Wednesday - March 30, 2005
 Want to view the archive of past issues? Go here. Get the latest investment alert technology and receive the most up-to-date Profit from the Pros content as it’s published, in Real Time, with no waiting. Learn more about this free tool at: http://at.zacks.com/?id=1509. 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.
Since John Reese’s last issue, we’ve gone through a fairly active period. Let's look at inflation. Inflation at the wholesale level, as measured by the Labor Department's Producer Price Index, rose by 0.4 percent last month, the biggest increase in three months. This follows a 0.3 percent increase in January, a decline of 0.3 percent in December and a jump of 0.6 percent in November. Pressure on prices came primarily from food and energy. Aside from these areas, the so-called core rate of inflation rose 0.1 percent, which was much lower than January's core wholesale inflation rate of 0.8 percent, which was the highest in six years. Oil prices are near record highs. Commodity prices are surging. Food prices rose a strong 0.8 percent in February, after having fallen by 0.2 percent the month before. Against this background, the Federal Reserve on Tuesday (3/22) pushed up short-term interest rates by one-quarter of a percent to 2.75 percent. It was the seventh rate hike since last June, when the rate for overnight loans was 1 percent, a 46-year low. More. . .
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - During the previous rate hikes, the Fed said there might be a "measured" pace of future rate increases, which has been interpreted to mean a steady rate of moderate quarter-point increases. But this time, while the Fed used the word "measured" again, it seemed to signal that inflation may be more an issue than it had previously thought. The statement it issued said, "Though long-term inflation expectations remain well-contained, pressures on inflation have picked up in recent months and pricing power is more evident." Pricing power refers to the ability of businesses to pass on to their customers higher prices, which is a key driver of inflation. It also said that "upside and downside risks" to growth and inflation could be kept "roughly equal" only "with appropriate monetary policy action." It hasn't previously made such a statement, and it seems to be suggesting that future interest rate hikes may be larger than the quarter-point ones we've been having. The effects on the economy of this remains to be seen, but those parts of the economy sensitive to interest rates, such as bonds and real estate prices, may be in for some tougher times. Four stocks have been added to the Validea Hot List, including: Ambac Financial Group, Inc. (NYSE: ABK) is a holding company whose subsidiaries provide financial guarantee products and other financial services to clients in both the public and private sectors around the world. The Company and its subsidiaries operate in two segments: Financial guarantee and Financial services. The Company provides financial guarantees for public finance and structured finance obligations through its principal operating subsidiary, Ambac Assurance Corporation. Through its financial services subsidiaries, the Company provides financial and investment products, including investment agreements, interest rate and total return swaps and funding conduits, principally to its clients, which include municipalities and their authorities, school districts, healthcare organizations and asset-backed issuers. MBIA Inc. (NYSE: MBI) is engaged in providing financial guarantee insurance, investment management services, and municipal and other services to public finance, and structured finance clients on a global basis. The Company conducts its financial guarantee business through its wholly owned subsidiary, MBIA Insurance Corporation (MBIA Corp.) MBIA Corp. is the parent of MBIA Insurance Corp. of Illinois (MBIA Illinois) and Capital Markets Assurance Corporation (CapMAC), both financial guarantee companies. BIA Corp. also owns MBIA Assurance S.A. (MBIA Assurance), a French insurance company, which writes financial guarantee insurance in the member countries of the European Union and MBIA UK Insurance Limited (MBIA UK), a financial guaranty insurance company licensed in the United Kingdom. The Company also provides investment management products and financial services. 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. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Bernie Schaeffer explains that the consumer price index
increase supported the Fed’s muted warning of inflation and the
dollar hit a new six-week high against the Euro. Benefit from
this expert’s analysis and read about his Featured Stock. More... Based on the premise that there is always a bull market
somewhere, Gregory Spear ponders the key question of `where
will institutional capital be allocated next?` Benefit from
this expert`s ideas and read about two healthcare stocks. More... d) Struggling Digital Impact Taken Out at Big Premium The online arena has experienced increased buyout activity from
offline companies. Bill Martin and Matt Ragas highlight this
consolidation and break down one of the most recent
combinations. More... e) General Motors is Shrinking Fast General Motors has had a tough time of late. Ian Wyatt and his
team discuss what is ailing the world’s leading automobile
manufacture. More... f) Are We on the Verge of Economic Contraction? Dennis Slothower says the market has been unable to sustain a
trend beyond a few months. Find out what could be on the
horizon and why this expert continues to recommend caution. 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=1386.
2. WEEKLY COMMENTARY: Screen of the Week 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 Screen of the Week from Kevin Matras.
Each week Kevin shares with you another winning screen he has
discovered using the Research Wizard software from Zacks
Investment Research. Learn more about the Research Wizard at: http://at.zacks.com/?id=1388. “A Simple Dividend Strategy with Extraordinary Returns” This week, I’m going to focus on a simple dividend strategy that has produced some amazing results over the last few years. Since it’s a dividend paying strategy, I’ve incorporated a longer holding period (12-24 weeks). This strategy is both easy to build and easy to use with the Research Wizard. The parameters to this screen are as follows: Price >= $10 Market Cap >= $500 mil. Zacks Rank <= 3 (1, 2 or 3 -- no sell ratings allowed) Current Dividend Yield >= 8% I ran a series of tests using a 24 week holding period over the last 4 years. Each test was started on a different start date to eliminate coincidental performance and to verify robustness. What I found was that every test showed impressive results. In 2001, the average annualized gross return was 29.8%. In 2002, the average annualized gross return was 8.3%. (Quite impressive when compared to the S&P 500’s -22.7%.) In 2003, the average annualized gross return was a whopping 42.9%, with every 24-week period scoring a win. And in 2004, the average annualized gross return was 19.1%. Since inception, (1/5/2001 thru 2/25/05), the cumulative, compounded gross return shows an impressive 226.7%. Wow! I also tested this strategy using a 12 week holding period as well. The results were equally as impressive, but of course, rebalancing more frequently would have cost more in commissions and the possibility of missed dividends. Either way, this Dividend Strategy has been a consistent performer through the ups and downs of the market over the last 4+ years (and hopefully in the years to come). Currently (3/28/05), there are 13 stocks that qualify this screen. Here are some names on that list:
To find out what other stocks qualify on this winning strategy, sign up for your free trial to the Research Wizard. Test this screen and others or build your own strategies and test them. Remember, the key to successful screening is in discovering those strategies that have produced profitable results in the past. And that’s exactly what you get with the powerful Backtesting ability of Research Wizard. Start your free trial now. All the Screen of the Week strategies are created and back-tested using the Research Wizard software from Zacks Investment Research. Learn more about the Research Wizard and Free Trial offer at: http://at.zacks.com/?id=1388. Discover all the Free Screening Tools on Zacks.com at: http://at.zacks.com/?id=1389. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - ALL STAR TOP PICKS The hotels industry is back thanks to improving fundamentals,
and the All Stars have reserved three recommendations to fill
some vacancies in your portfolio. More... EARNINGS & SECTOR UPDATE 82% of S&P Companies Met or Exceeded Fourth Quarter Estimates With 98% of S&P companies having reported numbers, the fourth quarter looks well ahead of previous expectations. Nick Raich will help you find those industries poised for another solid performance in the first quarter. 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 Royal Caribbean (RCL) - Favorable Booking Trends Ferro Corp. (FOE) - Far Short of Expectations Investors in Europe Switch from Growth to Value Electric Utilities Turn Conservative
4. 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. Marvel Enterprises, Inc. (NYSE: MVL) recently reported fourth quarter earnings per share that improved upon both the year-ago result and the consensus. Increases in net sales and operating income increased mainly because of contributions from Marvel’s joint venture with Sony for Spider-Man movie merchandising and to improved international licensing revenues. The company said its strong 2004 operating results continue to reflect the expanding global power of the Marvel brand and an increase in consumer and media products based on its characters. Marvel Enterprises’ popular and profitable characters provide a lot of potential for the future, and several All Star Analysts appear to be fans. To continue your research on MVL, click here. Pacer International, Inc. (NASDAQ: PACR): Despite difficult conditions in its industry, Pacer International put together a solid performance for its fourth quarter. Diluted earnings per share of 44 cents was almost +16% in front of the consensus, while the company generated $7.5 million of cash flow from operations and paid down $15 million of debt. Pacer said the quarter’s results reflect its flexibility in adapting to difficult market conditions and its efforts to reduce operating costs. The company’s ability to deliver its strongest quarterly performance of the year during a difficult stretch is one of the main reasons why the All Stars continue to favor Pacer International. To continue your research on PACR, 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=1419
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. Devon Energy Corporation (NYSE: DVN) recently stated that record production of 251 million barrels of oil equivalent and rising oil and gas prices led to record net earnings and earnings per share in 2004. The company reported net earnings of $2.2 billion for the year, compared to $1.7 billion in 2003. Devon Energy also added 313 million barrels of proved reserves, before price revisions, while reducing net debt by $1.8 billion with free cash flow. The company is optimistic for the future, as are three of the top brokerage firms, which have place Devon Energy on their core recommended lists. To continue your research on DVN, click here. Exxon Mobil Corporation (NYSE: XOM) reported fourth quarter net income of $8.4 billion, or $1.30 per share), which was the highest quarter every for the corporation. Upstream earnings rose by $1.62 billion to about $4.9 billion, reflecting higher average crude and natural gas prices, while downstream earnings advances by $1.6 billion to approximately $2.34 billion, due to strong refining margins and improved marketing results. More recently, Exxon Mobil said it was beginning one of the most aggressive fully-integrated marketing campaigns in the history of its Mobil® lubricants brand. The initiative is to support the new line of high-endurance Mobil motor oils. ExxonMobil has taken advantage of a favorable environment for oil companies, and has a spot with three of the largest brokerage firms. To continue your research on XOM, click here. 5. ZACKS TOOLBOX Zacks.com is first and foremost a free resource to help you make more profitable stock picks. In this space each week, we will provide insights into various tools and data points provided on Zacks.com, and how to use them to improve your portfolio's performance. At the end of the day, every one of us is a value investor. Meaning that we believe the stocks we own are worth more then the current price and soon enough the rest of the world will awake to the same notion. When this happens the stock will rise and we live happily ever after. If only it were that easy. The problem is that we all use different measures to determine value. The Warren Buffets of the world pour over a company's financials to find deep and lasting value. At the other end of the spectrum you have "the greater fool theory" where people jump on board a momentum stock with a high PE and hope that some fool will take it off your hands at an even higher price. There is also everything in between. Emerging from this clutter is a fairly popular value metric that continues to gain traction with investors; the PEG Ratio. The PEG builds upon the popularity of the Price/Earnings ratio and goes one step further to try and determine how much you are paying for each unit of earnings growth. When you stop to think about it, that is the essence of company valuations. What are you willing to pay today for a company's future earnings stream? The PEG is defined as the P/E of a stock divided by its 5 year projected growth rate. The general rule of thumb is that a PEG of 1.0 is fair value. Below that is undervalued, and above that is overvalued. What you will discover is that the PEG helps to dispel the myth that growth stocks cannot also be value stocks. Let's look at 2 examples. Stock ABC is a high flier with projected growth of 30% a year. Yet the stock is only trading at a P/E of 24. That means we have a PEG ratio of 0.8, which is considered undervalued. Stock XYZ has a P/E of only 15 (less than the 24 for ABC), however it is only estimated to grow earnings 10% a year. This computes to a 1.5. Given the construct of the PEG ratio, it appears that Stock ABC is a better value proposition since you are paying less for the estimated future earnings then for XYZ. This, of course, is an oversimplification of the situation as many things could happen over time to change the perceived values of these companies. However, it should be plain to see that stocks with PEG's of 1.0 or lower provide a great starting place to identify stocks with great profit potential. What to do Next? Here are some great free resources on Zacks.com to discover stocks with low PEGs. Profit Tracks: PEG Strategy - The stocks on this list combine the benefits of a low PEG, Zacks Rank of 1 or 2 (Strong Buy or Buy) and a solid Average Brokerage Recommendation. How powerful is that? Since 1/5/01 these stocks have generated a total return of 373.8% versus -14.5% for the S&P 500. Discover all the stocks from the PEG Strategy at: http://at.zacks.com/?id=1534. Custom Stock Screening: Zacks.com offers one of the most robust free stock screeners on the web. Go to: http://at.zacks.com/?id=1535. Once there you will see a drop down box labeled "Select Category". 2/3rds of the way down the list you should select "P/E Ratios" category. After that you will see a field to screen by the PEG Ratio. After filling out that field, chose any other investment parameters to create a screened list of stocks that meet your needs. Full Company Report: Find the PEG ratio for any stock you want on Zacks.com through the "Full Company Report". On every page of Zacks.com you will see a ticker entry box in the upper left hand corner of the site. Put in any stock symbol, then select "Full Company Report" from the drop down box. Then press "Go". This report has most of the main company metrics a fundamental investor could dream of. About half way down the page on the left side is a section entitled "P/E". There you will find the current PEG ratio for any stock you are following. To kick start this process, here is the Full Company Report for GE. 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=75. Or view the full list of Zacks #1 Ranked stocks at: http://at.zacks.com/?id=72. 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 45,000 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, 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 05/21/2013
| Company Name | Symbol | %Change |
|---|---|---|
| SCIENTIFIC L | SCIL | 8.00% |
| NATUS MEDICA | BABY | 6.11% |
| SUMMER INFAN | SUMR | 6.02% |
| RADIANT LOGI | RLGT | 5.32% |
| NEW ORIENTAL | EDU | 4.51% |
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