Tuesday - May 10, 2005
 Want to view the archive of past issues? Go to: http://at.zacks.com/?id=1344. 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.
When despair begins to develop, a buying opportunity isn't too far off. Dennis Slothower is starting to see some things that are encouraging about the second half of 2005. Before he flashes the “all-clear” sign, he has to see oil prices come down from current levels. Until that happens, he sees the Fed's monetary policies staying the course of fighting inflation. The good news is that such a trend might of falling oil may not be too far off, since it is pretty clear the economy is slowing its growth trend at a rather fast and obvious pace. The stock market has had a lot to deal with in the past four months. The Iraqi elections, soaring crude oil prices, rising interest rates, the falling dollar, huge trade imbalances, and record deficits - all against a backdrop of a war against terrorism, conflict that could spill into Syria and Iran if diplomacy fails. These issues have been weighing heavily on the stock market. Market participants are very risk averse and frankly Slothower believes there are very good reasons why investors should be very careful under these circumstances. The economy could sink into recessionary conditions very quickly if this trend persists. The fact that the stock market indices have broken key primary support trend lines should warn us - the economy is sliding. The Fed will do what it has to in order to promote growth again, even if it means we have to go through a recession in order to bring that about. Slothower knows that doesn't make a lot of sense, but that is the way it works. Last month's employment report showed a sharp drop in employment as employers anticipate an economic slowdown. Retail sales have dropped sharply as gasoline prices cut deep into the consumer's pocketbook. Manufacturing has slowed and inventories are building. Durable goods orders have dropped sharply. Things are slowing up for the U.S. economy. More. . .
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - It was announced at the end of last month that the U.S. economy grew at a 3.1% annual rate as measured by the GDP during the first three months of the year. This was the slowest growth in two years and down from 3.8% the previous quarter, even as inflation inches higher. Actually, Slothower was expecting much worse. Keep in mind that we are still growing, but the pace of growth is contracting. Before this is over we could see a negative GDP if that is what it takes to break the demand for energy related inflationary pressures and allow the bull to take over. It's just a matter of time before crude oil prices begin to fall. O'Reilly Auto (NASDAQ: ORLY) is a specialty retailer and supplier of automotive aftermarket parts, tools, supplies, equipment and accessories to both do-it-yourself customers and professional mechanics or service technicians. O'Reilly stores carry an extensive product line consisting of new and remanufactured automotive hard parts, such as alternators, starters, fuel pumps, water pumps, and brake shoes and pads, maintenance items, such as oil, antifreeze, fluids, engine additives and appearance products, accessories, such as floor mats and seat covers. Pfizer, Inc. (NYSE: PFE) is a research-based, global pharmaceutical company that discovers and develops innovative, value-added products that improve the quality of life of people around the world and help them enjoy longer, healthier, and more productive lives. Pfizer has three business segments: health care, animal health, and consumer health care. Its products are available in numerous countries. Stryker Corp. (NYSE: SYK) develops, manufactures, and markets specialty surgical and medical products, including orthopaedic implants, bone cement, trauma systems used in bone repair, powered surgical instruments, endoscopic systems, craniomaxillofacial fixation devices, specialty surgical equipment used in neurosurgery and patient care and handling equipment for the global market and provide outpatient physical and occupational rehabilitation services. INNOVO GROUP INC (NASDAQ: INNO) is engaged in the design, development, and worldwide marketing of branded and private-label denim and denim-related products. Innovo sells its products to retailers, distributors, and private-label customers around the world. For the three months ended 2/26/05, revenues increased 78% to $23.1 million. OPENWAVE SYSTEMS INC (NASDAQ: OPWV) is an independent provider of open standards software products and services for the telecommunications industry. For the six months ended 12/31/04, revenues rose 27% to $177.1 million. Net income totaled $2.8 million versus a loss of $23.4 million. Results reflect higher project revenues, services, and license revenue and interest income. During my 25-year career as a money manager, I’ve tested hundreds of market indicators. I’ve fine-tuned my strategy using specific indicators that work together to predict the market with incredible accuracy and find stocks flying under the radar screen. Indicators are pointing to a strong bull market in 2005. Schaeffers Investment Research doesn’t want you to miss a single day of what I/m convinced will be a spectacular bull market. Learn more about this newsletter and free trial offer at: http://at.zacks.com/?id=377. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - b) Demand is the Primary Concern Going Forward Demand was brisk in the first quarter, but Paul McWilliams doesn’t want to get too optimistic: More... c) Market Correction Provides Opportunity for Idle Cash Don Dion thinks the markets have been sending mixed signals lately, but he remains bullish. Find out why: More... d) Does the Market Know Something that We Don’t? Will we have a bear market without a recession? Jack Schannep offers his insight: More... Ian Wyatt’s team says that Comcast has learned how to innovate and is reaping the rewards. Get his analysis: More... f) Was the April Jobs Advance a Quirk? Richard Rhodes says this week should confound both bulls and bears. 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. BEST OF ZACKS EQUITY RESEARCH Zacks.com offers three unique weekly commentaries that all further
our mission to help you Profit from the Pros. Today's
commentary is the Earnings & Sector Update from Nick Raich,
Director of Research for Zacks. His weekly article explores
the important trends in recent and upcoming earnings data. This
report is a must for any investor seeking to buy into the
hottest industry sectors and avoid those out of favor. See
the full report at: http://at.zacks.com/?id=1363. Earnings & Sector Update Almost 90% of the companies in the S&P 500 have now released first quarter 2005 earnings. Of the companies that have reported, 82% have met or exceeded their estimates. The average earnings gain has been 18% from last year’s first quarter. The expectation for the companies that have reported was for 13%. When all companies report, we expect final first quarter 2005 earnings growth of 16% for the S&P 500. The good news on the earnings front has been offset by some negative data on the economic front. Quite simply, we believe many investors are nervous that second quarter and second half 2005 earnings estimates will be reduced. The Zacks consensus second quarter 2005 earnings growth estimate for the S&P 500 currently stands at 9%. That is exactly where it was one month ago. Therefore, we have found no evidence that earnings estimates for the S&P 500 are getting cut. As a matter of fact, due to the better than expected first quarter 2005 results, we actually have seen the consensus 2005 annual earnings estimate creep up 0.5% point over the past thirty days. Zacks industry rankings are provided toward the back of this report. The rankings are based on a quantitative model developed by Zacks that focuses on past earnings trends and forward earnings revisions from Wall Street analysts. The model has an excellent track record of outperforming the market. Therefore, the Zacks industry rankings should provide a great starting point for your equity research. More at: http://at.zacks.com/?id=1363. Table of Contents for Rest of the Report
Read this weeks' full report at: http://at.zacks.com/?id=1363. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - BULL OF THE DAY Overnite Corp. (OVNT) - 1st Quarter, High Dividend. For full Zacks research report, click here. Telesp Celular - ADR (TCP) - Competition in Brazilian Wireless. For full Zacks research report, click here. Infosys Spurs Indian IT New Drugs Balance Out Growth in Generics
3. 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: PEG Ratio 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. If you like to use a company’s PE ratio to determine its value, you’ll love using the PEG ratio. Find out which companies offer the greatest value regardless of growth rate to enjoy stellar returns. Value investing may be boring to some, but a +114.4% return in 2003 and +38.4% return in 2004 may create many converts to this Profit Track. Here are three stocks that make the grade for the PEG Ratio Profit Track KB Home (NYSE: KBH) KB Home is a builder of single-family homes with domestic operations in several western states and international operations in France. Domestically, the company builds innovatively designed homes which cater primarily to first-time homebuyers, generally in medium-sized developments close to major metropolitan areas. Internationally, the company also builds commercial projects and high density residential properties such as condominium complexes. KB management commented that margins are likely to continue to rise in 2005, as margins on orders in backlog are well above current levels. In addition, the company sees the opportunity for additional margin expansion over coming years, even if the California housing market moderates. This solid homebuilder is trading at an attractive 9.28x trailing earnings and sports a PEG ratio of .47. Rising margins and a low PEG ratio are a good combination and should bode well for KBH. Continue your research on KBH at: http://at.zacks.com/?id=1996. Accredited Home Lenders (NASDAQ: LEND) Accredited Home Lenders Holding Co. (Accredited) engages in the business of originating, financing, securitizing, selling and servicing non-prime mortgage loans secured by residential real estate in the United States. In the most recently ended quarter, Accredited generated about 43% of its net income from its balance sheet, up from 35% in all of 2004. The stock is very cheap at 6.35x trailing earnings and a PEG ratio of .40. These valuations should provide upside for the stock. Continue your research on LEND at: http://at.zacks.com/?id=1997. Sigmatel Inc. (NASDAQ: SGTL) SigmaTel, Inc. (SigmaTel ) is a fabless semiconductor company that designs, develops and markets, analog-intensive, mixed-signal integrated circuits (ICs) for a variety of products in the consumer electronics and computing markets, including portable compressed audio players, such as media player3 (MP3) players. SGTL reported a big upside for its March quarter with revenue growing 26% on a sequential quarterly basis to $99.3 million and EPS at $0.67 versus consensus of $84.9 million and $0.46. The stock is attractive with a PEG ratio of .54, which is low for a for a high-growth technology stock.. Continue your research on SGTL at: http://at.zacks.com/?id=1998. To see the full list of stocks that currently pass this winning screen, go to: http://at.zacks.com/?id=1999. 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 the this powerful stock picking tool. Learn more about the Research Wizard and Free Trial offer at: http://at.zacks.com/?id=1993 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Creating a Custom Consensus of your Winningest Screens Kevin Matras combines some of his winningest strategies to create a Custom Consensus screen. See how it's done and how you can do it too. And get three top consensus picks from this week's list. More... 4. 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 Buy stocks have risen by an average annual return of 32.8% since 1988 versus 11.9% 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 Rank Strong Sells by 155.5% annually (11.88% vs. 4.65% 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: 62 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, Schaeffers Investment Research, to provide you the best options commentary, research, and trading tools on the market today. Read below more on Schaeffers Tools to Profit with Options. Schaeffers Investment Research wants to do something a little bit different this week and take a look at a strategy that can be used during earnings season called a straddle. As you might have noticed, the past few weeks have been what is known as earnings season. In short, it is when a good majority of the stocks in the S&P 500 announce their quarterly results. Yes, other companies might release earnings a month from now, but the great majority announce during this two week period. As I'm sure everyone has noticed before, earnings mean volatility. A stock can gap up or down several points due to what is said at earnings. The more you watch how stocks react to earnings you realize that what seems to matter more than anything else is how the company feels about the future. They could crush earnings estimates, but if they say the next few quarters will be rough, then get ready for a tumble in the shares. Ok, so it's safe that on earnings we can anticipate some volatility more often than not, but how can we make money on this you might ask? Well, obviously you could try to guess if earnings will be strong or not and play bullish calls or bearish puts, but Schaeffers Investment Research wants to discuss another way. This strategy is called a straddle. It entails buying both a bullish call and bearish put. The key is: you want to buy the same month and same strike also. The whole point is to have one of your options (you don't care which) move up so much that it offsets the loss in the other one. Let's look at an example. Let's say company ABC has earnings set and you think they will move, but don't know which way. The stock is trading at $25 a share right before earnings so you buy the May $25 straddle on ABC. This means you bought both a call and put on ABC at a strike of $25, putting equal money into each leg. In this example the 25 call would cost you $1.10, while the put would run you $1.05 (I'm making these numbers up). Add those two numbers together and you have a total cost of $2.15 for both options. Now let's say the company comes out with earnings and they lay an egg and get hammered. The stock drops to $21 right after earnings. Now our call of course is worthless, but our put is all of a sudden worth $4 a contract (25 strike minus current price of 21 equals $4). Since we paid $2.15 for both combined, we are up nearly 90 percent. In essence, we were right. Our bet was one that there would be volatility, we don't care which way things go so long as they move. Now this might sound easy but it's not. What if the stock didn’t move at all after earnings? That is the worst possible thing that could happen, as it means that both the put and call will lose value - remember we want movement. In this case you will want to be quick to sell both the put and call and try to preserve any and all capital. But don't let this scare you, as this is a time tested method that can be very profitable and lowers your risk considerably than just trying to pick either a call or put. In conclusion, please feel free to try to paper trade a few stocks in front of earnings and see how you do. In fact, use the filters on this page and try to use some of the past filtering techniques that I've described over the past six months to get some ideas. Once you find a name you like and notice it has earnings coming up you could play the straddle but put more money into the portion of the straddle that you think will be right. This way even if you are completely wrong, you will be rewarded on the other half of the straddle. Please read up on straddles and try to get a good feel for them, because they are another money making tool to add to your arsenal. In addition, be sure to utilize the Schaefer's Filters here at Zacks.com to discover those equities that are primed for a straddle strategy. Good Luck in your trading! Learn about all of Schaeffer's Options Trading Filters by clicking, click here. a) Two Bullish Options from the Doctor Dr. Edward Olmstead offers a pair of bullish option trades from the health insurance and energy industries. More... Discover all the tools and commentary available from the Zacks.com Options Center at: http://at.zacks.com/?id=614. 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. 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 by visiting: http://at.zacks.com/?id=1346. Or view the full list of Zacks #1 Ranked stocks at: http://at.zacks.com/?id=1353. 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 and improve your portfolio's performance. Did we mention it's free? Get started now by going to: http://at.zacks.com/?id=1674 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 05/17/2013
| 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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