Tuesday - October 26, 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=1452. Manage Profit from the Pros subscription: 1. 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.
Executive Summary Once again, scandal has made the headlines of the business section. And, again, New York's attorney general, Eliot Spitzer, is spearheading the drive for the truth. When we last heard from Spitzer, he was taking the mutual fund industry to task. Last week he took on the insurance industry. It's too soon to tell who will get hurt the most by this investigation and what the long-term consequences are for the market. But the market has been battered in recent years by scandal after scandal and this isn't going to help things. Probably the market overall won't be affected, but anyone who owns insurance company or brokerage stocks are feeling the pain. Another piece of economic news that's also old hat may in fact affect the market overall. I'm talking about the price of oil, of course. Just when you thought it couldn't go higher, up it goes. It's at about record levels now, with futures hitting $55 a barrel. Note, in terms of inflation adjusted prices, oil hit its peak in 1981 when the price hit $80 a barrel in today's prices. The current rise came after an Energy Department report showed U.S. supplies of distillate fuel, which includes heating oil and diesel, shrank for a fifth straight week, heightening fears of a winter-fuels drought. Crude futures are now 81 percent more expensive than a year ago. The average residential price of heating oil is $1.99 per gallon nationwide, up 60.5 cents from a year ago. More. . .
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Earlier this week, two financial institutions, J.P. Morgan and Morgan Stanley, reduced their estimates for 2005 economic growth. Higher fuel costs, they said, would likely mean a slowdown in consumer demand. Bank of America (NYSE: BAC) closed its $1.4 billion acquisition of National Processing, Inc., creating the nation's second- largest bankcard merchant acquirer, representing approximately one of every five VISA and MasterCard transactions processed nationally. The company is now known as BA Merchant Services LLC. As a result of this acquisition, Bank of America becomes the No. 1 check processor, the No. 1 debit card issuer and the No. 4 credit card issuer in the United States. Re Group (NYSE: RE), a reinsurance company, reported that third-quarter profit fell 89 percent as the company was stretched by hurricanes in the southeastern United States and typhoons in Asia. The St. Michael, Barbados-based company earned $11.5 million, or 20 cents per share, in the three months ended Sept. 30, 2004. That's down from $100.3 million, or $1.77 per share, a year ago. Excluding realized gains and losses from investments, Everest earned $4.8 million, or 8 cents per share, in the latest quarter. Analysts surveyed by Thomson First Call predicted a loss of 35 cents per share in the latest quarter. Revenue rose 13 percent to $1.26 billion from $1.12 billion a year ago. In early October, the company said aggregate losses from hurricanes and typhoons would be about $120 million in the third quarter. The Bon-Ton Stores (NASDAQ: BONT) is a traditional department store retailer with a 106-year history of serving secondary markets. On October 24, 2003, the company, based in York, Penn., acquired The Elder-Beerman Stores Corp., nearly doubling its number of stores. Today, the Bon-Ton Stores operates 140 department stores and two furniture stores in 16 states, from the Northeast to the Midwest, under the Bon-Ton and Elder- Beerman names. Peter Lynch's methodology, based on John Reese’s understanding of it, considers BONT a "fast-grower." Fast growers are Lynch's favorite investments - relatively small, aggressive businesses that can grow 20 to 25 percent a year. For companies with sales greater than $1 billion (BONT's is $1.2 billion), this methodology likes to see that the P/E ratio remain below 40, because the larger a company gets, the more difficult a time it can have maintaining a growth high enough to support a P/E above this threshold. BONT's P/E, 10.87, is therefore acceptable. The investor, according to this strategy, should examine the P/E (10.87) relative to the growth rate (22.27%), based on the average of the three, four and five year historical EPS growth rates. This is a quick way of determining the fairness of the price. The best-case for Lynch is that the P/E is half or less than the growth rate. BONT fits this best-case scenario with a P/E/G ratio of 0.49. The free-cash-flow/price ratio, though not a requirement, is considered a bonus if it is above 35 percent. A positive cash flow (the higher the better) separates a wonderfully reliable investment from a shaky one. This methodology prefers not to invest in companies that rely heavily on capital spending. This ratio for BONT is 68.05 percent, which is high enough to add to the attractiveness of the stock. Invest with the confidence of knowing that your decisions have been validated by strategies of Wall Street legends that have proven to outperform the market. The Validea Hot List contains a portfolio of stocks that pass our interpretation of the strategies of the world’s most astute investment minds, including Graham, Lynch, Zweig, Buffett and others. Validea’s extensive research has shown that when these strategies agree, the result is market beating returns and low levels of risk. Learn more about this newsletter and free trial offer at: http://at.zacks.com/?id=707. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - b) Margin, Revenue Explosion for Communications Company Gregory Spear profiles a communications company that clears the
static from your calls and is firing on all cylinders in terms
of revenue growth and margin expansion. More... c) Robust Trends Create Margin Expansion for Electronics Retailer Ben Zacks reviews the investment thesis for his most recent
Focus List addition, a leading consumer electronics retailer. More... d) Activity Isn`t Always Positive Kelley Wright says successful investors understand that
declining markets are a signal of opportunity on the way. Make
sure you`re prepared to pounce on value when it is presented
through this expert`s market and stock analysis. More... Richard Lehmann says there`s money to be made on the yield
curve. Find out how you can take advantage of an overvalued bond
market through this expert`s analysis, and learn about a pair of
corporate bonds that might be to your liking. More... f) eBay`s Asian Inroads Take Shape eBay`s Asian strategy is underway, and Fred Hager says this will
be very significant for this well-run company. Learn about the
benefits of venturing into China, and afterwards discover the
industry-wide repercussions of the Vioxx story. 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=1340.
2. WEEKLY COMMENTARY: All Star Top Picks Zacks.com offers 3 unique weekly commentaries that all further
our mission to help you Profit from the Pros. Today we will
uncover the current top picks of 5 Star analysts in a hot sector
(aka All Star Top Picks). Why? First, it makes sense to tap into
industries that have potential to outperform the market. Second,
within that sector you want to be on board the stocks with the
best prospects. To help us uncover these top picks we employ the
keen insights of 5-Star analysts. Who are they? Check out the
"About Zacks All Star Analyst Survey" section below. This week we explore the Computer Software Industry The gigantic computer software industry has been in the news a lot recently, as many companies have issued warnings of the many challenges they face, including weak pricing. However, in a space as large as this one, there are always chances to make good, and many analysts consider the security software sector to be in a better position than its counterparts. Such strength has helped the computer software industry as a whole rise to a Zacks Industry Rank of 2.99, according to Nick Raich’s “Weekly Earnings and Sector Update,” which places it 91st out of more than 200 companies. The earnings season may only be partly over, but a number of security software companies have already proven that the faith of analysts has not been misplaced. Analysts went into the third quarter expecting most software companies to come in-line to slightly above expectations. They saw the environment as unchanged from the previous quarter, which left companies with little chance for breakout growth. Thus far, that assessment has been fulfilled, but there were some security companies that broke the mold. For example, VeriSign, Inc. (NASDAQ: VRSN) recently posted non- GAAP earnings per share of 19 cents, which beat the consensus by almost +19%, on revenue that reached $325 million. Continued growth in Internet and Telecommunications, combined with overachievement in its new mobile content business, contributed to the quarter. Also, its Security Services business launched a new offering in the authentication market. Symantec Corporation (NASDAQ: SYMC), which some analysts consider the most fundamentally-sound company in its space, reported fiscal second quarter earnings per share that was more than +5% atop the consensus. Also, in order to satisfy the consumer demand for computer protection, Symantec recently announced that its Norton Personal Firewall and Norton AntiVirus solutions will be preinstalled on all new HP Pavilion and Compaq Presario desktop PCs. Symantec is profiled below. The very real possibility of a computer virus crippling your computer has facilitated a need on both the consumer and business side for protection. Companies able to operate on both sides of the fence are among the best positioned to make profitable headway even during challenging environments. Investors must take the tough conditions into account before venturing into anything software-related. Analysts are your best security from getting caught off guard in a space where a significant number of companies are struggling. By incorporating their insights into your investment philosophy, you stand a great chance of picking out those companies that on solid ground with products in demand. There are already many hazards in cyberspace, but they don’t have to infect your portfolio. The answers to these questions are found in the remainder of this All Star Top Picks article at: http://at.zacks.com/?id=1451. To see the full All Star Survey with access to all ratings, research and stock picks, then visit: http://at.zacks.com/?id=12. These are the best stock picks from the best stock pickers in the business. This portfolio only includes stocks recommended by five or more of the 5-Star analysts based on stock picking performance. In 2003 it gained 46.6% nearly doubling the performance of the S&P 500. See the full portfolio at: http://at.zacks.com/?id=13. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Economic news forces investors to pay close attention to sector
trends. Discover two trends you may not be using in your
investment decisions. More... Kevin Matras looks at Cash Flows (and increasing Cash Flows) for
a winning stock picking strategy. Find out how it did over 62%
last year and how it’s beating the market again this year. We’ve
also got 3 of its newest picks for this week.. More... 3. 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 Deckers Outdoors (DECK) - UGG and Teva Driving Revenues Ethan Allen (ETH) - Current Price a Good Exit Point Electronic Manufacturing Starting to Integrate with Design Computer Hardware Y-O-Y Comparisons a Challenge Zacks` October Economic Outlook 4. TRADING STRATEGIES: Zacks #1 and #5 Additions 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… Zacks Rank #1 and #5 Additions The Zacks Rank is a powerful stock indicator whose #1 Strong Buys stocks have risen +33.1% on average annual return since 1988 vs. +12.0% for S&P 500. And just as important it tells you which stocks to sell now (Zacks #5). Since 1988 the S&P 500 has outperformed the Zacks #5 Ranked Strong Sells by 141.8% annually (11.97% vs. 4.95% respectively). Learn more about the Zacks Rank following this section. Below you will find all the stocks added to the Zacks #1 and #5 Ranked lists this week.
More. . .
Zacks #1 Rank List continued...
To see the full list of Zacks #1 Ranked stocks (approx. 200 stocks), then click here. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Zacks #5 Ranked List: 59 New Additions (alpha by ticker)
More. . .
Zacks #5 Rank List continued...
To see the full list of Zacks #5 Ranked stocks (approx. 200 stocks), then click here. 5. 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. Read below more on Schaeffer’s Tools to Profit with Options. Schaeffer’s Investment Research offers the Option Tool: Greek Montage on the Zacks research site. What may seem like Greek Speak to some is a very pivotal tool for the serious option trader. Simply put: The Greeks, detailed within the Greeks Montage, are a collection of statistical values that give the investor a better overall view of how you can expect an option to perform with respect to the underlying stock. When used to describe options, Greeks primarily compare the movement of an options theoretical price or its volatility in relation to the underlying stock’s change in price or volatility as the option nears expiration. These statistical values can be helpful in deciding which options strategies are best to use. In addition, as Schaeffer’s always suggests, it is good to use ANY option tool in correlation with other option tools to best determine your strategy. Use these additional market indicators as support of our Sentiment Tools to reinforce your market take. To learn more about the Greek Montage, click here. The earnings season complicates an already difficult trading
environment, but investors can still move forward by using
options. Dr. Edward Olmstead highlights an intermediate bearish
and bullish option trade that you may want to consider in this
volatile time. More... Jeff Carter and his team believe the market will rally in November,
but we have to get past the election first. Learn about the benefits
of LEAP options with a pair of recommendations from this expert. 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=1346. Or view the full list of Zacks #1 Ranked stocks at: http://at.zacks.com/?id=1353. 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 |
|---|---|---|
| ALLIANCE FIB | AFOP | 5.21% |
| CYNOSURE INC | CYNO | 4.42% |
| DAWSON GEOPH | DWSN | 4.33% |
| MARRIOTT VAC | VAC | 3.27% |
| BLOOMIN' | BLMN | 2.93% |
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