Wednesday - May 18, 2005
 Want to view the archive of past issues? Go to: http://at.zacks.com/?id=62. Get Profit from the Pros content in Real-time. 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.
So far, the major averages have bent, but they have not broken. While the 1180 level has established itself as significant resistance on the S&P 500, support at the April 20th low of 1136.15 has remained intact. The NASDAQ Composite is also showing a surprising degree of relative strength. It has also displayed bullish divergence against the S&P 500 for the first time in many months. Given the choppy nature of the markets over the last several months, Dr. Melvin Pasternak is cautious, but not bearish. It would not surprise Dr. Pasternak to see the S&P rally off support in the high 1130's to the mid-1140's. Since March 7th when the S&P peaked at 1229.10, the trend is down. Yet, for nearly the past month, the index has been locked in a narrow trading band in which there has been intense intraday volatility. While the bulls have not been able to sustain rallies, the bears have been unable to force a major decline. The trading week of May 9th was an ugly one for the S&P. After Monday's advance, Tuesday, Thursday and Friday were all highly negative sessions. Friday looked like it would be much worse, but the index rallied substantially in the last hour to prevent a major loss. The S&P created negative candles on three out of five trading days. Eventually, Dr. Pasternak believes the S&P will break down out of the current trading range, but before then he thinks the odds favor a rally back in the direction of 1180. What is troubling the markets? Conventional wisdom says market participants are worried about two things: economic slowdown and inflationary pressures. Dr. Pasternak tends to put more credence into fears of an economic slowdown and does not believe that investors are truly worried about inflation. Friday's sell-off was caused in part by a much weaker than anticipated University of Michigan consumer confidence reading, which came in at 85.3 -- three points below consensus expectations. Considering consumers account for approximately 70% of GDP, a retrenchment in spending would clearly have a negative impact on a wide variety of corporate profits. More. . .
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Inflation, however, seems like much less of a cause for alarm. The Philadelphia Gold and Silver Index typically serves as an excellent proxy for inflation worries. In an inflationary period, investors often turn to gold bullion as a safe haven. Lately, though, rather than rising, the $XAU has been heading due south. The gold and silver index has now broken an uptrend line that dates back to October 2000! It is sitting just above key support formed in April 2004. A declining $XAU indicates that there is little fear of inflation among traders. On the weekly chart of the S&P 500, the index continues to be locked between two important trend lines. The first is the broken Major uptrend line off the March 2003 low, which intersects the chart near 1185. The second is the broken Intermediate downtrend line off the March 7th 1229 peak, which comes through the chart near 1140. From a long-term perspective, the S&P has entered into a stage III market, with the index trading well below its 30-week moving average. Currently, the 30-week moving average is at 1179, and it provided resistance almost to the tick last week. The S&P has left large upper shadows at the 30-week moving average in four of the last seven weeks! The index has also closed below its 40-week moving average for the fourth time in the past five weeks. Long candidates: Autodesk (NASDAQ: ADSK) is a software firm that Dr. Pasternak flagged last week at $34.06. The stock broke through resistance at $34 on Monday and had a strong week. The shares are very overbought, though, and should be watched closely in conjunction with the Nasdaq. ADX is on a very strong buy signal. If the Nasdaq can break out, then the stock could test its old resistance at $40. Over the last five years, Broadcom Corp. (NASDAQ: BRCM) is a semiconductor manufacturer operating in a variety of markets. The shares gained nearly $2 on Friday, despite weakness in the overall markets. They are now testing resistance levels dating back to the middle of last year. If BRCM can get through $35, then it should have a good chance of testing $40 or moving even higher. Volume Friday was nearly three times normal daily levels. MACD and ADX are on strong buy signals. RSI is at 71, so make sure the Nasdaq continues to strengthen before buying. 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=1487. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - b) Anticipation Nadine Wong thinks NABI will release positive data from a pivotal trial. Read her analysis: http://at.zacks.com/?id=148 c) Vivendi Merges French Fixed Line Unit Martin and Ragas say Vivendi’s move will help it concentrate on the growing wireless unit. Find out why: http://at.zacks.com/?id=268 Richard Rhodes explains why the dollar’s new reactionary highs is a bullish signal: http://at.zacks.com/?id=1690 e) Buy This Market on Pullbacks Jim Collins says the economic slowdown doesn’t appear to be the beginning of a trend. Get his take: http://at.zacks.com/?id=1514 Dennis Slothower remains skeptical as the technical underpinnings are still very questionable. Learn more: http://at.zacks.com/?id=1489 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. SCREEN OF THE WEEK Zacks.com offers three 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. “Return on Equity (ROE)” This week, I’ll focus on another winning screening strategy that is both easy to build and easy to use with our Research Wizard program. This one uses the Return on Equity (ROE) as one of the main components in our strategy. ROE is one of the quickest ways to gauge whether a company is creating assets or gobbling up investors’ cash. ROE = income / common equity For instance; if the ROE is 10%, then ten cents of assets are created for each shareholder dollar that was originally invested. Knowing the company is generating assets on invested capital rather than burning thru it is a great starting point. So the parameters to this screen are as follows: ROE > 25 (I’m using 25 because the average ROE for the stocks in the S&P is a little more than 20 and I want my stocks to be bigger than that.) Price to Sales < 1 (A low Price to Sales Ratio (<= 1) is considered good. Paying less than a dollar for a dollar’s worth of sales is a good deal.) Zacks Rank <= 2 (Only Zacks Strong Buys and Buys. One of the components of the Zacks Rank is earnings estimate revisions. The idea being that a company that receives upward estimates revisions is likely to receive even more upward estimate revisions. And these are the companies I’m looking for.) Current Price >= 5 (Most money managers won’t even look at a stock under $5. This screen doesn’t either.) Average 20 Day Share Volume >= 100,000 (It has to be tradable.) Average Broker Rating <= 2 (Since most brokers have such a bullish bias, I’m excluding anything if they’re not fully on board (i.e., buy or strong buy). I ran a series of tests, using a four-week rebalancing period over the last 3 year time span (2002 thru 2004). Each run was rebalanced over a different set of four-week periods to eliminate coincidence and verify robustness. In 2002, the average annualized gross return was 29.6%. In 2003, the average annualized gross return was 92.7%. And in 2004, the average annualized gross return was 32.7%.
Test this winning strategy out and others and start using them in your own portfolio. You can do it. Sign up now for your free trial to the Research Wizard stock picking and backtesting program and start making better decisions today! Go to: http://at.zacks.com/?id=1388. 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. Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
3. BEST OF ZACKS EQUITY RESEARCH BULL OF THE DAY Vale do Rio Doce - ADS (RIO) - Growing Demand for Iron. Comerica, Inc. (CMA) - Estimates Likely to be Reduced. Utilities Mergers Seek Favorable Regulations Medical Care Growth to Bring Double-Digit Earnings Focus Soon Shifts to Economic Data
4. 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 Profit Track goes to the heart of fundamental investing by finding companies with healthy earnings. The main ingredients are the search for Earnings Growth and Net Profit Margins. Then for good measure we make sure earnings estimates are moving higher which is a strong indicator of future performance and that brokerage firms are positively rating the stock. Earnings are the single most important metric for a company. Combine that with a healthy Net Profit Margin and you find a screen that has generated a return of +362% in the last 4+ years compared to -4.8% for the S&P 500. American Community Bancshares (NASDAQ: ACBA) recently announced first-quarter earnings of 26 cents per share, outpacing last year’s 15 cents and surpassing the consensus estimates by about 4%. The company also posted a 41.5% increase in total assets from March 31, 2004. With annual earnings growth of almost 65% and a net margin of 13%, American Community Bancshares easily satisfies this Profit Track screen. To continue your research on ACBA, click here. Astec Industries, Inc. (NASDAQ: ASTE), a Zacks #1 Rank (Strong Buy) stock, reported much higher earnings for its most recently completed year when compared to the year before. For its first quarter, the company recently reported earnings of 33 cents per share, beating the 27 cents per share earned a year prior. Astec Industries also noted that the sales volume increased 19.1% for continuing operations compared to the first quarter of 2004. To continue your research on ASTE, click here. Beverly Hills Bancorp, Inc. (NASDAQ: BHBC), the parent company of First Bank of Beverly Hills, F.S.B., has an impressive net margin of 42% and concluded its most recent year with an earnings total that was much higher than the year prior. Recently, the company announced first quarter earnings of 16 cents per share, which improved on last year’s first quarter earnings of nine cents per share, excluding items. Beverly Hills Bancorp mentioned that it continues to see improvement in its asset quality as it maintains its lending focus in strong real estate markets. To continue your research on BHBC, click here. Jarden Corp. (NYSE: JAH) recently released first-quarter adjusted, non-GAAP earnings of 38 cents per share, topping the consensus estimate by about 58% and jumping ahead of last year’s first-quarter earnings. The company stated that a healthy performance in its Outdoor Solutions segment, whose seasonality favors the first and second quarters, helped Jarden exceed its operating targets as a whole for the first quarter. It is not surprising that this profitable company has logged solid year-over-year earnings growth. To continue your research on JAH, click here. 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 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. Do you believe that these events affect stock prices?
Of course they do! Virtually all investors agree that these events trigger changes in stock prices. So, the next logical question is; How are you staying on top of these changes for the stocks that you follow? 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 read on to discover the unique benefits of our free Portfolio Tracker and Daily Portfolio Update emails. Most leading investment web sites offer portfolio trackers. Their main function is to provide you updates on the value of your portfolio and individual positions at any given time. That's all well and good, but how do they help you grow your portfolio? We designed our Portfolio Tracker to deliver timely information that can help you execute buy and sell decisions to maximize portfolio returns. This information breaks down into 4 areas: 1) Broker Recommendation Changes: As discussed in previous commentaries, changes in broker recommendations can greatly affect the near-term price movement of a stock. You definitely want to know if the Street is moving for or against your stocks. If the latter, it may be a strong indication to lower or close out your position. 2) Earnings Reports: In the Daily Portfolio Update emails we provide the dates of upcoming earnings announcements, current earnings estimates and then actual earnings results. A company that beats earnings will most likely rise. Unfortunately one that misses will tumble immediately after reporting results and most likely continue its descent in the weeks and months that follow. Be prepared to react by following the results posted in the emails. 3) Earnings Estimate Revisions: If you have followed Zacks.com in the past, then you probably already know about our investment studies that have proven "earnings estimate revisions are the most powerful force impacting stock prices". So every day we report all estimate changes for the stocks in your portfolio. If you want to learn more about the power of earnings estimate revisions, then download our free report at: http://at.zacks.com/?id=1617. 4) Zacks Rank: This exclusive stock indicator takes the analysis of earnings estimates to the next level. It is an easily quantifiable system to help you make buy/sell/hold decisions on the stocks you follow. Again, if you want to learn more, then download our free report at: http://at.zacks.com/?id=1617. This information is available on a 24/7 basis through your personal portfolio account on Zacks.com and then after the markets close via Daily Portfolio updates emails so you armed for the next trading day. Already have a User Name and Password for Zacks.com? Then log in at: http://at.zacks.com/?id=1618 to create a new portfolio. Need to start a Zacks.com account? Then go to: http://at.zacks.com/?id=1620. After your create your portfolio, then you can access it anytime by going to Zacks.com, then click on "Portfolios" tab and then log in to your portfolio. Plus you will immediately start receiving the Daily Portfolio Update emails after the markets close. 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 (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=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 05/24/2013
| Company Name | Symbol | %Change |
|---|---|---|
| MENTOR GRAPH | MENT | 2.62% |
| GENTIUM SPA | GENT | 2.47% |
| INFORMATION | III | 2.09% |
| AMER NATL BK | AMNB | 1.99% |
| BARRETT BUSI | BBSI | 1.93% |
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