but a +114.4% return in 2003 and +13.5% 2004 YTD may create many converts to this Profit Track. Advanced Power Technology, Inc. (NASDAQ: APTI) is a leading designer, manufacturer and marketer of high-performance power semiconductors. The company has managed to string together positive earnings momentum in a very difficult semiconductor environment, and will announce 3rd quarter earnings on October 21. However, over the last 30 days, the consensus estimate for APTI’s FY ’04 moved higher by $0.04 to $0.54, and for FY 2005 by $0.05 to $0.68. To continue your research on APTI, click here. Centex Corporation (NYSE: CTX) is the nation's premier company in building and related services: Home Building, Home Services, Financial Services, Contracting and Construction Services, Construction Products and Investment Real Estate. The company reported its Q1 ’05 earnings $0.05 ahead of consensus and raised guidance on improved sale prices and margins. The company is set to grow its community count, which should deliver more upside. To continue your research on CTX, click here. Metals USA (NASDAQ: MUSA) is a leading North American metals distributor and processor. Metals USA, Inc. provides a wide range of products and services in the Carbon Plates and Shapes, Flat Rolled Products, and Building Products markets. The analyst that follows the company recently raised estimates by $0.31 and $0.42 for next year based on unexpected strength in the hot- rolled steel market. The company’s P/E is just 6.58x earnings, and its PEG ratio is 0.22. To continue your research on MUSA, click here. All the Profit Track strategies were created and backtested using the Research Wizard software from Zacks Investment Research. If you like this Upgrades and Revisions strategy, but want to narrow down the list of stocks and even improve the performance, then you should start a free trial to the this powerful stock picking tool. Learn more about the Research Wizard and Free Trial offer at: http://at.zacks.com/?id=1370 6. ZacksAdvisor.com TIMELY BUY of the WEEK Autodesk (ADSK) Autodesk has creative designs on moving past the desks of architects. The company is a provider of computer-aided design (CAD) software. Its flagship AutoCAD product is used primarily by architects and engineers to design, draft, and model products and buildings. Autodesk's other products include geographic information systems for mapping and precision drawing software for drafting. The company also develops multimedia tools for digital content creation, including applications for animation, film editing, and creating special effects. Autodesk in late 2003 said it would cut costs by closing offices and laying off up to 650 employees, or about 18% of its workforce. According to company statistics, Autodesk is the sixth largest PC software company in the world with over five million users of its products worldwide. The company’s flagship AutoCAD product is the leading, fully automated design and drafting platform in the industry in terms of market share, with an installed base of over three million users. Autodesk’s main markets are extremely competitive, as barriers to entry are low and technology is changing rapidly.
Autodesk has worked to reduce volatility in top-line growth by committing to yearly upgrades for AutoCAD. Perhaps more importantly for the long-term, Autodesk introduced a subscription program for its AutoCAD customers last year. While revenue from the subscription program remains relatively small, adoption rates appear to be accelerating, as exhibited by impressive year-over-year growth in subscription revenue and bookings during the fourth quarter. We believe Autodesk is well positioned for additional upside as it enters fiscal 2005. The company is building momentum as it introduces new products and continues through the current AutoCAD upgrade cycle, which is a traditional driver of the stock. In addition, the company is just beginning to benefit from an increased focus on operating profitability, which combined with improved revenue growth, is leading to enhanced operational leverage. Longer term, we believe that the success of the AutoCAD subscription program and annual upgrades for AutoCAD should lead to increased visibility and reduced volatility for revenue and earnings.
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. *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 05/23/2013
| Company Name | Symbol | %Change |
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| ALLIANCE FIB | AFOP | 5.21% |
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